Corporate social responsibility has benefitted many large and small scale businesses in today’s world. Over the past few decades, there has been much speculation about the advantages and disadvantages of CSR. There are several advantages to implementing various forms of CSR and sustainability programs in large and small scale businesses. Corporate social responsibility has become a need for success in the business world today. There are several ways in which an organization can benefit from a well-designed CSR program whereby CSR does not need to be viewed as a drain on internal resources but rather as a strategy to enhance operational excellence.
Corporate social responsibility can be a great way to enter new markets and increase customer retention. Today’s customers prefer transparency. Every customer wants to engage themselves with businesses that are transparent about their business practices. With increased use of the social media and other tools that provide access to business information, customers have easy access to information about what they are paying for. Today’s customers have easy access to company records and labor practices.
According to a 2014 Nielsen Survey, more than half of consumers online reported that they are very likely to pay more for products and services from companies that are socially and environmentally responsible. More than ever before, today’s consumers are constantly demanding that businesses become more transparent and communicative with their customers. CSR can be a great way of providing a direct response to consumers growing need for transparency. CSR can significantly increase a company’s bottom-line because with certain types of CSR, businesses have the opportunity to create a prospective set of new customers interested in existing or new products or services. CSR events and initiatives are a great way to develop and enhance existing and new relationships with customers, suppliers, and other networks.
Corporate social responsibility is a great way to attract, retain, and sustain employee satisfaction. A survey from Net Impact revealed that 53% of workers stated that a job where they can make an impact makes them happier and 35% of workers would take a pay cut to work for a company that is committed to CSR. According to a Deloitte survey, 70% of millennial workers stated that their company’s commitment to CSR was a major factor influencing their decision to work for their employer. According to another landmark CSR study conducted by the Society for Human Resource Management, CSR practices are seen as highly important factors to employee morale, loyalty, retention, and recruitment of top employees. Employees give their hearts and souls to their businesses when the company or firm does work that seek to touch the heart and soul of their employees.
Collaboration is a critical element needed for a successful CSR program. Companies like Unilever, Nike, General Motors, and IKEA have collaborated together internally and externally on issues such as climate change. Collaboration between inter-departmental teams is as important as collaboration between groups outside an organization for CSR success. Many top talents within the industry or outside the industry are attracted to a good corporate social responsibility program. It is much easier to attract top talent with a good CSR program. Many companies support charities and causes that their employees are passionate about to make their CSR programs successful. In these types of situations, the employees directly engage in selecting the type of work the companies are involved with.
A good CSR program can also be a cost saving alternative for a company in many cases. Many programs encourage use of less packaging and less energy to cut costs and save money in manufacturing and similar plants. For example, General Mills reduced its energy savings by almost 20% by 2015. For a small scale business, an average office worker can use up to 11 sheets of paper a day. Some critical questions to ask may be: Are we really recycling as much as we could? Forgetting to turn off PCs come home time can waste enormous amounts of energy.
CSR is a good way for a business to differentiate itself from its competitors by generating greater innovation and learning. It is a great way to generate positive publicity and media support that result in improved business reputation within communities. Often times CSR can result in great innovation such as Unilever’s innovative new products such as hair conditioners that use less water. In the past, a majority of businesses embraced CSR due to brand differentiation. But today, businesses are embracing CSR for its many benefits.
Companies like Pepsi and Coca Cola are constantly innovating and are both adopting strategies of zero net water usage. No entity can create the prolonged sustainable change that a business can to our environment and society because no other entity has the vast reservoir of resources that a large or small scale business can have. No entity is in a better position to create long term, sustainable change than businesses. Even investors are more likely to invest in companies and businesses with a better CSR program than its competitors.
More and more investors are attracted to companies that do well and are pulling away their resources from companies that are not investing their time and energy on a solid CSR program. CSR is directly related to the type of investment investors are making in businesses today. Corporate social responsibility often inspires innovation within companies which thereby develops long-term immunity and business sustainability for firms.