What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility is a great model for businesses to help the communities it belongs to while also growing their wealth.  There are many different formats depending on what you want for your business, Business Ethics, Stakeholder Management, Sustainability, and Corporate Citizenship all target a certain area on which you can focus. Business ethics was popularized in the 1980s and concerns itself with the fairness of business, manager and employee action, behavior, and policies taking place in a commercial context (Carroll). Stakeholder management has been popularized in the 1980s and concerns itself with its stakeholders. Stakeholder management has to ask and solve questions like who are the stakeholders? What responsibilities does the firm have towards its stakeholder? Sustainability was popularized in the 1990s, it concerns itself with taking care of the present and future. Sustainability often includes environmental, social, and economic factors. Corporate citizenship was popularized in the 1990s and tries to become the best citizen. Corporate citizenship does this by creating jobs, abiding by the law, creating products and services for the community, and giving back to the community. CSR is a growing trend, especially with globalization, business acceptance, and academic acceptance. 

Benefits of CSR

There are many different beneficial impacts of CSR.  CSR helps increase traffic for consumers and investors as they are more likely to help companies that have their ideals align with your business’s ideals. According to Murphy,  companies with corporate social responsibilities have more support from customers rather than companies without corporate social responsibilities.  Murphy claimed that “Companies can likewise witness increased foot traffic if they’re committed to supporting the local community. For example, banks that dispense loans to low-income households are apt to see an uptick in business as a direct result.” 

CSR can help businesses during economic downfalls making things like their stock prices not fall as much.  According to Lee, CSR has been proven beneficial in helping lower the negative impacts of the Covid-19 pandemic.  An example of how CSR has been beneficial to businesses is the reduced negative impacts of stock prices, while stock prices for many companies have been reduced it hasn’t been reduced by a lot.  

CSR can also be beneficial to employees. 95% of employees believe that companies should help benefit employees, customers, suppliers, and the community and not just the shareholders (Stobierski).  Many employees are more willing to work for companies that they believe in.  Having a strong corporate social responsibility should also increase productivity in your workplace.  CSR also helps benefit employees as it allows employees to become more productive, and loyal.  Employees are more willing to work with companies that have good CSR.  Some criticism of CSR is that businesses are not doing enough for the communities and are gaining benefits for doing the bare minimum.  This is changing as more and more people adopt CSR.  

How to improve your CSR

With these benefits, many business executives are trying to adapt and improve their CSR.  Businesses can improve their CSR program by donating to charities that align with their business ideology, aiming for beneficial certifications, not greenwashing products, and not decreasing their CSR program when there is an economic downfall like the Covid-19 pandemic.