Corporate social responsibility is a concept that arises in a context where companies must engage in actions that are beneficial to society in addition to their for-profit actions. As the concept developed, some companies quickly understood the challenges and benefits that CSR could bring them, particularly in terms of public image (Porter 2011). CSR has become a real business strategy because it adds value, it is a way of matching the company\’s activities with the values of all stakeholders (Stavins 2010). CSR can provide a competitive advantage over other companies while at the same time giving a better image (e. g. moral and legal). This essay argues that to provide social benefits and be socially responsible, companies don’t need to temper their economic success because the concept of social responsibility can help to improve the performances of the company.
CSR is an opportunity for companies to improve their governance, strengthen their societal commitment and limit their environmental impacts, thus ensuring its sustainability while contributing to sustainable development. CSR provides a context in which companies can reassess their relationships with society. CSR goals can be easy to explain, it comes from the definition of this concept. There are many social problems that are the result, the consequences of companies\’ activities. For example, there is the pollution for a lot of industrialists or on the other hand we still have relatively low basic wages compared to the earnings of companies. CSR corresponds to all the actions driven by companies to correct the mistakes that they made in several areas.
CSR is a competitive advantage for consumer brands. \”Sustainable development is a global concern that continues to grow, especially in countries where population growth adds additional pressure on the environment. For a growing number of consumers in developed countries, sustainable engagement is more than an added value, it is a real imperative. « Grace Farraj, SVJ Public Development & Sustainability at Nielsen. A 2015 Nielsen study found that more than 65% of consumers worldwide were willing to pay more for products from companies that are active in sustainable development. And this trend continues to grow from year to year. In 2015, brands that put sustainable development at the heart of their activities will see their sales grow by +4% compared to less than 1% for other brands according to a Global Corporate Sustainability report. For example, by changing some way of manufacturing and delivery, Wal-Mart has reduced its carbon emissions while saving $200 million in costs (Porter & Kramer 2011).
Customer loyalty is another consequence to be taken into account is the fact that these customers are much more likely to be loyal to brands if they can identify with their brand values. The millennials, for example, who are one of the most important populations that dominate the market of our time, prefer to buy with companies and brands that have social messages, working methods oriented towards sustainable development and an ethical vision of business.
On the other hand, the way a company treats its employee community speaks volumes about the company\’s values. People who feel respected and think they are getting the attention of their company are often more satisfied and productive at work. This employee will be more willing to work with colleagues to create a better work environment. CSR companies see increased creativity among their employees, they feel more integrated into the company, work more, perform better and are more willing to make sacrifices for the good of the company.
CSR is also beneficial because it attracts talent to their company. Millennials are more attracted to these companies who invest in major CSR programs. For example Johnson&Johnson helped their employees by investing wellness programs that permitted them to save $250 million on health care costs from 2002 to 2008. Moreover, J&J’s employees were more present and productive after the creation of these wellness programs (Porter & Kramer 2011). We can therefore say that CSR brings a lot to a company as well as its environment, society and its employees. But it necessarily requires financial investment and the creation of a real CSR vision focused on improving a company\’s strategy for the benefit of all. The codes of good conduct published by companies that define CSR policy in particular are of variable quality and do not necessarily benefit all companies in the same sector, whether economically, ethically or socially. If we were to ask a business leader the question, between maximizing profits or applying a code of good conduct, he would obviously opt for the pursuit of profit. These two issues have been reconciled to some extent through reforms in production processes and through greater control of work and production costs. (Sociological Studies, Yu XIaomin 2007).
Corporate CSR raises expectations in terms of social and environmental standards. Companies that comply with these standards are generally well regarded. But the disadvantages lie in the time and resources needed to develop the allocation of a CSR approach that meets government and societal standards. Those in favour of CSR respond with the long-term benefits of this strategy, but some shareholders, for example, are against any idea of investing in projects that do not amount to creating a financial gain. The return on investment is not necessarily clear. In addition, CSR can create a competitive disadvantage and can be seen as a disadvantage. If in a sector a company implements CSR programs and strategy by investing time and resources while the competing company retains its resources for so-called more commercial activities, an inequality is created. Without respect for the whole sector, the implementation of CSR can result in companies losing profit.According to Milton Friedman, CSR diverts the company from its main objective, which is to make a profit. The company forgets its primary mission towards shareholders, instead of doing everything possible to achieve financial gain, it invests time and resources for CSR, and therefore society or the environment for the well-being of the community.