Significance of Corporate Social Responsibility to Corporations

Significance of Corporate Social Responsibility to Corporations
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Significance of Corporate Social Responsibility to Corporations
Companies need to improve society and make it a better place for all its inhabitants. In this regard, they have an option to participate in corporate responsibility. Although it is not a mandatory practice, corporate responsibility is essential to all organizations. This is because it reflects the commitment of firms towards the local and global communities. Moreover, it results to advantages such as a good public image, innovation, engagement of both customers and employees as well as positive media visibility. In turn, this advantages make it attractive to the public and customers want to be affiliated with it. Eventually, this translates to more sales and high profits making corporate responsibility an important issue.
With corporate social responsibility, the public image of a company is set to improve. This is because the act of being socially responsible changes people’s perception towards the specific firm. Accordingly, the social responsibility programs of a company have positive impact to the members of the public. Particularly, the consumers begin seeing the company as better off compared to others which are not socially responsible. In turn, most clients become encouraged to be affiliated with organizations that help the community. For instance; company EGF is involved in volunteering actions to clean up the community’s environment. It also runs an annual program which is aimed at offsetting high medical bills of aged individuals who suffer from chronic illnesses. Such a company is likely to become favorable in the eyes of the society and especially the consumers. Consequently, the clients who know about its philanthropy would make an effort to shop or obtain services from that specific company (Surroca, et al. 2010). Evidently, the volunteering actions of the firm can be termed as publicizing efforts which were made in a bid to improve the firm’s corporate image.
Corporate responsibility increases the media coverage of a company. It is this media coverage that helps in marketing the company and the activities it engages in. However, for the marketing to be effective, the media coverage has to be positive (Hamdani & Awatara, 2015). In this regard, a company needs to engage in acts that are beneficial for the community so that it can be positively portrayed by the media. Besides doing the ordinary such as cleaning the environment, the company has to go overboard and engage in a more constructive activity. For example; it could use a rarely used renewable source of energy and reuse its potentially harmful byproducts in a bid to reduce environmental pollution. This would be essential because engaging in such unique and productive activities makes a company suitable to the media interests. In turn, the company would receive more media visibility compared to its counterparts which engage in the same activities. Ultimately, most of the clients would want to be associated with the media visible company compared to the others which are not.
Another significance of corporate responsibility is that it boosts employee engagement. This is attributed to the fact that most employees would want to work for a company that is positively transforming the society (Grayson & Hudson, 2007). Moreover, having a good corporate image as well as positive media visibility puts the company at a strategic position. Accordingly, this strategy makes the company desirable to work in. As a result, individuals seeking job opportunities would want to be a part of the company’s workforce. The already hired employees would also want to retain their jobs and work hard at it. As such, a company would have more employees who are creative, hardworking and satisfied. This kind of retention and recruitment of new talent can be traced to the existence of happy employees. These happy employees owe their satisfaction to the philanthropic nature of the company. In the end, the firm ends up with an engaged workforce that is valuable, productive, and satisfied.
Investors do care about the corporate image of a company as well as the responsibility it engages in. This means that by engaging in corporate social responsibility, a firm would be attracting and retaining investors. When firms donate a part of their finances to non-profit organizations which are committed to a good course, it implies that they are committed to transforming the society for the better. This gesture of positively impacting the lives of other people, is appealing to most investors. As such, they may not necessarily care much about the level of profits when corporate responsibility is not involved. In this regard, they will continue funding the company as long as they are aware of how accurate their funds are being utilized. Furthermore, corporate responsibility reflects investors’ interests in both global and local communities. This implies that a company which has a strong sense of corporate social responsibility (CSR) will gain more investors and retain the existing ones.
Additionally, CSR is important to corporations since it provides avenues that allow for corporate partnerships. One of the ways by which companies engage and work together is through involvement in CSR acts. This is because a f...