CSR in the Contemporary Competitive Business Environment

Schwartz (2017) defines Corporate Social Responsibility as an organization’s obligations to the community, especially the stakeholders’ obligations regarding the firm’s decision making process. Caroll (1991) say that CSR consists of philanthropic, legal, economic, and social obligations to the community. In the contemporary competitive business environment, the advocates of Corporate Social Responsibility argue that CSR is the best way an organization can adopt if they want to attain a transient advantage in the industry. Grayson & Hodges (2017) outlines several advantages of CSR and they include an enhanced brand reputation, transient advantage, better financial and corporate profitability, builds stronger ties with the community, and enhanced engagement and retention. Cannon (1994) evaluate the trajectory through which the corporate social responsibility obligations have developed since World War II and the historical involvement of businesses in the community’s welfare and establish that both the government and businesses have a responsibility towards the development and welfare of the society.

These arguments have existed since the 1970s and they remain in discussion even in the contemporary business environment and there is still no concrete conclusion regarding this debate (Gupta & Pazir, 2012). The researchers argue that there is a negative relationship between the financial performance of an organization and corporate social responsibility because of the added costs that businesses have to spend towards the betterment of the society. In their view, Gupta & Pazir (2012) say that these costs affect the firm’s profitability and they contribute to a slow growth rate of a business. In other words, the forgone profits by the organization to invest in corporate social responsibility affects the business’ operations significantly. However, a significant proportion of researchers argue that those firms that practice corporate social responsibility get internal benefits that improve the financial performance of the entity.

In this study, the researcher says that a link with CSR allows the business’ employees to come into contact with several business opportunities which they would have not otherwise recognized if the entity does not engage itself in CSR practices thus, gaining a transient advantage over their competitors in the industry. Porter & Kramer (2006) says that engaging in corporate social responsibilities is like incorporating reasonable and appropriate policies in an organization which will finally assist the entity to improve their performance in the market and finally meet the firm’s goals and objectives. In other words, this step is related the creation and implementation of strategy for successful branding. With these regards, business administrators have a responsibility to facilitate the engagement of their entities in CSR as a way of improving their brand in the current competitive business environment.

Porter & Kramer (2006) say that the proponents of corporate social responsibility propose that businesses engage themselves in corporate social responsibilities because of their self-business interests. In his study, Shah (2010) finds out that Bharat Petroleum Ltd has taken several initiatives to improve the welfare of the society in which they operate. Hartman’s (2011) article in the European review of agriculture economics journal titled, “CSR in the food sector” show that CSR play a critical role towards improving a company’s reputation and recognition in the market. However, the survey indicates that Small and Medium enterprises do not have massive financial capabilities to engage in social responsibilities and establish that the food sector always aims at improving their control and discharge of their services towards customers.

In return, consumers prefer those products that are responsive to CSR practices in the society and offer best products and services. Brammer, Jcakson & Matten (2012) conduct a study entitled “Corporate Social responsibility and institutional theory; new perspective on private governance” and the institutional theory establish that not only that CSR practices are a business’ voluntary activities but also forms part of the businesses’ interface with the society. Additionally, this study says that those organizations involved in corporate social responsibilities have hire profits in terms of profits, human resources, and personnel compared to those firms that do not engage in corporate social responsibility practices. In the current business environment, some organizations say that CSR activities are cost savers while others call it a brand building activity.

With these regards, it is evident that corporate social responsibility practices are good both for an organization and the society. Chaturvedi (2013) highlights Dell’s strategy in motivating their employees and as one way of initiating corporate social responsibility activities in the community. The article also discuss that Dell Company consider their employees as the motivating power towards their success and as a result, they the company had to do more for the society.  Socio-economic review, 10(1), 3-28. Cannon, T. Corporate Responsibility a Textbook on Business Ethics, Governance, Environment: Roles and Responsibilities. Carroll, A. B. , & Hodges, A.  Corporate social opportunity: Seven steps to make corporate social responsibility work for your business. Routledge. Gupta, R. , & Pazir, D. Kagel, J. H. , & Roth, A. E. (Eds.