Corporate social responsibility better known as CSR is a business strategy with varied definitions. In basic terms CSR is a “mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.” (Abagail McWilliams, Corporate Social Responsibility: International Perspectives) However, it can go beyond this when a company engages in activity that appears to further some social good, beyond the interests of the firm and that which is required by law.
The purpose of CSR is to demonstrate to consumers, employees, communities, stakeholders and all other members of the public sphere, that the company embraces responsibility for its actions and has a positive impact on the environment and society. Michael E. Porters and Mark R. Kramer’s theoretical work with CSR concludes that “CSR can be much more than a cost, a constraint or a charitable deed – it can be a source of opportunity, innovation and competitive advantages”. From this view CSR is to been seen as a strategy companies can work with in addition to innovation, competitive advantages and economic growth.
Why has CSR become such an important issue?
Corporate social responsibility has become an important factor for companies today. This is mainly caused by the fact that CSR has become an institutional pressure on businesses. Consumers expect that companies act ethically and give back to the community. For companies to be perceived as legitimate – to have “license to operate” – it has become necessary for them to act in a socially responsible way. In addition, technological developments have generated political consumers who have a keen eye on corporate actions and a focus on whether there is consistency between what the companies say, and what the companies actually do – this is known as “walking the talk”.
What to expect from CSR in the future?
Twenty years ago CSR was limited to corporate philanthropy and, for some businesses, the adherence to environmental legislation. What we see today is a far more complex picture and an ever-widening stakeholder universe. CSR is no longer a question about branding, it is something that the public demands companies to deal with and it is something companies needs to be aware of if they want to be seen as legitimate.
I predict that within the next few years, CSR will be a requirement for all organizations and will positively affect their bottom lines. Good business is the norm for all companies today and with a good-working CSR strategy, your company will achieve success.