Corporate Social Responsibility is a particular self-regulating business model that is rather beneficial for the company and other people. This concept assists businesses in becoming socially accountable to themselves, the public, and their stakeholders (Famiyeh, 2017). The principal value of Corporate Social Responsibility is that organizations use volunteer efforts, philanthropy, and various CSR programs to benefit society.
There is a number of advantages available for businesses that implement the Corporate Social Responsibility model. To begin with, improving other people’s lives or helping the environment can significantly boost the companies’ brands and make them preferable to those who are not engaged in CSR programs (Famiyeh, 2017). Then, the presence of Corporate Social Responsibility forges a more robust connection between corporations, employees, and the whole world, which increases performance and the company’s authority and reputation among investors. What is more, such a policy may improve businesses’ value and profitability (Famiyeh, 2017). For example, with the introduction of waste recycling and energy efficiencies, it is possible to reduce operational costs.
Notwithstanding the importance of the advantages mentioned above, this model also has some shortcomings. First of all, implementing Corporate Social Responsibility programs and actions generally require investing time and significant amounts of money, as well as finding a specialist who would help choose better areas and strategy (Famiyeh, 2017). Further, while trying to positively affect a certain problem, it is possible to harm another area and reduce the company’s authority (Famiyeh, 2017). Finally, since there is a fiduciary duty to the organization’s shareholders, executives’ responsibility is to maximize profits, while Corporate Social Responsibility directly opposes this goal.
Famiyeh, S. (2017). Corporate social responsibility and firm’s performance: Empirical evidence. Social Responsibility Journal, 13(2), 390–406.