CSR implementation
As e-commerce begins to flourish, consumers have a wider variety of products and brands to choose from. Statistics derived from the U.S. Census Bureau indicate e-commerce will increase 62% by 2016; and with online shoppers already spending $226 billion this year,[when?] retail store shopping could soon become obsolete.[1]
With e-commerce on the rise, consumers will have the ability to choose whatever brands they want, and with consumer trends moving more towards purchasing products from socially responsible companies,[citation needed] the profit margins could experience substantial changes. For instance, The Social Responsibility Journal recently[when?] performed a research study concerning consumers' perception of companies who participate in corporate social responsibility. The results were as follows: "consumers perceived greater benefit and value in the offer of the socially responsible firm, and were showed to be willing to pay 10 percent more for its product, judging this price differential as being fair." Simply stated, consumers were willing to pay additional money for a product, if the product was produced by a "socially responsible company". This example of change in consumer preference helps to confirm the economic benefit CSR implementation will bring to companies who instate it.[2]
Concerns[edit]
Due to the aforementioned changing economic environment and the modified consumer purchasing habits, implementation of CSR appears to extremely beneficial to any company. Yet for many executives, the question of CSR implementation raises concerns. Milton Friedman brings to mind a valid argument, saying, by implementing CSR, "the corporate executive would be spending someone else's money for a general social interest. Insofar as his actions in accord with his "social responsibility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money."[3]
Advantages[edit]
However, An article published by the Harvard Law School on Corporate Governance and Financial Regulation lists four advantageous effects of CSR.
- implement cost and risk reductions
- gain competitive advantage
- develop corporate reputation; and
- seek win-win outcomes through synergistic value creation[4]
Analysis of Implementation[edit]
After scrutinizing the two arguments with the help of Harvard Law School's findings, Corporate Social Responsibility and Corporate Financial Performance have a positive correlation. Moreover, by participating in CSR implementation, as Friedman discourages, we can increase profits and competitive advantage, while still maintaining the commitment we swore to uphold to all stakeholders.
Processes Involved in Implementation[edit]
Within separate industry's, implementation of CSR objectives will vary. However, six main points of emphasis will always be the basis of implementation.
- Conduct a CSR assessment
- Develop a CSR strategy
- Develop CSR commitments
- Implement CSR commitments
- Verify and report on progress
- Evaluate and improve[5]
By engaging in CSR implementation, from the upper echelon of a Top Management Team, to a low-level employee, financial and societal performance can be increased.
References[edit]
- ↑ Rueter, Thad. "E-retail spending to increase 62% by 2016." Industry Statistics. Internet Retailer, 27 February 2012. Web. 16 April 2014. <http://www.internetretailer.com/2012/02/27/e-retail-spending-increase-45-2016>.
- ↑ Malecki, Catherine (30 March 2018). Corporate Social Responsibility. ISBN 9781786433350. Search this book on
- ↑ Friedman, Milton. "The Social Responsibility of Business is to Increase its Profits." The Social Responsibility of Business is to Increase its Profits, by Milton Friedman. The New York Times, 13 Sept. 1970. Web. 17 Apr. 2014. <http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html Archived 2008-03-12 at the Wayback Machine>.
- ↑ Motello, Matteo. "The Business Case for Corporate Social Responsibility." The Harvard Law School Forum on Corporate Governance and Financial Regulation. Presidents and Fellows of Harvard College, 26 June 2011. Web. 16 Apr. 2014. <https://blogs.law.harvard.edu/corpgov/2011/06/26/the-business-case-for-corporate-social-responsibility/#3>.
- ↑ "Corporate Social Responsibility: An Implementation Guide for Canadian Business." Government of Canada, Industry Canada, National Capital Region, Office of the Deputy Minister, Senior Associate Deputy Minister, Strategic Policy Sector, Strategic Policy Branch. N.p., 5 Mar. 2012. Web. 16 Apr. 2014. <http://www.ic.gc.ca/eic/site/csr-rse.nsf/eng/rs00126.html Archived 2014-06-20 at the Wayback Machine>.
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