CORPORATE SOCIAL RESPONSIBILITY
Corporate social responsibility it is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. It is a response to the imbalances arising from accelerated globalization process (Swift, Zadek, 2002). Most blue chip companies in the world have very strong corporate social responsibility policies. Take an example of Hong Kong & Shanghai Banking Corporation (HSBC). The company does not only provide the customers with the necessary services but also manages the impact of the company on the society and environment. It invests its future of employees and community. After all that, one would think that the company made massive losses but the company still made profit. According to Treanor (2015) the HSBC despite the 1.5 billion dollar misconduct charge, they still managed to make a10% increase in profits. That said and done, this paper will dwell on the pros of corporate social responsibility as highlighted by the example given above and why shareholder should approve the funding.
First of all, people involved in business are there to make profit. It is therefore incumbent upon the person in charge (C.E.O) to make proper and informed choices that will result to profits for the shareholders. Corporate social responsibility, for starters, enhance customer loyalty. The moment customers are satisfied by the required services of a company and other supplementary services offered by the company, the company can be assured of its customer’s loyalty. Once the company keeps its flow of customers and even attract more, the first step of profit making is achieved. Customers will also consider to work with a company that has a vision and a company that can connect with them.
On the environmental issues, when the pizza enterprise venture on corporate social responsibility, it will not only conserve its neighboring environment but also save due to reduced wastage. It will manage to cut on utility bills and waste disposal costs. Utility bills such as energy usage will be cut when cheap and renewable energy is used and consequently the environment will be conserved (Admin, 2013).
Corporate social responsibility give employees a sense of belonging. It makes employees loyal too. With loyal employees, the pizza business will thrive because of their responsibility attitude in them. There will be less disruptions such as strikes during the running of the business. With such smooth running, more profits will be generated. Again, a company with proper corporate social responsibility, highly skilled employees will aspire to work there. Skilled employees translates to better products (pizza) and better products translates to satisfied customers and hence high profit margins.
With that implemented, the company can also aspire to work with other companies that have the corporate social responsibility. In so doing, there will be improved living standards in the community for both employees and shareholders.
The funding of such policies can be considered the real headache. The 5% of the company's profit being allocated to CSR is negligible compared to the gains of it. A chain of restaurants can increase its profits from such practices. A few units of electricity saved during a single pizza processing can result to huge savings per month resulting to a massive drop in the utility bills. When materials used to make pizza are well recycled, then the expenditure list will shrink and increase the profit margins thereby rendering the 5% negligible. The headache of hiring new employees will also be solved and thereby more time will be allocated to important profit making activities.
Bibliography
Admin, (2013), Benefits of Corporate Social Responsibility. Borgen Magazine. Available at http://www.borgenmagazine.com/benefits-of-corporate-social-responsibility/
[Accessed 29 April, 2016].
Swift T. & Zadek S. (2002). Corporate Responsibility and the Competitive Advantage of Nations, Copenhagen , Denmark.
Treanor J., (2015) HSBC profits rise 10% but 1.5 bn in misconduct charges dent bank figures, The Guardian. Available at http://www.theguardian.com/business/2015/aug/03/hsbc- profits-rise-10-boosted-by-bumper-hong-kong-earnings. [Accessed 29 April, 2016]
