Improve Business Performance by CSR
CSR is an acronym standing for Corporate Social Responsibility. It is about the voluntary support of a sustainable development by companies. Sustainable development is the idea of minimising ecological and social damages while considering economic interests – it tries to bring in line all three dimensions (ecology, social, economy). Among these dimensions there are interdependencies which are the reason why it is important to consider all of them at the same time:
- Ignoring social issues, for instance, bad working conditions or very low salaries, might lead to property and poorly educated workers. These circumstances reduce productivity because of the little performance of the personnel which has negative influences on the economic as well as on the ecological targets.
- Bad ecological conditions, for instance, environmental pollution or factory farming, might have a significant impact on human’s health which also may limit worker’s performance. Therefore, polluted environment have negative influence on both, social and economic issues.
b) Reasons for CSR:
- As a consequence of global warming and social grievances worldwide, customers and public pressure force companies more and more to re-engineer their corporation in favour of sustainability issues. In general, CSR can be used as an instrument to improve a company’s reputation which is quite valuable for being successful in future business. Especially for brand differentiation, CSR helps to separate the company from competition and to develop a unique selling proposition (USP).
- CSR in a company can also have positive impact on the motivation of a company’s employees. Usually, employees demonstrate more engagement if they have the feeling of being part of something good or rather are able to contribute something good to society/environment with their work performance which leads to more productivity.
- Furthermore, good corporate reputation through CSR is also a way to attract highly qualified personnel which can be a valuable attribute for differentiation.
c) What is important?
- As you can see CSR has a positive impact on a company’s performance. However, CSR as a form of self-regulation only works well if each employee in the company tries to follow this concept. Therefore, CSR should be an important part of the corporate identity to apply the concept successfully.
- Moreover, CSR shouldn’t be used as a method in order to receive short-term gains. It’s a business model which ought to be based on a long-term strategy.
- One of the most important aspects is creating credibility and trust. If you don’t accomplish your commitment to sustainable development (e.g. Global Compact), you will lose credibility and trust. It is safe to say that this have a negative impact on your corporate reputation because customers will feel cheated and avoid buying from you.
d) How business can work with charity?
CSR is an all-round concept. It doesn’t concern the internal business processes of a company only, it is also about the conditions in the company’s supply chain and the needs of stakeholders (e.g. customers, suppliers, communities etc.).
CSR is not about resigning gains because achieving or rather maintaining competitiveness is important. Nevertheless, a company’s internal processes must consider ecological and social aspects in order to fulfil the requirements of CSR, for instance,
- ensure safety standards,
- no exploitation of employees (e.g. appropriate salaries, working hours),
- compliance of human rights,
- decrease resource consumption,
- reduce waste.
CSR concerns not only the internal processes of a company, but also all steps along the whole supply chain which includes manufacturer, supplier, wholesalers, retailers and customers. Make sure that each step of the supply chain implements CSR, too.
