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An ever-increasing issue in the corporate world is corporate
social responsibili
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By Nestler
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With the increasing number of scandals occurring in the U.S.,companies are trying to establish trust with their stockholdersand customers through corporate social responsibility. In thehistory of corporate social responsibility, there have been manymodels developed in an attempt to classify corporate responsesto social issues. In the early stages it was argued that acompany's main goal should be to gain legitimacy in societythrough different strategic approaches. This model had threeways in which a company responds to social issues. The first issocial obligation, in which companies only respond to the legalrequirements. This is below the standards of society. The secondlevel is social responsibility which refers to the companyacting at society's standards. The final level is socialresponsiveness which is the company exceeding society'sstandards.
The next step in corporate social responsibility is athree-dimensional outline for corporate performance.
The first dimension of corporate socialresponsibilitydeals with motivation for socially responsibleactivities, mainly economic, legal, discretional and ethicalactivities. The second dimension deals with societies' concerns,like environmental and product safety issues. The third andfinal dimension has to do with the range of the different levelsof response, going from doing nothing, to going above and beyondeveryone's expectations. These two models show the degree towhich a company is committed to being socially responsible.
Companies are beginning to notice the benefits of corporatesocial responsibility. An Interactive poll showed that 79percent of Americans take corporate citizenship into accountwhen deciding whether to buy a particular company's product."This shows just how important it is for companies to beconcerned about how society views their company. If societylearns about a scandal within the company, they will lose trustin the company and might purchase a competitors product. Howeverif they keep high standards they will gain loyalty with theircustomers.
An overwhelming percentage of company executives believe thatthe development of a corporate social responsibility plan willlead to an increase in business benefits but a heavily debatedissue is if there really is a relationship between corporatesocial responsibility and a company's financial performance.
A socially responsible company can gain access to extra capitalthrough investment capital. Many investors take notice if acompany is socially responsible and are more likely to invest ina socially responsible company. Socially responsible investingis one of the most dynamic and rapidly growing areas in thefinancial world.
By keeping an eye on the trends within society, one can buildthe trust and loyalty needed to ensure a bright sustainablefuture.
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