Corporate Social Responsibility

CORPORATE SOCIAL RESPONSIBILITY 5

This essay uses the article titled: Corporate socialresponsibility as a source of competitive advantage: The mediatingrole of social capital and reputational capital. ByMuhammad&nbspMohtsham Saeed and Faria&nbspArshad.

The article asserts that corporate social responsibility providesorganizations with social and reputational capital. The organizationis able to strategically use CSR to create good relationships and agood image in the eyes of the various stakeholders. The authors ofthe article argue that CSR can indeed lead to profitability in thelong run (Muhammad &amp Faria,&nbsp2012). The social andreputational capital that an organization gains will ultimately leadto profitability. The authors assert that the CSR responsibility canincrease a firm’s performance due to the good image to thestakeholders and the responsibility that the firm has towards thesociety and towards the environment (Muhammad &amp Faria,&nbsp2012).

Large corporations have a responsibility to adhere to the variouslegal government regulations regarding the environment and socialethics. However, as a CEO of a large corporation, CSR would be apriority in the organization I lead. It is evident from research thatCSR has a positive impact to the organization (McShane &amp Von,2013). Whereas CSR may not lead to a profit within a short time, itis evident that the good reputation with the society and the variousstakeholders such as the shareholders and the employees willultimately lead to profits. People are likely to support anorganization that cares for their social welfare and the environmentthey live in (McShane &amp Von, 2013). CSR would ensure that thelarge corporation benefits from the trust that the members of thesociety have in it. My view is that large and small corporationsshould play an active role in the maintenance of the environment andalso supporting the society in activities that enhance socialjustice.

Until recent years, stakeholders had not given the CSR a deepthought to realize the benefits that it carries. However, this hasbeen the case in recent years where stakeholders have given enormousattention to the issue of CSR. Stakeholders have realized that CSR isindeed a venture that can lead to profitability (McShane &amp Von,2013). The stakeholders have realized that it is extremely difficultto survive in the competitive market without engaging the society andhaving their approval. Customers are likely to avoid purchasing goodsor services from organizations that have a negative image or have badrelations with the community. The stakeholders have come to thisrealization and therefore they are largely relying on CSR to engageand influence the perceptions of the society towards theorganization. I would give CSR a substantial amount of theorganization’s budget. It is clear from research that theorganization will benefit ultimately in terms of profit from the CSR(McShane &amp Von, 2013). It is also meaningful to go for activitiesthat are not extremely costly such as cleanups. For example,allocating a certain amount to a cleaning exercise would ensure thatthe organization has a good reputation in the society. This wouldlead to increased performance and profits that would exceed theinitial cost of CSR.

The article articulates a number of opinions and ideas regardingCSR. To start with, the authors assert that CSR can indeed lead toprofitability. This is however possible after the organizationengages in the activities for a long time (Muhammad &ampFaria,&nbsp2012). According to the authors, CSR creates a social andreputational capital that is essential in ensuring that theorganization makes profits. The authors point out to the importanceof creating a good social relationship with all the stakeholdersincluding the potential clients in the society (Muhammad &ampFaria,&nbsp2012). Conducting activities that are beneficial to thesociety and that are sensitive to the environment such as plantingtrees create a good reputation for the organization which is good forbusiness. The authors also assert that numerous organizations are nowgoing beyond meeting the standard legal requirements for protectingthe environment and are engaged in CSR.

Reference

Muhammad,&nbspM. S &amp Faria,&nbspA. (2012). Corporate socialresponsibility as a source of competitive advantage: The mediatingrole of social capital and reputational capital. Journal of Database Marketing &amp Customer Strategy Management. Retrievedfrom: http://www.palgrave-journals.com/dbm/journal/v19/n4/full/dbm201219a.html

McShane, S. L., &amp Von, G. M. A. Y. (2013).&nbspOrganizationalbehavior. New York, NY: McGraw-Hill Education