Few topics in business invite as much controversy as social responsibility. Even though businesses are important for the functioning and prosperity of the economy, they also generate a substantial negative impact on society. Corporate social responsibility (CSR) is an idea that businesses are obliged to respect the ethical rules of employing workers, rules of preserving the environment, and engage in other activities, which do not directly generate profit but are nonetheless important.
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There are three ways CSR can actually benefit companies. First, modern society is increasingly sensitive toward any violations of human rights and environmental damage. Any company, which depends on the exploitation of land, damages the environment, or forces people to change their place of residence, attracts negative publicity. Subsequently, fewer customers are inclined to deal with such companies (Sroka & Szántó, 2018). As a result, following CSR has reputational benefits.
Second, governments institute laws, which force companies to follow CSR. As global ecology worsens, the deterioration is attributed to business activities, which rely on the exploitation of natural resources for profit. The subsequent response by governments is the implementation of restrictive laws, which force companies to comply with standards (Sroka & Szántó, 2018). Therefore, if a company follows CSR, it has nothing to fear from new restrictive legislation.
Finally, a company, which follows CSR, attracts more candidates willing to work for it. A major way businesses can improve their reputation is via the ethical treatment of workers. It includes assurance of their safety, proper compensation for their participation in hazardous operations, and medical coverage (Sroka & Szántó, 2018). If a business follows such rules, more people will express the desire to work for it.
Sroka, W., & Szántó, R. (2018). Corporate social responsibility and business ethics in controversial sectors: Analysis of research results. Journal of Entrepreneurship, Management and Innovation, 14(3), 111-126. Web.