Summary

Corporate Social Responsibility (CSR) attracts increasing attention from

governments, activists, media and other stakeholders. The prevailing reasons
for companies being socially responsible are moral obligation, sustainability,
license to operate and reputation. It is originally assumed that companies and
society are in conflict. In reality, CSR can be viewed as potential competitive
advantage, not an unavoidable cost. Responsive CSR shows that the
companies are willing to be good corporate citizens and it addresses every
social harm that the companies creates. However, it is more favorable that
companies can be proactive to concern CSR in their strategies. Strategic CSR
includes inside-out and outside-in dimensions working in tandem. Looking
insides-out means to identify positive and negative social impacts of activities
engaged in during doing business. Looking outside-in represents societal
impacts on a corporation’s competitive context and success in what it does.

Additional thoughts
Apart from the reasons for CSR mentioned in the article, CSR can help
enhance employee recruitment and retention. The talents will be attracted, and
the existing employees will be retained since they prefer to work for
companies aligned with their values. Employees will be proud of their
companies taking social responsibilities, therefore they will be more engaged
in working. Furthermore, it encourages innovation if companies embrace CSR.
For example, Unilever has innovated a new product which is a hair
conditioner that uses less water. On the account of sustainability, the top
management led the research and development staff to strive for new products.
Brand differentiation has also been a reason for CSR for a long time. However,
it becomes harder for companies to differentiate their brands strongly by CSR
recently. Companies can still get returns and advertising effects. For examples,
Pepsi and Coke implement the same strategies of zero net water usage. Both
of them provide water bottles with sustainable packaging. Brand
differentiation is not highly effective, but they show that business contributes
to the sustainability, not only to maximize their own interests.

Considering the examples of Pepsi and Coke, responsive CSR is applied. Two
companies mitigate the existing and potential harms from operation. They
reduce the waste from operation by introducing sustainable packaging. In
contrast, TOMS founder uses strategic CSR. He goes to a poor country and
realizes that those children do not have shoes. Therefore, he determined to
establish a company which will provide those children with shoes. He believes
that children’s lives will be better when they have shoes to wear. Some
customers believe that it will help children to obtain their first pair of shoes
while paying shoes for relatively high price.

Well-known companies also want to gain reputation through CSR.

Unfortunately, there are some bad CSR that happens to companies. H&M
always claims sustainability as their CSR. However, it was discovered that
H&M destroyed and tossed unsold clothes and its organic cotton line was
contaminated with GM in the past. It is difficult for companies to achieve
100% sustainability. Although there are many bad CSR cases, some
companies indeed are commendable for their CSR strategies. Walt Disney
Company is the number one company in the entertainment industry. Disney
aims at strengthening communities by providing hope, happiness, and comfort
to kids and families who need it most. More than $400 million was donated
to non-profit organizations in 2016. Also, it has carried out a ‘VoluntEARS’
program which encourages employees to donate time for community service.
The community has been benefited from this program since 2012.

Grade: A