For many years, community development goals or social responsibility were philanthropic activities that were seen as separate from business objectives. Doing well and doing good were seen as separate activities. But that thinking is changing. Organizations that are developing cutting-edge technology are considering social and environmental considerations in business strategy from the very beginning.
There has been a significant increase in the awareness of people and people as customers are coming forward with requests and proposals for the support of social causes. These requests are for a wide range of issues which include health and public safety, education, community development, animal rights protection, sustaining the environment, etc.
Corporate Social Responsibility is a commitment to improve community well-being through discretionary business practices and contributions of corporate resources.
Corporate Social Initiatives are major activities undertaken by a corporation to support social causes and to fulfill commitments to corporate social responsibility.
Looking at the Fortune 500 organizations reveals that corporate social responsibility, corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations and affairs, community development, corporate responsibility, global citizenship and corporate societal marketing.
According to Giving USA, a charitable giving by for-profit corporations has risen from an estimated $9.6 billion in 1999 to $12.19 billion in 2002.
The customer awareness has also increased dramatically over the years. Customers now want to associate with products that are produced for a cause. A study conducted by Cone/Roper on consumers found the following facts:
- Eighty four percent said that they have a more positive image of companies that do something to make the world better.
- Seventy eight percent of adults said that they would be more likely to buy a product associated with a cause they cared about.
- Sixty two percent said that they would switch retail stores to support a cause.
- Sixty four percent believe that cause related marketing should be a standard part of a company’s activities.
Today, the foremost agenda are concerns over climate change and environmental sustainability. One survey finds that over 50% of consumers and business leaders sampled in ten countries rate environmental issues, including climate change as the most important issue facing business.
Corporations are finding it CSR as a good concept, because many corporations are gaining in terms of decreased operating costs and increased revenue from grants and incentives for, “going green”.
- Coca Cola one of the world most recognizable brands has taken up an environmental responsibility by eliminating all its hydrofluorocarbon (HFC) refrigerators and coolers with more sustainable cooling systems. Coca cola worked with environmental group Greenpeace for a new refrigerant technology. Coca cola wants 0% HFC refrigerators by 2015 all over the world.
- Another example is about Nike. In 1996 when reports of physical and sexual abuse of workers, salaries below the minimum wage, and an exploitative quota system surfaced from its Vietnamese and Indonesian suppliers, the company’s sales dropped precipitously for months thereafter, as did its reputation.
- Recently, social networking giant Facebook was in news for announcing one of its new location to be powered from coal. This move triggered a massive response as 400,000 users of Facebook joined Greenpeace in protesting the company’s plan.
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This article is in continuation with our previous article on Corporate Strategy which include PEST Analysis