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Building and managing a partnership with all people, institutions, and businesses within the business environment is known as corporate social responsibility, and it has the goal of enhancing the reputation and trustworthiness of the corporation and the manager. To be effective, relevant, and competitive in the worldwide corporate climate, an organization's strategy must take stakeholders like the government, business partners, clients, trade unions, and the community in the area where it operates into account (Saeidi et al. 341). For instance, the company should make sure that its operations in a location do not have a negative impact on the local population's environment. Most importantly, the company needs to collaborate with the stakeholders to understand their interests and formulate policies that accommodate everyone. The practices should favor both management as well as the stakeholders leading to a win-win situation where business is capable of managing its risks and profits and at the same time serves the interests of every stakeholder. This requires critical thinking by the management since it might interfere with the reputation of the company brands. A company which is socially responsible attracts talented employees and enhances customers’ loyalty in the region. The good relationship created by the organization for being accountable to the society is also vital in maintaining competitive advantages which are crucial to business success (Saeidi et al. 350).
The primary stakeholders of an organization include the owners and investors, customers, local communities, customers, and employees. These people must be made aware of the organizational culture and how business is intending to achieve its goals (Asif et al. 7). Specifically, the individuals who are involved in implementing corporate policies are the employees. The management should establish a proper foundation of codes, and support them through training to promote compliance with ethical practices. Besides, the management should have a clear understanding of the legal requirements in the region and the interest of the locals (Asif et al. 11). Having known what is required by the locals and how the business can improve the living standards of stakeholders is a positive step towards being socially responsible. It will enable the company to limit its practices within those requirements. Challenges come when a company wants to balance its interests and that of the society. Apparently, being socially responsible involves some costs. For example, the management needs to spend in training the stakeholders on the ethical issues. The company is also expected to help the society through donations. All these requires money and therefore should be planned for to avoid running into losses.
Customers are naturally attracted to a company with a good image. One way of gaining a good image is being responsible to the community and working towards improving their welfare as a firm (Ljubojevic et al. 556). The responsibility would provide a mutual value for the society and the company. It also enhances the sustainable development of a business vision and expands the transparency of organization. These motivates the customers and improves their trust making them loyal to the company. But with all these, a company need to have best services for their customers to achieve competitive advantages. Just being responsible socially is not enough (Ljubojevic et al. 565). The quality of products a company takes to the marketplaces should outdo the ones for its competitors to win as many clients as possible.
Asif, Muhammad, et al. "An integrated management systems approach to corporate social responsibility." Journal of cleaner production 56 (2013): 7-17.
Ljubojevic, Cedomir, Gordana Ljubojevic, and Nina Maksimovic. "Social Responsibility and Competitive Advantage of the Companies in Serbia." MIC 2012: Managing Transformation with Creativity; Proceedings of the 13th International Conference, Budapest, 22–24 November 2012 [Selected Papers]. University of Primorska, Faculty of Management Koper, 2012.
Saeidi, Sayedeh Parastoo, et al. "How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction." Journal of Business Research 68.2 (2015): 341-350.
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