Taking Your Business To The Next Level!

 CORPORATE SOCIAL RESPONSIBILITIES 

Imagine you’re a business owner. You’ve got a company, workers, suppliers, raw materials and a massive customer base. In order to be a successful businessman what should be your main objective? Undoubtedly, you need to maximize profits. In order to maximize profits, you need to either cut costs or increase the selling price of your product. Profit is equivalent to the total revenue subtract the total cost. These costs include transportation costs, the cost of raw materials, wages, rent, electricity bills, etc. Increasing the price isn’t usually an option for businesses. As the business environment in very dynamic, it is foolish to increase prices in hopes of greater profits. Firms compete rigorously among each other to attract more customers. Changes are made every second and innovation is the prime component in such environment. Therefore, a firm choosing to increase prices is bound to lose customers to other firms in the same industry. The law of demand is a fundamental economic principle which states that at a higher price, consumers will demand a lower quantity for a product. Hence, it can be deduced theoretically, that if a business increases the price of its product without making any changes to its features, the demand for that product is bound to go down given that all other factors remain constant. This is why most businesses focus on product differentiation and R&D (research and development). However, these require high expertise and a large amount of capital which most businesses aren’t able to afford. Thus, they go for unethical ways of business operations which helps them reduce costs and make more profits in the short run. Some examples of such unethical practices are, using expired or perished goods in production, hiring child labor, providing unsafe workplace and equipment to workers, polluting the environment with wastes from production, pressurizing employees to work long hours and not allowing emergency leave, paying lower wages, etc. This sort of business practices do help firms maximize profits in the short run but in the long run this can have severe negative impacts. Businesses tend to expand in the long run as they experience increasing economies of scale, which is a comparable cost saving achieved by greater production. Upon expansion a business cannot continue these unethical practices as giant businesses are continuously monitored by all its stakeholders which include, the government, consumers, workers, investors, retailers, shareholders, suppliers, competitors, pressure groups and the media. Any unethical business decision will highly affect the business. Some of these negative impacts that are generated by unethical business practices in the long run are, loss of investors, consumers, suppliers and skilled workers, costly lawsuits and a bad image. Therefore, to avoid these challenges in the future, businesses nowadays follow corporate social responsibilities.

Beyond profitability, growth rate, and brand awareness, company success is defined in broader terms. Customers, staff members, and other stakeholders in today's world evaluate a firm based on how its operations affect the local community, economy, environment, and society as a whole. In other words, whether it is concerned with the greater good as opposed to just more profit. Practices in corporate social responsibility can show customers where your company stands on the issue. Corporate social responsibility (CSR) is a form of business self-regulation that aims to promote social accountability and a beneficial societal impact. A firm can embrace CSR in a number of ways, such as by being environmentally friendly and eco-conscious, encouraging equality, diversity, and inclusion at work, treating employees with respect, giving back to the community, and making sure business decisions are moral. A company should consider its key issues, business objective, and values to identify the CSR projects that best support the culture and aims of the organization. This will help assure the authenticity of the CSR program. The company may carry out this analysis on its own or by hiring a third party.

It's becoming more and more crucial for businesses to project an image of social responsibility. When selecting a brand or business, consumers, employees, and stakeholders place a high value on CSR. They also hold businesses accountable for bringing about social change through their values, operations, and profits. Thus, following corporate social responsibilities are very important for businesses nowadays.

Hyperlinks:

https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/corporate-social-responsibility

https://www.investopedia.com/terms/c/corp-social-responsibility.asp