Essay on Impact of Corporate Social Responsibility

4 pages
1056 words
Harvey Mudd College
Type of paper: 
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

A companys social responsibility policy can complement its obligation to maximize profit for shareholders in different ways. Strategic motivation is the motivation that a company can use to engage in corporate social responsibility towards meeting its profit-making objectives. In strategic motivation, a company identifies social activities that consumers, employees or other stakeholders view as being of importance followed by integrating those activities into its objectives of maximizing profits. The strategic motivation confers a lot of benefits to both the company and the society at large. In strategic motivation, it is always ensured that a companys social responsibility activities are in tandem with a companys self-interests. A companys social responsibility efforts such as efforts to improve employees working conditions and taking part in efforts to reduce pollution can go a long way in maximizing a companys objective of making a profit. Studies have revealed that companies that are engaged in the selling of experience goods and experience services are more likely to take part in corporate social responsibility. The aforementioned companies are more likely to take part in corporate social responsibility because consumers perceive companies that take part in corporate social responsibility as being honest and committed to the provision of quality goods and services. Corporate social responsibility can play a major role towards maximizing profit by corporate social responsibility activities playing a role in a companys brand differentiation strategy. Profits can be maximized through corporate social responsibility by a company improving its reputation, by a company engaging in product differentiation and by a company asking for a premium for its goods and services. Given that corporate social responsibility is likely to improve a companys reputation, a company can utilize on its good reputation to attract highly qualified personnel who will go a long way in improving the companys efficiency which will, in turn, lead to increased profits. Employee loyalty is likely to be increased at the place of work courtesy of corporate social responsibility which in turn leads to profit maximization (Visser, 2015).

A companys social responsibility activities can affect the workplace, stakeholders, clients and other outside parties. Social responsibility may make the workplace conducive for workers due to the positive energy that is associated with being involved in corporate social responsibility. Stakeholders are likely to experience a higher return on equity courtesy of a company being involved in corporate social responsibility. Clients are more likely to be interested and associated with a company that engages in corporate social responsibility activities (Hunnicutt, 2009).

Corporate social responsibility policies can complement with profit-maximizing goals. Corporate social responsibility activities confer a good reputation to a company which is likely to play a major role in improving a companys profit-making activities. Customers are more likely to be associated with a company that has a good reputation than with a company that has a bad reputation. Given that many customers are more likely to be associated with a company that has a good reputation; this leads to an increase in a companys sales and consequentially, an increase in profits. Studies have revealed that one in five customers is willing to pay more for products from a company that is socially responsible. Customers are willing to go to the extent of paying a premium for products from a company that is socially responsible. Studies have also revealed that about ninety percent of consumers in the United States are more likely to buy products from a company that is socially responsible than from a company that is not socially responsible (Haerens & Zott, 2014).

Corporate social responsibility policies can conflict with profit- maximizing goals. There is a possibility for a company to use huge sums of money in corporate social responsibility activities that may fail to be recovered in the long run. A companys present and future cash flow values can be decreased by engaging in corporate social responsibility activities. Engaging in corporate social responsibility does not necessarily lead to a greater return on sales, increase profits. As a matter of fact, socially responsible activities may be very expensive. Given that socially responsible activities are not directly associated with the creation of profit, there is a chance that a company that is socially responsible may experience low earnings per productivity ratio. Even if customers pay more attention that is socially responsible, their patronage may not offset the high cost of engaging in socially responsible activities (Hunnicutt, 2009).

Privacy infringement as an ethical issue might affect employees confidence and respect for the company. When employees realize that their company is violating their privacy, they are less likely to repose their trust in the company. Lack of trust at the place of work will lead to underperformance. When shareholders realize that a given company is violating their privacy, they are likely to pull out their investments from the company. As a result, share prices are likely to plummet. Clients who realize that their privacy is being infringed by a company are likely to stop their engagement with the company. Outside parties are likely to cease their engagement with a company when they realize that the company is infringing on their privacy. Approaches to ethical decision making that I would recommend for creating a policy to solve the problem of privacy infringement are the rights approach, the utilitarian approach, the virtue approach, the fairness approach and the common good approach. It will have to be ensured that decisions are made that encourage human virtues, that promote fairness and that promote goodness for all people that will be affected by the decision. The company policy will ensure that no employee, client, shareholder or outside parties privacy rights are infringed upon. The policy will improve trust that employees have for the company. Employees work performance will be improved. Shareholders trust in the company will be improved. Clients will be more interested in associating themselves with the company, and outside parties will also be more interested in engaging with the company. As a result, the companys general performance will be improved (Fraedrich et al., 2013).


Fraedrich, J., Ferrell, O. C., & Ferrell, L. (2013). Ethical decision making in business: A managerial approach. Australia: South-Western Cengage Learning.

Haerens, M., & Zott, L. M. (2014). Corporate social responsibility. Detroit: Greenhaven Press.

Hunnicutt, S. (2009). Corporate social responsibility. Detroit, MI: Greenhaven Press.

Visser, W. (2015). The A to Z of corporate social responsibility. Hoboken, New Jersey : Wiley, Boston, Massachusetts : Credo Reference.

Have the same topic and dont`t know what to write?
We can write a custom paper on any topic you need.

Request Removal

If you are the original author of this essay and no longer wish to have it published on the website, please click below to request its removal: