Corporate social responsibility (CSR) is . As e-commerce begins to flourish, consumers have a wider variety of products and brands to choose from. Statistics derived from the U.S. Census Bureau indicate e-commerce will increase 62% by 2016; and with online shoppers already spending $226 billion this year, retail store shopping could soon become obsolete. With e-commerce on the rise, consumers will have the ability to choose whatever brands they want, and with consumer trends moving more towards purchasing products from socially responsible companies, the profit margins could experience substantial changes. For instance, The Social Responsibility Journal recently performed a research study concerning consumers' perception of companies who participate in corporate social responsibility. The results were as follows: "consumers perceived greater benefit and value in the offer of the socially responsible firm, and were showed to be willing to pay 10 percent more for its product, judging this price differential as being fair." Simply stated, consumers were willing to pay additional money for a product, if the product was produced by a "socially responsible company". This example of change in consumer preference helps to confirm the economic benefit CSR implementation will bring to companies who instate it.
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Concerns
Due to the aforementioned changing economic environment and the modified consumer purchasing habits, implementation of CSR appears to extremely beneficial to any company. Yet for many executives, the question of CSR implementation raises concerns. Milton Friedman brings to mind a valid argument, saying, by implementing CSR, "the corporate executive would be spending someone else's money for a general social interest. Insofar as his actions in accord with his "social responsibility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money."
Advantages
However, An article published by the Harvard Law School on Corporate Governance and Financial Regulation lists four advantageous effects of CSR.
Analysis of Implementation
After scrutinizing the two arguments, we can conclude, with the help of Harvard Law School's findings, Corporate Social Responsibility and Corporate Financial Performance have a positive correlation. Moreover, by participating in CSR implementation, as Friedman discourages, we can increase profits and competitive advantage, while still maintaining the commitment we swore to uphold to all stakeholders.
Processes Involved in Implementation
Within separate industry's, implementation of CSR objectives will vary. However, six main points of emphasis will always be the basis of implementation.
- Conduct a CSR assessment
- Develop a CSR strategy
- Develop CSR commitments
- Implement CSR commitments
- Verify and report on progress
- Evaluate and improve
By engaging in CSR implementation, from the upper echelon of a Top Management Team, to a low-level employee, financial and societal performance can be increased.