CSR is not a new concept in the corporate world. The business organizations across the globe, both small and big have realized the significance of being socially responsible from the past experiences of many socially unsuccessful companies such as Enron. It has been well acknowledged by the corporate community that companies that seriously take care of CSR are more likely to sustain than those who do not. In fact, it takes into account the interest of all stakeholders. The benefits of being socially responsible are manifold. Some of the main include:
Conforming to the social and ethical corporate practices results in not only corporate citizenship but it offers a numerous benefits as well. Consumers always prefer to buy products of those who are at the helm of CSR. In an article from Practical advice for Business, the relevance of being CSR conscious is illustrated as, "sales of environmentally friendly" products continue to grow - and these products often sell at a premium price. Ben & Jerry's ice cream became as famous for its approach to responsible business as for its products" (Business Link, n.d.). The benefits of CSR companies as an entity of society are manifold. They include economic, social, and ecological benefits. Besides, company's overall performance including financial performance can have a multiplier effect
Corporate Financial Performance and CSR
The closeness of corporate economic performance and CSR has been a topic of debate among the scholars and practitioners for years. Many studies have been conducted across the globe since the inception of the concept CSR to find whether any relationship exists between financial performance and CSR. Perhaps, all might have come out with positive results, though a very few responded in the negative. Majority of the studies argue that there is a positive correlation between corporate financial performance and CSR (Doran, 1994; Berkhout, 2005). When companies become CSR conscious, they are offered a plenty of benefits (reported above) that eventually contribute to augmented profit. Apart from this, many Studies have been done to analyze whether there is any relationship between the stock price and the economic performance.
Recovery after a crisis is typically easier
One of the challenges faced by a company that wants to operate under the principles of CSR is that how to balance its social and environmental responsibilities with its more clearly defined economic responsibility to earn a profit. It is important for promoters of CSR to acknowledge that at some point the cost of being socially and environmentally responsible outweighs the benefits. When this happens, most firms will cease to engage in new initiatives. In