Corporate Social Responsibility Investment and Strategies

 In the earlier days, CSR was viewed as a corporate charity until the early 90s. Since then, companies are now seeing CSR as a strategy for surviving the current uncertain and turbulent environment. In other words, businesses have now realized that CSR can be used to gain a competitive advantage within an industry. According to Barnett, companies are part of the society. The company’s operations affect many people, not just stakeholders. As a result, just like human beings, companies should also be responsible members of the community in which they operate. Barnett adds that the current organizations have recognized their responsibilities to society in term of CSR. These responsibilities are in four parts, namely, economic, ethical, philanthropic, and strategic. Meeting these four obligations is very critical for their sustainability.

According to Brown, Companies all over the globe spend trillions of dollars to create a favorable perception in consumers’ minds, something which results in numerous benefits, with trust and commitment, better attributes, appraisals and buying intentions being among them. What is more, favorable corporate associations can form an important protective shield towards the corporate crisis, given that they positively affect consumers’ reactions. However, most of the recent theories of corporate social responsibility state that companies engage in profit-maximizing CSR. In other words, companies are believed to be socially responsible because they expect to benefit from CSR activities. The benefits include reputation development, the capacity to charge the best prices for the products, and the use of CSR to attract top talents and minimize employee turnover rate. These benefits are supposed to compensate for the high cost associated with CSR because resources have to be apportioned to enable companies to attain CSR status.

The viewpoints of different studies on CSR are relatively varied. They include studies on voluntary work, corporate citizenship, the relations between companies and the local community, corporate philanthropy, theories of social and environmental management, and the propagation of information on CSR activities. Social responsibility has become a very important part of every organization’s existence. The strategic decisions of these organizations have a social and economic impact, which are closely interconnected. Porter and Kramer emphasize the interconnectedness between society and organizations. For this reason, the organizational strategy must take into consideration societal welfare and expectations. The management must bear in mind the positive and negative impact of the strategies used not only to the organization but also to the stakeholders and society at large.

Several studies emphasize on how CSR activities are likely to be integrated into companies’ marketing strategies. They also stress the significance of lopsided information. This paper will examine whether the models of CSR activities are in tandem with CSR strategic application. Also, the pa, per will explore the use of CSR between companies selling experience commodities and those selling credence commodities. The paper will explore recent theoretical studies on the strategic use of CSR and identify key arguments between the authors, as well as their theoretical positions.

Strategic CSR
Baron and McWilliams and Siegel were among the first authors to model how companies use CSR to maximize profit. These authors emphasized on strategic CSR. Baron defines corporate social responsibility as an individual provision of public goods. More significantly, Baron states that firms normally compete for socially responsible clients by overtly linking their sales to social contribution. For example, a company may decide to donate a portion of its pre-tax profit to social causes. Similarly, McWilliams and Siegel use a simple hypothetical model to explain how two companies dealing in the same products can use CSR as a strategic tool for marketing. One company decides to attach an extra social attribute to its merchandise. This attribute is treasured by several clients, or probably by some stakeholders. In this model, companies carry out economic analysis to establish the number of funds and expertise required for CSR activities. In simple terms, companies concurrently weigh up the demand for CSR and the resources required and then determine the best possible level of CSR be provided.

The main implication of this model from the CSR point of view is the fact that CSR activities are likely to be integrated into the firm’s marketing differentiation plans. For instance, a hybrid version of Toyota Accord emitting fewer greenhouse gases than a luxurious version may be preferred by a section of the consumers. Furthermore, some consumers may be willing to pay more for the hybrid version than the luxurious version because the social attribute of less emission is important to them. Another type of CSR is the CSR related to the production process. This type of CSR emphasizes on the level in which the company’s production techniques are socially responsible. For instance, most food companies normally label their products as either organic or inorganic to denote the use of inorganic fertilizers and pesticides.