To what extent is corporate social responsibility(CSR) beneficial to company's performance?
To what extent is Corporate Social Responsibility (CSR) beneficial to a company’s performance?
An investigation of the correlation between Corporate Social Responsibility and key company stakeholders – customers, employees and investors.
After years of investigation, the European Commission, which defined Corporate Social Responsibility as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (European Commission, 2001), has recently claimed that full integration of CSR into business strategies would grant enterprises long-term success (European Commission, 2011). CSR and quantitative corporate financial performance (CFP) correlations have generally been found to be positive to insignificant (Reinhardt & Stavins, 2010). Yet, correlations between CSR and qualitative factors for company success still remained uncertain. Based on the above definition, this essay will study the interaction between CSR and some key company stakeholders. It attempts to investigate the linkage between CSR and qualitative factors such as customer perceptions, employee commitment and investor confidence.
Customer perception is an integral part of company success. Study showed that customers’ willingness to buy are dominantly based on their perceptions of the company (Smith, 2013). Hence, customer relationship management (CRM), which has direct impact on their perceptions, plays a crucial role in company performance. Lacey and Kennett-Hensel (2010) demonstrated a strong connection between CSR performance and CRM, stating that customer relationships could be strengthened by the adoption of CSR measures. By taking into consideration interactions with customers, such as customer experience and after-sale services, CSR activities could help promote customer satisfaction and reduce conflicts with customers. According to Kumar (2012), companies with better CRM are more
An investigation of the correlation between Corporate Social Responsibility and key company stakeholders – customers, employees and investors.
After years of investigation, the European Commission, which defined Corporate Social Responsibility as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (European Commission, 2001), has recently claimed that full integration of CSR into business strategies would grant enterprises long-term success (European Commission, 2011). CSR and quantitative corporate financial performance (CFP) correlations have generally been found to be positive to insignificant (Reinhardt & Stavins, 2010). Yet, correlations between CSR and qualitative factors for company success still remained uncertain. Based on the above definition, this essay will study the interaction between CSR and some key company stakeholders. It attempts to investigate the linkage between CSR and qualitative factors such as customer perceptions, employee commitment and investor confidence.
Customer perception is an integral part of company success. Study showed that customers’ willingness to buy are dominantly based on their perceptions of the company (Smith, 2013). Hence, customer relationship management (CRM), which has direct impact on their perceptions, plays a crucial role in company performance. Lacey and Kennett-Hensel (2010) demonstrated a strong connection between CSR performance and CRM, stating that customer relationships could be strengthened by the adoption of CSR measures. By taking into consideration interactions with customers, such as customer experience and after-sale services, CSR activities could help promote customer satisfaction and reduce conflicts with customers. According to Kumar (2012), companies with better CRM are more
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