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A business’s job is to make money right?
Yes, and . . .
Research shows the consumers expect businesses to make money and help the community. Read further to learn about this second expectation, known as corporate social responsibility, or CSR. Before looking at CSR as a dynamic whole, we explore each of the three words.
While many assume corporate social responsibility applies solely to businesses and corporations, in truth any incorporated organization falls under the CSR umbrella. The far-reaching umbrella covers businesses, firms, enterprises, nonprofits, and associations. For simplicity sake, let’s call all entities firms. Just like people are assigned a Social Security number, firms receive corporate social responsibility expectations. In other words, expectations come with the territory.
Firms covered by the CSR umbrella encounter expectations in four arenas:
As a business, society assigns responsibilities to your firm. Whether or not you like the assignment, you’re still tasked. Just as teens face consequences and rewards for failing or successfully meeting curfews, so your organization will receive rewards and punishments for the way you fulfill your responsibilities.
All Together: What Does Corporate Social Responsibility Mean?
Corporate social responsibilities mean that firms encounter obligations to look and act outward, not just inward, as they operate. Key obligations include meeting economic, legal, ethical, and philanthropic expectations. Failing to fulfill these obligations triggers negative consequences. Fulfilling your obligations brings rewards. Effective corporate social responsibility increases profits. One specific example? The Reputation Institute found that for every five points a company’s CSR reputation goes up, recommendations from customers increase by nine percent.
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