Importance Of Csr

1380 Words6 Pages
Is Corporate Social Responsibility (CSR) beneficial to a company’s performance? What stance should companies therefore take towards CSR initiatives?

The past decades have witnessed the surge in importance of corporate pro-social practices, which has aroused widespread controversy about the attitude companies are supposed to take towards the executions of Corporate Social Responsibility (CSR). While CSR campaigns have been launched by a large number of corporations, their effectiveness in benefiting company performance is still under challenge. CSR is defined as the concept whereby social and environmental concerns are voluntarily synthesized by companies in their business operations and in their relationship with stakeholders (Commission of
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This essay argues that CSR initiatives tend to have a positive correlation with company performance, which underpins further practices that cater for the society and environment in the cosmetic industry. In the following paragraphs, the external influence of CSR, mainly the enhancement of brand image and consumer loyalty, will be analyzed, followed by the investigation of the internal influence including the reinforcement of employee commitment, and subsequently the discussion of the limitations of the practices under various circumstances.

It is widely believed that CSR is a farseeing marketing strategy and has significant influences on brand image and consumer behavior. Two reasons contribute to this advantage. For one thing, most consumers show preferences for socially reputed brands when evaluating similar products; for another, a firm could sharpen its competitive edge by focusing on non-economic factors. CSR could therefore be conducive for firms to establish a better brand image and promote consumers’ positive attitudes, making it an essential source of competitive advantages (Porter & Kramer, 2006, as cited in He & Lai, 2014). These advantages tend to be more important for companies in the highly-saturated cosmetic industry, where features among competing brands may not be significantly
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A number of studies have found positive external and internal effects of CSR activities on the performance of a company, and many analyses of real business cases have appeared to lead to similar conclusions. What deserves researchers’ attention is the quantification of CSR-related studies as well as CSR decisions under various circumstances in the cosmetic industry. Further investigation may benefit from examining the impact of CSR policies on company performance quantitatively, such as tracking the company’s sales, profit or stock price, and make comparisons of the figures with those of previous corresponding periods. Another research direction is to analyze cross-border pro-social practices and CSR executions of small cosmetic companies. Until then, the evidence presented in this essay leads to the conclusion that CSR activities appear to be beneficial to company performance, and companies are therefore recommended to engage in an appropriate amount of socially responsible practices on the basis of actual
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