Corporate Social Responsibility: A Path to Profitability

Posted on Dec 5, 2024 in Economy

Corporate Social Responsibility: A Path to Profitability

Introduction

Indifference to growing problems affecting humanity—pollution, violence, social disorder, loss of principles and values, increased depression, and de-legitimization of established order—will lead to global catastrophe. Businesses, professionals, the state, and educational institutions must assume leadership roles to combat these issues. It’s time to rethink corporate social responsibility (CSR) in all its dimensions; failure to do so will result in dire consequences. Parents, teachers, universities, business associations, regional governments, the state, the church, and all influential organizations must assume ethical, moral, and responsible leadership to prevent a grim future.

Although much is written about CSR, the focus has been primarily on environmental issues, sustainable development, and cleaner production. While crucial, these are not the only aspects to consider. Other initiatives emphasize social responsibility training and community impact, but often neglect vital aspects of healthy living and societal well-being.

CSR in business hasn’t been treated with the seriousness it deserves. Its philosophy often clashes with business interests, prioritizing profit above all else. This document presents components that make CSR interesting for entrepreneurs and production units, demonstrating that “SOCIAL RESPONSIBILITY IS GOOD BUSINESS.” CSR actions are investments, not expenses, generating revenue and profits—sometimes immediately, other times in the medium to long term.

A company is unlikely to adopt a CSR policy if it’s perceived as an expense. In business, everything is measured in costs and investment recovery. When CSR is recognized as a profitable investment, entrepreneurs and managers assume positive leadership, leading to a direct correlation between CSR and increased company earnings.

Scope of Social Responsibility

Corporate social responsibility combines legal, ethical, moral, and environmental considerations. It’s a voluntary decision, not an imposed mandate, although some regulations exist.

Focusing solely on producing and selling more at the lowest cost, regardless of social impact, is a short-sighted approach. Today’s strategies and expected benefits may lead to future failure. CSR encompasses internal (employees, partners, shareholders) and external (customers, suppliers, workers’ families, community) stakeholders.

Current business objectives focus on competitiveness and productivity. Productivity means producing and selling more cheaply and with excellent quality, maintaining brand growth in domestic and foreign markets. However, this focus on short-term cost-benefit analysis neglects the long-term consequences.

Market dynamics and the need to survive in a complex system often overshadow ethics and morality. The Machiavellian principle of “the end justifies the means” prevails, prioritizing profit over ethical considerations. Irresponsible actions are justified with pretexts like “generating employment” or “being the only way to be profitable.” This short-term focus on benefits ignores long-term consequences for society, humanity, and the environment.

Current Problems from Irresponsible Actions

Inadequate social responsibility is not caused by a single source. All elements of a state share responsibility: weak and irresponsible governments, corrupt systems, unconcerned educational institutions, ignorant businessmen, and unscrupulous employers. All sectors—government, universities, businesses, employees, parents, media—are responsible, either through action or omission.

To understand the problems, we must define “environment.” While often associated with natural resources (earth, water, air), the concept encompasses more. Humans need peace, tranquility, safety, well-being, harmony, and a sense of purpose. As social beings, we require more than just physical needs; we need emotional and mental well-being.

Current problems include:

  • Increasing global warming and its effects.
  • Increased acid rain and forest deterioration.
  • Water pollution and food contamination.
  • Land degradation and deforestation.
  • Extinction of plant and animal species.
  • Increased greenhouse effect and habitat alteration.
  • Ozone layer depletion.
  • Increased waste and disposal problems.

These environmental issues are alarming, resulting from a lack of interest and irresponsible behavior in the global production system. However, environmental issues are not the only threat. Other problems are growing daily.

The current social situation is characterized by violence, disorder, and mistrust. This affects businesses financially, increasing security costs, absences, property damage, and loss of customers. Negative events include:

  • Increasing violence and social conflict.
  • Lack of identity and belonging.
  • Stress and depression.
  • Emotional problems.

Other issues affecting families and society include:

  • Increased drug and alcohol abuse.
  • Increased kidnapping, rape, and robbery.
  • Increased theft and embezzlement.

These factors negatively impact employee productivity and the company’s financial performance. Additional factors affecting group work include:

  • Inappropriate relationships and family disputes.
  • Increased rates of anorexia and bulimia in adolescents.
  • Prostitution, including child prostitution.
  • High rates of homosexuality.
  • Growth of youth gangs.
  • Satanic practices.
  • High infidelity.
  • Increased suicide rates.

These issues lead to absenteeism, low motivation, and decreased productivity. Other factors include:

  • Negativity and pessimism.
  • Apathy towards self-improvement.
  • Lack of willingness to save.
  • Inability to accept constructive criticism.
  • Low sense of identity and belonging.
  • Conformism.
  • Lack of self-improvement and learning.
  • Frivolous attitudes.

Solutions and Social Responsibility

While this document highlights negative realities, it’s important to note that solutions exist. Many of the issues mentioned seem to fall under the purview of government, police, parents, and the church, but they all affect individuals, families, society, and businesses.

Company Liability for Existing Problems

Companies share responsibility for these problems through their policies (or lack thereof), management systems, and business practices. A lack of liability and responsibility is part of some corporate cultures. This section focuses on pollution, given its extensive documentation.

The lack of ethics and morality is a primary problem. The pursuit of profit at any cost prevents companies from paying due attention to CSR. Public immorality, lack of civility, and unscrupulous behavior affect business development and efficiency. Companies have a high degree of responsibility for these issues.

Entrepreneurs desire ideal employees: committed, team-oriented, intelligent, creative, honest, helpful, tolerant, patient, participatory, focused, and emotionally controlled individuals. While this ideal profile may seem utopian, it’s achievable. Individuals are not born polluted; society shapes them. Family and social environments create values, beliefs, and attitudes that are reflected in adulthood.

Education complements home training, but workplace environments reinforce or challenge these values. A good education is useless if the workplace encourages unethical behavior. Organizational environments can stifle positive development. Companies that don’t value personal well-being, emotional development, and cultural growth negatively impact employee lives.

Dangerous Excuses: Food for Thought

Several pretexts justify irresponsible behavior and accommodate financial interests. These include:

  • The “right to work,” often used to justify informal work and social disorder, ignoring the right to dignified work and the duty to respect public space.
  • The “adults only” label on TV programs, absolving programmers and advertisers of responsibility for children watching inappropriate content.
  • The “freedom of the press,” used to justify broadcasting violent content, regardless of its impact on viewers.
  • The “last minute” excuse for interrupting programming with violent news.
  • The “it’s the only way to do business” justification for bribery and corruption.
  • The “it’s their problem what they do with their money” excuse for inadequate wages and benefits.
  • The “each person lives as they please” justification for indifference to social problems.
  • The “it’s not my problem” excuse for ignoring wrongdoing.

These excuses demonstrate social irresponsibility. We must consider the consequences of our actions and promote change. Remember, we reap what we sow.

How Companies Shape Culture

Corruption and violence are major problems, and companies often contribute to them. Companies seeking brand positioning often advertise on programs with violent content, normalizing deception, abduction, lies, rape, and murder. Television, reaching most households, is a powerful medium, but its violent programming negatively impacts children and adolescents, who are highly impressionable.

Companies often claim that they are not responsible for the content of the programs they sponsor, but they have been contributing to a negative culture for decades. They are complicit in creating individuals with inappropriate behavior.

Responsible Corporate Actions

A socially responsible company establishes a culture of ethics, morality, principles, and values. Strategic planning must consider the benefits for individuals and communities. A company’s vision should not only focus on market share and financial stability but also on avoiding negative impacts on the environment and society.

A truly successful company achieves business objectives while benefiting individuals, families, and the environment. This starts with the employer and their officers, focusing on:

  • Establishing a code of values and ethical principles.
  • Training managers in ethical leadership styles.
  • Establishing a culture of discipline and accountability.
  • Motivating and encouraging ethical behavior.
  • Training employees in personal, family, and social well-being.
  • Caring for employee well-being.
  • Considering ethical, environmental, and social issues in all decisions.
  • Ensuring favorable working conditions.

A responsible company prioritizes employee and environmental health and well-being, adding value to the community.

Advantages and Benefits of Social Responsibility

Social responsibility is not merely philanthropic; it’s a profitable investment. Investing in CSR generates short-term, medium-term, and long-term financial benefits. It’s the best deal for a company.

Internal Actions:

  • Employee Well-being: Balancing work and life, providing training and development opportunities, promoting teamwork, avoiding negative leisure activities, promoting ethical principles, encouraging study and participation, treating employees respectfully, respecting differences, avoiding abuse of authority, applying fairness and equality, complying with labor laws, ensuring healthy work conditions, providing necessary tools, conducting health campaigns, encouraging sports and artistic expression, establishing clear rules, and avoiding compromise.

Impact on Employees: Reduced absenteeism, fewer conflicts, increased motivation, increased productivity, improved teamwork, increased commitment, improved quality, reduced errors, improved customer service, and reduced negative behaviors.

Family Well-being: Involving families in training, events, and activities; providing childcare; offering benefits; using families as suppliers; considering family needs; including families in health campaigns; acknowledging family events; promoting family savings and environmental protection; and sponsoring activities for children and family members.

Impact on Families: Increased employee loyalty, reduced conflicts, improved family harmony, and increased employee motivation.

Community and Customer Actions: Charitable actions, rational resource use, recycling, respecting public space, maintaining a clean establishment, participating in community actions, supporting local businesses, serving community groups, avoiding bribery, hiring people from excluded groups, avoiding sponsorship of negative events, and managing waste responsibly.

Impact on Community and Customers: Improved community relations, increased customer loyalty, reduced negative impacts, and improved brand reputation.

Conclusion

Social responsibility reduces operating costs, improves brand image, and increases employee loyalty. If professionals, universities, corporations, the state, and business associations don’t take CSR seriously, we will continue to face negative consequences. For a better future, we must prioritize social responsibility.