Okay, so I am going to try to explain corporate social responsibility in a nutshell with little use of anything too technical of words. This will not be easy but I will do my best to get the message across. So CSR or corporate social responsibility is a new approach of many companies to not only make a profit but also help the community and environment. This is a response to all of the years of concentrating on profit, and finally gives back to the community. Of course this is not just a move to help people nor is it just marketing move… there is a good reason for companies to do this.
Explaining corporate social responsibility without letting you understand a few terms, so I will first explain one or two to you. First is “Sustainability theory” the thought of using the company to use raw materials that would uplift the community that produces it, and produce products that help and fulfill the needs of the community. And “Stakeholder Theory”, which aims to please all the stakeholders of the company, and that includes everyone, form the managers, to the workers, customers, and even the community. This is an interesting and we will be expanding on that later in a more layman approach. These two will suffice for now to just give you the essence of what corporate social responsibility is.
Now, money has always been the main goal of businesses, or to be more precise “Profit” is the main pursuit of business for centuries, maybe even thousands of years. But recently some companies have shifted their sights to their social responsibility, they found that sustainability is essential for their continued existence, if they continue to pursue just profit without looking at those around them they will sooner or later run out of people to sell to (oversimplification), it dawned to them that it maybe be necessary that they should make sure that the communities and fellow companies around them continue to exist, because if no one except them have jobs and money, who will buy their own product.
Companies have also discovered that taking care of their stakeholders is essential to lead to good profit. Remember those direct T.V. commercials that show silly domino effects? Well, I will be using that to explain this theory: If you are the owner or is in the board of a fairly large company and only think of profit for the company you will try to cut cost, when you cut cost you make employees less happy, when they are less happy they are less productive, when they are less productive, their managers get frustrated, when the managers are frustrated overall morale of the company goes down, when this happens the quality of goods the company produce will go down, when the quality goes down customers move to other brands, when they move to other brands profit goes down, when profit goes down you lay people off, when that happens the community will be unsatisfied with your company, and when that happens your company as a whole will slowly collapse.
Again, the explanation I gave was very simplified. But it should have allowed you to understand why companies are opting to doing CSR, it is now the best and only way to truly succeed as a business.