Corporate Social Responsibility and Its Importance

Corporate Social Responsibility
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Corporate Social Responsibility The financial performance of business organizations is integral to the sustainable growth and development of business organizations. However, it is important to recognize the fact that the underlying factors contributing to the financial performance of business organizations are heavily dependent on the organization’s relationships with its stakeholders. Hence, it is advisable for the leadership and management of business entities to invest on maintaining good relationships with all its stakeholders for sustainable growth and development of their organizations. The concept of corporate social responsibility (CSR) provides an excellent framework for business organizations to establish good relationships and reputations with all its stakeholders for sustainability (Liang, 2017). Maintaining long-term profitability and revenue generation, for instance, is a corporate social responsibility that safeguards the investors’ interests. It extends the organization’s lifeline through the shareholders’ continuous investments on the business organizations. However, failure to meet the interests and expectations of consumers and other stakeholders may threaten the sustainability of business entities. It suffices, therefore, that business organizations need to embrace corporate social responsibility as an integrated approach for maintaining good relationships with all its stakeholders towards achieving the sustainable growth and development objective. Provided herein is a research proposal on the concept of corporate social responsibility highlighting its importance, application, and perceived implications on the financial performance of business organizations. Importance of Corporate Social Responsibility (CSR) The relationships between corporate or business organizations and their stakeholders are often characteristic of policies and principles guiding their operational interactions. These policies and principles play the significant role of ensuring that business organizations conduct their operational activities in ways that meet the desired objectives and values of the society (Hirigoyen, 2015). In essence, corporate social responsibility refers to the obligations of business organizations to develop and implement operational policies, procedures, and principles of conduct that meet the desired objectives and values of society. The relationship between business organizations and its stakeholders including consumers, governments, and the public informs the latter’s perceptions of the organization’s values and principles across the social, political, and economic domain (Hirigoyen, 2015). The ensuing perceptions of an organization’s values and principles affects it overall performance in the market. Negative perceptions would negatively affect the consumers’ purchasing decision toward an organization’s products and thus hurting its financial performance. For instance, the increasing public awareness and concern for human rights and environmental preservation accounts for the surmounting pressure on corporate entities to embrace labor practices and production activities that...