You’ve probably noticed that as a company or company grows it is when they start investing on the entire company social responsibility (CSR) idea. But what exactly is it and what exactly is this CSR idea is? This idea dates back to the beginning of the 1800s, when it was the norm for wealthy individuals and businessmen to contribute to the improvement and development of their communities. Then, they began to do this thing as a CSR thing because they realized there were many obvious benefits an organization or company can reap from it. We are sure that at the moment, you could be thinking about what benefits an organization or business could reap from making investments in CSR, right? Don’t fret though because we’re here to answer that question because we’ll be talking lots about the potential benefits and drawbacks that corporate social responsibility can bring to a company. Let’s start will we?
Also Read: What is the Advantages and Disadvantages of Management Accounting?
Advantages Of Corporate Social Responsibility
As always, let’s look at the advantages or benefits of this corporate social responsibility issue since that’s the way to understand the reason why businesses and companies are investing in CSR.
1. Improves Business Image and Reputation
What do you think? In India the country, having a great reputation is the most important factor in business. When businesses get involved in CSR (that’s Corporate Social Responsibility) activities, such as taking care of the environment or assisting communities, it really improves their image. This isn’t just about fashion here, this positive attitude can lead to actual positive business outcomes later on.
2. Makes Employees Stick Around
CSR isn’t only about looking nice on the outside, it can be a great asset within the business too. In India in a country where employees are genuinely interested in ethical values, CSR is like magnets. It attracts people who are looking to join the company that’s doing a good job all over the world, and makes employees happy and motivated to remain. Companies that have solid CSR programs find it more easy to attract and retain employees who are eager to join a group that values.
3. Smooth sailing with the rules
Engaging in causes that benefit society will make navigating the government’s rules much easier in India. If you’re doing something positive for the community, those who set the rules will view you with a different perspective. This could mean less hassles in regards to observing the rules and creating a better atmosphere for your company.
4. Pulling in Investors
It’s true that more and more investors are starting to consider how businesses affect the environment and society before deciding where they will place their money. In India the speed at which changes are happening in the investment industry making a difference for the environment and society will definitely catch the attention of investors looking to invest in companies that aren’t just focused on making money, but concerned with doing the right thing.
5. Boosting Your Brand
Let’s be clear, CSR isn’t just about being nice, it’s also a smart strategy to get your company noticed. In India where it seems that everyone is in a race to be noticed making a difference for the community can bring your business to the forefront and make customers stay loyal to your brand for the long haul.
6. Making More Money
There’s plenty of research available that suggests that businesses who focus on CSR are more likely to earn profits in the end. Particularly in India companies that invest involved in CSR realize that they cut expenses, improve their job and, at final analysis, the accounts appear healthy as a result of it.
Disadvantages Of Corporate Social Responsibility
Now, let’s look at the insiders, or what’s really going on regarding corporate social responsibilities in the current contemporary era. Ready? We’re here:
1. Bigger Bills to Pay
The process of implementing CSR (Corporate Social Responsibility) items can eat into your budget, particularly in the case of a smaller company in India. If your business isn’t even getting enough revenue or is barely operating at a loss, committing to the added costs of CSR can be an enormous burden. If you decide to start taking on this corporate social responsibility business however, later in the line, perhaps several years later you may feel that you’re throwing money in the garbage and could be better utilized in different and more productive areas.
2. Investors Raising Eyebrows
Certain, CSR can draw in some investors, but other? It’s not so great. It’s all about cash. Within CSR, in the Indian market, which is populated by many investors, there are some who are cautious about investing money in CSR. They believe it’s a way of turning your back on the actual game, which is merely making money. In the end, investors want the most profitable return on their investment, right? Therefore, there’s nothing wrong with looking for actions that will work in favour to their ROI.
3. Risk of Greenwashing
This is the problem You know, some businesses might simply use the CSR card to improve their image, but not to aid in the process. This tactic is referred to as greenwashing. But the fact is, Indian investors and customers aren’t dumb, they’re becoming more sophisticated and are able to recognize this scam. If they spot your greenwashing, then oh boy you’re bound to get severe repercussions.
4. Customers Not Buying It
What’s the problem? If people think that your Corporate Social Responsibility actions are just for shows, they may be hesitant to trust your company. Particularly in India where trust is an important factor for customers’ loyalty. CSR actions that aren’t authentic can have a negative impact on your brand’s reputation.
5. Change away from Profit-Making Objectives
It’s true that balancing making a difference while chasing profit isn’t easy. In India where making money is typically what companies are about, putting much emphasis on CSR could cause you to forget about this. This may be unpopular with people who’ve invested their money into your company.
Conclusion
You’ve seen the potential benefits this CSR idea can provide for a company or a business you think? However, there are many businesses and businesses that are making up the CSR and, if you’ve read this article right from the beginning then you are aware of the consequences this fake player could be facing.
