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The Benefits of Social Responsibility Programs

  • 7 January, 2025
  • Posted by: Orly Vidal
3,699 Comments
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In general, adopting a social responsibility program can promote unprecedent and lasting benefits for shareholders and stakeholders. While there are enabling factors to be considered based on the role of businesses on society, according to Pride, Hughes and Kapoor (2015) companies may assume two different perspectives. First, the economic model of social responsibility as a traditional view where businesses are only to produce and sell goods and services that buyers need. It incentivizes business as usual and conveys to governments the obligation of meeting society needs as a result of the taxes paid. Second, the socioeconomic model of social responsibility which has its motives in the impact of businesses on society. This concept is fostered through the implementation of initiatives aimed at cultivating loyalty, trust, and mutual accountability among consumers, employees, and suppliers. Each angle elucidates seemly and defensible justifications, leading to a widespread notion that companies exist primarily for their clients. However, to meet customers´ demands, businesses must produce or create particular goods and services, which in turn requires the involvement of employees and suppliers. All these parties are stakeholders within a social framework, engaging in daily economic activities and decisions that underline the importance of social responsibility.

Efforts to claim that social responsibility represents a burden on companies when it comes to profitability and meeting stakeholders´ needs may underestimate the fundamental reasons of business existence. Pride, Hughes and Kapoor (2015) define three positions to rely on socially responsible practices with long term benefits. Initially, firms respond to societal demands, therefore, they are part of society and its social challenges. Secondly, companies hold interdependencies among their technical, managerial, and financial assets, which are essential for addressing social matters. Thirdly, the power of long-term revenues lies on building stable environments by helping societies in their social issues. Fourthly, business autonomy can be pursued and attained through accountable decision-making processes. This approach may avoid further governmental involvement and interventionist actions. Thus, as global markets expand, the concept of corporate citizen may emerge and social structures advocate for good practices and more ethical behavior. Information is essential in this context, empowering individuals to hold companies responsible for their actions.

One of the fundamental elements to create awareness about social responsibility programs that lead to strategic benefits or revenues to firms and stakeholders, is by communicating the associated activities more effectively. This approach is suggested by Shuili, Bhattacharya and Sen (2010) who emphasize in building trust and improve stakeholders’ relationships based on investments in social endeavors, employment benefits, and fostering advocacy attitudes that favor companies and brands. Ultimately, effective communication should be treated in a manner that social and business interests converge, acknowledging that both, society and companies gain from social responsibility initiatives which extend beyond purely reaching profit goals (Kramer, 2006). In this case, continuous information and communication might prevent erroneous positions, persuading stakeholders to remain loyal to the companies, focusing on the social investments undertaken. 

Modes of Entry of Social Responsibility Programs

 The course of implementing a social responsibility program may take several steps that involve financial resources, organizational changes and other management activities. The process is described by Pride, Hughes and Kapoor (2015) as a mechanism to secure executive commitments, planning actions, directive initiatives through human resources and the audit section that monitors, evaluate and report social responsibility programs: 

Commitment of Top Executives: Associated with the engagement and leadership of senior executives or managers, who must ensure that the organization has the essential resources in place for the introduction of a social responsibility program. For instance, a company may establish a code of ethics along with a comprehensive policy statement that is applied across all levels of the organization. This framework is regularly reviewed by an executive committee to assess implementation metrics and promote continuous improvement.

Planning: It refers to the distribution of actions that will respond to the code of ethics and policy statement stablished by the top managers. For example, it outlines all the necessary activities to attain a social responsibility program within the organization and its stakeholders. It includes implementation units, resources, budgets and personnel. These elements may align with specific objectives, goals, strategies, metrics, and targets over a designated timeframe.

Appointment of a Director: After the planning step, a top executive may direct the program implementation. It may entail guidance and recommendations to embrace a social responsibility culture within the organization, by supporting and assisting employees through practical introductory tools. To facilitate the process, an individual can be designated exclusively to oversee, lead and pursue the new code of ethics and social responsibility policy statement.

The Social Audit: This document serves as a comprehensive report that outlines all the historical and current actions undertaken by a company regarding the social issues that may influence its operations. It assesses the effectiveness of a social responsibility program, typically analyzing both the positive and negative aspects across various implementation areas, including human resources, community involvement, business practices, safety measures, and environmental impacts. An example of a social audit can be seen in the Coca-Cola Company, which tracks its carbon footprint and environmental initiatives, aiming to reduce CO2 emissions by 25% annually from a 2010 baseline and an additional 25% by 2030, using 2015 as a reference point. This information is publicly accessible and is included in the company’s annual audit disclosure.  

In conclusion, adopting a social responsibility program can promote long-term benefits for shareholders and stakeholders. Efforts to claim that social responsibility represents a burden on companies may underestimate the fundamental reason of businesses. To create awareness about social responsibility programs among stakeholders, it is essential to effectively communicate the associated activities. The described modes of entry play a critical role in the process. Communication should be treated in a manner that social and business interests converge, acknowledging that both, society and companies gain from social responsibility initiatives. 

Reference List

Coca-Cola. “2020 Business &  Environmental, Social and  Governance Report,” 2020. https://www.coca-colacompany.com/content/dam/company/us/en/reports/pdf/coca-cola-business-environmental-social-governance-report-2020.pdf.

Du, Shuili, C.B. Bhattacharya, and Sankar Sen. “Maximizing Business Returns to Corporate Social Responsibility (CSR): The Role of CSR Communication.” International Journal of Management Reviews 12, no. 1 (January 15, 2010): 8–19. https://doi.org/10.1111/j.1468-2370.2009.00276.x.

Kramer, Mark R. and FSG Social Impact Advisors. “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility.” KSG Presentation, (October 10, 2006): https://pdfs.semanticscholar.org/77e9/9d84c1574c79cdbf15f1723637f7b24869c1.pdf.

Pride, W. M., Hughes, R. J., & Kapoor, J. R. “Foundations of business”. (Boston: Cengage Learning), 2015, 47-63.

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Author: Orly Vidal

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