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What are the Advantages and Disadvantages of Corporate Social Responsibility

advantages and disadvantages of CSR
July 14, 2021
Author : Syd Howell

To be able to evaluate the advantages and disadvantages of Corporate Social Responsibility, it is important to understand the meaning and scope of the term CSR. It is essentially a secondary objective of business administration. Therefore, it is widely regarded as a management concept. Incorporate social. Responsibility, business conglomerates and companies allocate a part of their resources for the larger good of the society. Corporate social responsibility generally relates to improving environmental and social aspects of society. To understand the purpose and objective behind corporate social responsibility, it will be prudent to study the following instance.

What is Corporate Social Responsibility?

Let us assume that conglomerate A is involved in the business of rubber manufacturing. During the processing and manufacturing of rubber into finished products, it is natural there will be high levels of emissions that pollute the environment. Therefore, it is only prudent that conglomerate A assumes responsibility in helping to conserve and protect the environment. Usually, a company involved in the manufacturing of rubber will assume the responsibility of helping communities that are engaged in a rubber plantation.

Instance 2: Company B is engaged in the business of selling instant coffee mixes. Coffee is an irrigation-intensive crop and generally requires a lot of water for an optimal crop. In the absence of sufficient rainfall, the coffee plantation workers often have to arrange for water supplies. The communities that are engaged in the coffee plantations may also get impoverished if the coffee crop does not give a good yield. Therefore, company A can support the plantation workers by helping them gain access to resources and technology.

 In Corporate Social Responsibility, a business readily takes up a role and prerogative of correcting and enhancing particular aspects of the environment or society through philanthropic work regardless of whether such sectors have been directly affected due to the activities of the company.

Corporate Social Responsibility

What is the Objective Behind Corporate Social Responsibility?

One of the most important purposes of corporate social responsibility is to ascertain the responsibility and accountability of large-scale profit-making organizations towards the public at large. It is aimed at ensuring that the international conglomerates that earn millions and billions in profit must also address their responsibility towards:

  1. The communities and groups are directly involved in the trade at the most fundamental level.
  2. The damage to the society and ecology caused as a result of their actions.

Who Regulates Corporate Social Responsibility?

It is important to understand that corporate social responsibility is essentially a self-regulating business model which helps a company emerge socially liable to the stakeholders and the society at large. For this reason, the term corporate social responsibility may also be called corporate citizenship. This is to essentially ensure that the companies are aware of the effect their activities bear on the environment and the communities. 

Advantages of Corporate Social Responsibility

Corporate Social Responsibility is a broad term that has a broad-gauged scope. All kinds of philanthropic work for the benefit of the society that is undertaken by a profit-making organization generally falls within the purview of Corporate Social Responsibility. In this blog, we will be discussing the advantages and disadvantages of CSR:

  • The business can bring about a sustainable change in the society or ecology while boosting its brand
  • Actively engaging in Corporate Social Responsibility efforts also helps a business in creating a robust and responsible image for its brand and the company as a whole
  • Taking up Corporate Social Responsibility initiatives also helps a company in forging a stronger connection with its employees. The employees feel a greater sense of affiliation when their company is actively engaged in projections of societal improvement.
  • It has often been observed that the companies that are most actively engaged in Corporate Social Responsibility efforts often also rank high on the “best places to work” index. It has been found that CSR is a significant motivating factor for employees.
  • It has been found that corporate social responsibility can raise the morale of the people at the workplace.
  • Actively taking up projects of Corporate Social Responsibility also helps in raising the morale of the employees of the company.

Starbucks, the coffee giant, helps communities engaged in coffee plantations around the world monetarily and by bringing about actionable change in their lives and surrounding ecologies. The company has been engaged in several projects that are directly responsible for building better houses, providing better technology and: 

  • assistance to these communities.
  • Engaging in CSR projects is also a great way to save tax. In many countries, heavy tax rebates are offered by the government to organizations that are engaged in CSR initiatives.

Corporate Social Responsibility2

Disadvantages of Corporate Social Responsibility

Whereas Corporate social responsibility is a great way to set accountability for a company, it can also be detrimental as the business may be scrutinized by public auditors to determine the accurate extent of their CSR efforts, the exact spending on philanthropic work and the actual change brought about in the lives of communities due to the company’s welfare project.

The company may be asked by the external auditors to provide a detailed report on their CSR efforts and contributions.

It is a fact that engaging in CSR is very advantageous for large-scale corporations. However, it may not be so advantageous for small-scale and mid-scale corporations. Many small and mid-sized businesses are actively engaged in CSR activities that may not be advertised and publicized like in the case of larger corporations.

Bottom Line

These are some of the most profound advantages and disadvantages of CSR. Students of management and business administration have to learn about the concepts of CSR. If you have been assigned a topic on the advantages and disadvantages of CSR, it is important to put together a detailed assignment covering the variegated aspects of the concepts without missing out on any important aspects. You can also take help from the experts at My Assignment Services. Here are some of the advantages of getting Humanities assignments help from our team:

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About the Author

Syd Howell

Syd Howell

Syd Howell writes blogs and articles for students to aid them in their humanities assignments. Earning a reputation in assignment writing, he is known in the assignment help industry for his contributions in the field of social policy and promotion of creative and cultural industries studies in the Australian universities. He provides students with assignment writing help and academic guidance in subjects ranging from history and linguistics to modern languages. Syd has been a humanity consultant with My Assignment Services before becoming a part of the assignment writing team.

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