How corporate social responsibility benefits the business growth

Revenue and return on investment have always been the key quantitative indicators of the success and growth of a company. Any activity that directly contributes towards an upward trend in these are considered of utmost importance on operational front. But there are some silent contributors, like Corporate Social Responsibility, which have a huge impact on the growth and profitability of the company. These silent contributors for long have been underestimated and unprioritised. Recently though a change is being observed in this scenario and the outlook towards corporate social responsibility is shifting focus from ‘what’ to ‘how’. Implementation of the initiatives is being taken as the primary account.

Corporates are realising how corporate social responsibility has constructive benefits towards the growth and profitability of an organisation. It is proved that an ethical and socially responsible corporate interacts with its audience in a positive light opening more doors of opportunity. Giving the organisation a competitive edge too. For CSR to have real impact on the profitability and growth prospects of a company, it has to be seen as more than donating money, blankets or planting trees. A corporate’s social initiatives should have meaningful and sustainable contribution towards the welfare of the society and environment.

The benefits of being a truly responsible corporate citizen are evident in enhanced relations with stakeholders. A corporate recognised for its responsible and ethical imagery, earns and maintains better relations with clients and customers. This translates into trust making the company a preferred business associate and the product a preferred choice of the client. It lays down the foundation for long lasting relations with the current clients and creates a better platform to start a dialogue with prospective clients. It can strengthen ties, build alliances and foster strong working relationships with both existing and new clients.

A good corporate citizen earns the motivation and loyalty of its employees. Employees respect and appreciate moral practices as it develops a humbling sense of belonging to organisation. A good CSR framework encourages both professional and personal development for the human resource. Providing employees with the opportunity to be involved in a company’s socially responsible activities can have the benefit of teaching new skills to staff, which can in turn be applied in the workplace for better results. By undertaking activities outside of their usual work responsibilities, employees have the chance to contribute to work and causes that they feel passionately about, or learn something entirely new which can help enrich their own perspectives.

An organisation that takes corporate social responsibility to heart is merited as an employer of choice for perspective employees attracting and retaining high caliber human resource. Studies show a robust corporate social responsibility framework can also help a company become more attractive to potential employees who are looking for workplaces with socially responsible practices, community mindedness and sound ethics.

Keeping social responsibility front of mind encourages businesses to act ethically and to consider the social and environmental impacts of their business. This way organisations can avoid or mitigate detrimental impacts of their business on the community. In some cases, organisations find ways to make changes in their services or value chain that actually delivers benefits for the community, where they once didn’t.

An organisation acclaimed as responsible also rightfully justifies good relations with the government, authorities and decision makers. Ethical practices help in avoiding unnecessary damages and hindrances in the path to success, like paying penalties and fines or litigation.

A company can convert the benefits of corporate social responsibility into opportunities and strengths to grow if the approach is not pseudo initiatives, but a very effective goal driven approach and implementation of the corporate social initiatives.

Corporate world also need to understand that it is not just the increase in spend which is going to assure their commitment to support initiatives aimed at impacting lives. Corporate sector must encourage the hiring of professional leaders and managers for the development sector to create an impactful CSR team which can help them in achieving each milestone of their corporate Social Responsibility (CSR) programme in the most effective manner.

Gaurav Shah, an Mba from Iim Calcutta and an Engineer from Bits, Pilani. With over 14 years of experience he now works as Director and Co-Founder of the Isdm.