Task 2Corporate Social Responsibility or CSR aims to ensure thatcompanies conduct their business in an ethical way and take notice of theimpact their business has on society, the economy and the environment. CSR can involvea range of activities such as working in a partnership with local communities,developing relationships with employees and customers and protecting theenvironment for a sustainable future. There has been a big increase in businessesthat operate to fulfil goals devoted to society and the environment as opposedto making financial profit.Adopting a CSR policy possess many benefits that apply toany business or organization, regardless of its size or sector. Introducing aCSR policy can help a business gain a positive reputation and increase itsbrand awareness; these factors can result in a higher chance of financialbacking from investors. Investors are more likely to invest in a company thatoperates ethically because ethical companies can be confided in to buildconsistent and sustainable profits without the harm of any fatal mistakes thatmay damages their reputation or potential.
An increase in investments meansthat ethical companies are exposed to better financial performances incomparison to companies that choose not to endorse a CSR policy. Embracing aCSR policy can also result in an increase in sales as well as customer loyalty;a company that is viewed ethically by its consumers can be able to use theirreputation and convert it into a competitive advantage. There currently existsa niche target audience of customers who prefer not to purchase or beassociated with companies that are not socially responsible. An increase insales and customer loyalty means that companies that operate inn an ethicalmanner are much more likely to receive sales than companies that choose to notabide in an ethical manner of operations. Another benefit, of adopting a CSRpolicy is that companies have the ability to retain their current workforce aswell as being more likely to attract new talent externally; an increased andmotivated workforce can benefit an organization greatly.
The more staff abusiness has on hand, the higher the standard of customer service is likely tobe administered to them; an increase in customer service means that customersare more satisfied, more likely to recommend the business to a friend and morewilling to spend more money there. A motivated workforce also increases theefficiency and output of a business. Despite the various advantages adopting a CSR policy canbring, it could also possess some drawbacks to companies; the main drawbackbeing that in business