The Definition Of Corporate Social Responsibility In Business?

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While there is no universal definition of corporate social responsibility (CSR) due to differences in values and understanding, it is agreed upon that firms implementing CSR must meet the economic, legal and ethical expectations that any society has of the firm at a given point in time (Saeidi et al., 2015, p. 342). In simple terms, corporate social responsibility refers to the efforts of a firm to conform to business practices that result in a long-term economic, societal, and environmental well-being (Du, Bhattacharya & Sen, 2011, p. 1528). It emphasizes on the notion of ‘doing well by doing good’ by stressing upon the idea that profit is only a byproduct of business and not the end goal and that the purpose of business organizations go beyond …show more content…

1528). Firms can integrate CSR into the business operations in three ways: they can ‘do good’ by undertaking a project devoted to a philanthropic cause, they can ‘avoid bad’ by averting from acts that cause harm to any section of a community, in turn, retaining their company reputation or they can ‘be successful’ by using CSR to their competitive advantage and as opportunities to create a shared value (Martinuzzi & Krumay, 2013). ‘Doing good’ is one of the most common ways in which business operations implement …show more content…

According to this notion, corporate social responsibility leads to a better firm financial performance. While this direct relationship between corporate social responsibility and the firm financial performance has been examined repeatedly with results pointing to a positive relationship, this direct test is vague and invalid (Saeidi et al., 2015, p. 341). According to a study by Saeidi et al. (2015), competitive advantage, corporate reputation and customer satisfaction are the three mediators in the relationship between CSR and firm performance. Customer satisfaction leads to customer loyalty, causing customers to buy the products offered by the firm more frequently and consistently high customer satisfaction over a long period of time strengthens the corporate reputation and leads to higher sales growth and higher returns on assets, working wonders for the financial status of the firm (Saeidi et al.,

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