Business benefits of CSR policies and practices

By on April 21, 2012

CSR is not about doing right thing but it means behaving responsible and also deals with who do the same (Redington, 2005). CSR helps to achieve the direct business benefits. The following are the business benefits of Corporate Social Responsibility.

  1. Improvement in Financial performance: Companies that have policies like worker satisfaction, motivation that is flexible to work “best places to work” have the better financial result compare to other organization.
  2. Reduction in the operating cost: CSR tools can help reduce cost. Operational efficiencies can be obtained by reducing materials and energy. Organizations can save money by reducing materials that are hazardous to environment. This will ultimately improve operating costs of organizations.
  3. Improvement in reputation and branding: CSR tools can help company to stand itself in its market place. This improves the company’s reputation and branding. The best way in order to attract the new customers is communication and marketing. A good reputation makes the marketing process much easier.
  4. Increase in sales and loyalty of customer: CSR practices can help organizations to improve sales and increase loyalty among customers. At present customers are focusing towards availing products and services that have some social values such as “pollution-free”, “child-labor free”, etc., besides normal buying criteria such as price, quality, durability, etc. Hence, the companies those have products and services in a large and growing market have to be socially responsible.
  5. Improvement in productivity and quality: By adapting CSR practices like improving the workplaces, employees tend to stay longer and offer the best which ultimately results in improvement of overall productivity and quality of an organization.
  6. Reduction in regulatory oversight: The companies that prove to go above regulatory compliance requirements specified by governments through their socially responsible activities have a power over government entities. They enjoy privileges such as reduction tax. For instance, such organizations are offered licenses, tax benefits, subsidies, etc by both local and national governments.

At the present age, consumers are denying to accept organizations that are irresponsible and involved in unethical business practices (Thornton, 2008). Hence it is important for organizations to incorporate corporate social responsibility as the part of their business strategy in order to witness benefits in their business in the long run.


  • Grant Thornton. (2008). Corporate Social Responsibility: A Necessity Not a Choice. Bangkok: Author
  • Redington, Ian. (2005). Making CSR Happen: The contribution of people management. The Chartered Institute of Personnel and Development (CIPD). London, UK