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Corporate Social Responsibility (CSR) is one of the essential concepts and practices of doing business in the modern world. Taking care of stakeholders and the environment and complying with all legal regulations and laws is a necessity for companies that want to achieve success and receive public support. However, participation in corporate social responsibility practices significantly affects the companys image, performance, and profit as it impacts customer and employee loyalty.
CSR practices have different types and directions and can be applied individually or in combination. For example, a company can organize campaigns to protect the environment or animal rights, donate money to local initiatives and development needs, or organize fundraising to combat global problems. This approach attracts buyers because they feel that the money they spend on the companys products will enrich the business and benefit the community. In addition, these practices can be aimed at direct customer engagement. For example, the use of natural and recyclable materials in the manufacture of products demonstrates customer care and allows them to become part of the recycling initiative. Thus, customer confidence and loyalty to the brand grow, increasing the companys sales and profits (Osakwe and Yusuf, 2020, p. 1). Simultaneously, the lack of these practices and violation of ethical standards worsen buyers trust and force them to refuse the companys services. Consequently, CSRs significantly impact customer loyalty and purchase rates, impacting a companys performance.
Moreover, CSR practices also directly or indirectly affect company employees. For example, initiatives aimed at creating suitable work conditions and protecting the rights of employees increase their comfort and, therefore, job satisfaction. A sense of pride and involvement in the positive change of the company also increases employee trust and loyalty (Dasgupta et al., 2021). As a result, employees are more engaged and willing to benefit the company with their performance and are less likely to leave. These factors improve the quality of the companys work and employee turnover, which increases the companys performance and profit.
In conclusion, corporate social responsibility is an integral part of any company as it influences the perception and attitude of customers and employees toward the organization. Caring for stakeholders and the environment builds customer and employee loyalty and increases their willingness to benefit the company through good performance or purchases. As a result, these efforts have a positive impact on the performance and profitability of the business organization.
Reference List
Dasgupta, S.A. et al. (2021) Impact of CSR on non-financial performance and the mediating role of trust and reputation: Indian manufacturing employees perspectives, International Review on Public and Nonprofit Marketing.
Osakwe, C.N. and Yusuf, T.O. (2020) CSR: a roadmap towards customer loyalty, Total Quality Management & Business Excellence, pp. 1-16.
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