CSR and Strategy

CSR as a Reactive strategy

CSR has been traditionally a reactive strategy for reviving sagging fortunes of companies by gaining confidence of the consumers. The case of Nike and cheap labour is such an example. CSR is viewed by such companies as an additional cost. This approach limits the potential CSR has in enhancing business.

CSR as Image building exercise

While using CSR as a reactive strategy is a back-to-the-wall job, CSR today is seen by companies as an opportunity for building corporate image. Companies’ announcing their plans for various philanthropic activities draws the attention of media and public. This helps in portraying the company as an organization which cares for the society and people associate the company’s products with such goodness as well. Thus if a company can develop a systematic approach for maintaining the focus on CSR activities, this will serve the purpose of positive advertisement as well

CSR for improved operating efficiency

Some companies take care of the environment because it not only helps in operating within the environmental norms set by authorities but also reduces their costs and improves operating efficiency. Moving from the compliance mode to integration of CSR with business goals results in better environmental conditions and simultaneously improves the work environment within the organization, reduces cost and provides a strategic advantage over competitors.

CSR as Source of competitive advantage

Business need to have a clear understanding of the communities that they impact and must be concerned with how their strategy helps these communities grow qualitatively along with their business – both in the short and the long run? The challenge for industries today is to identify social issues that drive its competitiveness both now and in the future. For this to happen, managers must believe that CSR is a source of business opportunity and not a liability.

CSR has the potential to shape business strategies world over.