Is Csr Beneficial to a Company's Performance?

Assessment 1 Academic Paper: Is Corporate Social Responsibility (CSR) beneficial to a company’s performance? What stance should companies therefore take towards CSR initiatives? Illustrate your answer with reference to companies within a particular industry.

Corporate social responsibility (CSR) has often been employed by companies in many industries with the intent to portray themselves as ethical members of the community. Yet, so-called “sin” industries have often found themselves in conflicting situations in their efforts to boost product sales and implement CSR policies, and none so more than the alcohol industry. The strong correlation between the products of the industry and health risks, as well as criminal behaviour, such as sexual assault and drunk driving has led to the alcohol industry named as a “sinful” business sector (Lindgreen, Maon, Reast & Yani-De-Soriano, 2011). With its inability to exhibit a traditional stance of CSR, companies in the alcohol industry have instead shifted its focus to minimizing the possible harm caused by their products, employing CSR strategies such as promoting responsible drinking and preventing underage drinking as well as self regulation in selling and advertisement. These strategies come at a relatively high cost however, with giants in the industry spending millions on such industry-related CSR initiatives. This essay will argue that CSR benefits companies in the alcohol industry by providing evidence of a positive correlation between CSR and company performance of selected giants in the industry, whilst also exploring the limitations of implementing such CSR measures.

The promotion of responsible drinking and self-regulation policies are two of the most significant measures employed by the industry to achieve harm minimization. Many companies choose to take a stance of consumption in moderation, as is reflected by beer manufacturers Heineken, who stated that beer is “part of a healthy balanced lifestyle when consumed in moderation.” (2015) By doing so, alcohol consumption is not only represented as a relatively harmless activity, but also allows manufacturers to set up alcohol abuse as the consumers’ personal issue, framing irresponsible decision making as a larger factor to alcohol-related issues (Wolburg, 2005). The user’s decision in consuming the product, therefore, becomes the primary blame for the harms correlated to alcohol use, instead of the availability of the product itself (Daugherty & O’Bryan, 1987). This stance allows companies in the alcohol industry to re-direct the tackling of social problems under the influence of alcohol from targeting the product to promoting moderate consumption, allowing companies to not only portray themselves as sincere carers of the society, but also reduces the probability of governments imposing laws limiting the sale and consumption of alcohol, which would lead to huge losses in the industry. Similarly, self-regulation policies also aim to avoid government intervention on products. By volunteering to regulate themselves, companies in the alcohol industry show that they understand the market better, preventing the unwanted result of overregulation, and gives them an excuse against legal measures imposed on them. Both forms of CSR activities go hand in hand in reducing the risk that the companies may face against limitations on the sale and marketing of the product.