Small Company Corporative Social Responsible Analysis

Abstract

With the concept of the Corporate social responsibility appearing, the traditional corporate philosophy is suffered from a serious challenge, which means the shareholders’ value is not the one and only goal for the company. Nowadays，more and more companies are willing to assuming the social responsibility. Although undertaking the CSR program needs companies to be strong enough and willing to pay without any return, which also means that in some degree companies lose own profits because of public welfare investment, they earn public reputation and improve the resource potentially. In the modern society, CSR is not special to big company, in spite of small and medium size business is not as strong and flexible as them, there is an increasing trend for all kinds of corporates to pay attention to CSR. Companies which are under good condition are encouraged to make efforts to the CSR program. However, as a matter of fact it depends on the company’s condition in that situation. It’s necessary for corporates managers to determine by their own companies’ capability.  

Key words: corporate social responsibility, organization, shareholders, stakeholders

Introduction

Organizations have a high connection with the society, after hundreds of years developing they are gradually recognized to be needed to undertake the social responsibility, which means they need to take community and environment into account, not merely consider their profits during their development progress. It is also called the corporate social responsibility（CSR）. This article will analysis the pros and cons for company to take a CSR program and give specific recommendation of the accounting company, which is given in the case.

Pros for company to take a CSR program

1. gain reputation and establish positive corporate image

companies can’t survive without good reputation if they want to develop further. The reason is public will judge and trust with the image that a company always shows. Abdullah and Aziz(2013) point that it’s significant for companies management to take the CSR program because it shapes a positive corporate identity so that the corporate value strategy could be proved to achieve. To some degree, the more a company does for the society, the more positive image it makes. Moreover, companies can be trustful for social activities, for example, if a company is affected by negative events, it can get rid of the serious situation faster owing to the positive corporate image that they usually established. Although some companies utilize the CSR program as a marketing method, there is no doubt that CSR is beneficial to corporates winning good reputation.        

2.win long-term profits and resources

the goal for business is to earn profits. Organizations can’t survive without profits because they need money to manage and develop. It’s very common for company to consider whether it’s worthy to invest money to a program without direct financial return.  However, CSR brings intangible benefits. As McWilliams et al(2000) mention that CSR can help companies to build trust and economic growth. In addition, Fisman et al(2005) find that CSR can have more effect on the competitive industries. The reason is that CSR effects the business image and potentially strengthen the customer loyalty. For instance, if two companies are competitors in the market, besides the products themselves, these companies’ creditabilities can become the vital factors that influence customers’ decision. Also it can increase trust in corporative partners, which brings resource virtually.