Question

Q1: what we mean by social responsibility practices and its impact on competitive advantage of the company

Answer 1

Social Responsibility Practices and their Competitive Advantages

Social Responsibility Practices of companies, also known as Corporate Social Responsibility (CSR) is the set of activities undertaken by companies which are not related to their business and solely with the intent of social objectives. Companies are corporate citizens and owe to the society in a large way. That is also a function of the companies, apart from increasing share-holder value through making profit. Such activities generally include the following:

1. Environment protection- promoting campaigns, awareness programs
2. Philanthropy- Contributing towards charitable activities
3. Good labor practices
4. Volunteering- Encouraging employees to participate in the social activities voluntarily

CSR brings in competitive advantages also, though it is not the primary intention. Some of such advantages are-

• Creation of goodwill among all stakeholders- customers, investors etc
• Viewed by Governments with positive outlook
• Building a good image among customers. In a way, it is an indirect marketing strategy. Now-a-days, customers are more and more aware of the need for social responsibility and tend to chose companies who have good visibility in that space
• Encouraging employees to pursue their social objectives act as a morale booster