Question

Ever since establishing itself as a food giant, Timble has strived to uphold a commitment to responsible business, human rights, and uncompromising ethical and legal standards in all aspects of its business. However, the rising cost of production in recent years has put pressure on the senior management and created disagreement over the continuation of Corporate Social Responsibility (CSR) efforts. In a move to achieve consensus the company’s future, the senior management has asked your team to prepare a report on the following:

1. Give three reasons why Timble should give up CSR in its future plans

2. Provide three examples with justification to demonstrate how CSR adds value to Timble

Answer 1

1. Give 3 reasons why Timble should give up CSR in its future plans

• Given that Timble is a food giant, it is implied that it is a for-profit organization. The ultimate objective of a company is to maximize its shareholder's wealth. Spending on CSR initiatives is depleting Timble's resources and adversely impacting the company's profitability
• The benefit of CSR to the organization, purely from profitability and revenue growth perspective is not tangible. It however leads to cash outflows on a short-term basis
• Signifcant amount of employees' time and efficiency could be directly utilized for business purposes rather than CSR initiatives, which could benefit Timble by generating more revenue, market expansion innovation and profitability

2. Examples of how CSR could add value to Timble

• Brand value and image - Giving attention to responsible business, human rights, high ethical and legal standards can create positive image of the company in the eyes of its consumers. People would be motivated to buy Timble's products if the company is serious about social responsibilities. Consumers feel that they are also indirectly contributing towards benefit of society by supporting such companies
• Employee motivation - Employees contributing their time towards CSR activities would feel motivated, thus encouraging them to contribute towards company's objectives such as customer satisfaction, innovation etc
• Compliance with regulations - Upholding high ethical and legal standards also creates positive image in the eyes of regulators. For instance, implementation of safety measures and use of healthy ingredients will help create good image in the eyes of Food Authorities. Also, laws in certain countries, mandate companies to contribute certain portion of their net profits