Question

Name a US-based or foreign company that practices Corporate Social Responsibility (CSR) and describe what it is they do.

Do you tend to do business with companies who support social causes that you as a consumer are in favor of? Or does this have any bearing on your purchasing decision at all?

Answer 1

The Corporate Social Responsibility (CSR) business model helps a company pursue activities and programs that are good for the society and community and to stay socially accountable. The other name for corporate social responsibility is corporate citizenship (involves social responsibility), which is the extent to which a company meets its ethical, legal, and economic responsibilities. When a company engages with CSR, it ensures that its operational ways are enhancing the environment and the society, and do not negatively affect them in the ordinary course of business. In most cases, larger corporations pursue CSR as their profits are high and they have grown to a point of strength where they can give back to the community and society.

The American multinational coffeehouse chain Starbucks is the world's largest coffee house chain that operates in more than 70 countries through its 30,000 locations. The company is known for its CSR practices, which often set the trends for the peers and others to follow. Starbucks obtains 90% of its coffee ethically through a network of farmers that spans globally. It has the CAFÉ (Coffee and Farmer Equity) program, which is a rating system including 249 indicators to ensure that the company obtains its coffee by partnering with farmers practicing the right ethics. Farmers who score high on the CAFE points get a higher price for their coffee sold to Starbucks when compared to others who score low. These farmers are rated along with aspects/factors/variables including social responsibility, economic accountability, environmental leadership in growing and processing coffee, and others. The company has a zero-tolerance policy towards this program now and requires that the workers are paid through cash, direct deposit, or through cheques, and are provided the established and current minimum wages. The workplaces of suppliers of coffee to Starbucks should also be free of any kind of abuse and harassment, should not employ people under the age of 14, and should be entirely non-discriminatory.

Influence of CSR Practices of a Firm on My Purchase Decisions

I along with many other people I know and acquaint like to indulge in business with companies that follow ethical practices and values which align with our own. Buyers are nowadays quite aware of the impact of their buying decisions and how they can affect the world around them. I would like to shop at a company that supports some issues that I agree with. The social programs and the CSR and ethical practices of business are even more important than the price of its offering in some cases. The extent to which I value a company may depend on the social responsibility programs and plans of the company and the extent to which I value them. For instance, if a company is pursuing a very important goal like veganism/end to cruelty to animals, anti-discriminatory practices, or carbon footprint reducing practices for the saving of environment, the prices of its offering matter less. I would prefer to spend a few dollars more but to ensure that the community and the environment remain free from the threats.

Consumers like and prefer companies that align with their values and views about the world. Also, when given a choice I will not merely buy a product for its direct benefits, but also for its indirect benefits like strengthening a company that gives back to the community or improves the environment. Therefore, purchasing decisions may not always merely be based on a need that a product or service solves. Practicing CSR gives more dimensions and strength to a company and its offerings. At other times, the purchase decision may also be an extension of the personality and beliefs of the customer.

For instance, while buying a belt or a wallet, I would prefer the product to be cruelty-free. Hence, I would go for the vegan products that do not contain animal skin. In this case, my purchase decision is influenced by the CSR policy and ethical approaches of the company. While the product may cost a bit more, I am ready to shell out more dollars because I will achieve greater satisfaction from the transaction and purchase of vegan products. It will also ensure that the heinous malpractices against the animals are curtailed. I may also look for cruelty-free tags and logos while buying any product of use. Not only consumers but other stakeholders as well, including suppliers and investors, would be interested more in dealing with companies that follow CSR practices. These firms enjoy a better reputation, may share the common CSR goals, and be a better and more sustainable partner for the long-term because of their ethical practices and approaches.