Corporate Social Responsibility: Impact, Strategy, and Stakeholder Engagement

Posted on Jun 15, 2025 in Business Administration and Management (BAM)

Understanding Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a critical aspect of modern business. It encompasses how companies manage their business processes to produce an overall positive impact on society.

Key Factors Driving CSR Importance

  • Poor business behavior towards customers.
  • Treating employees unfairly.
  • Ignoring the environmental consequences of organizational actions.
  • Significant impact on reputation.

Core Principles of CSR

  • Giving back to society what society has given to the company.
  • Minimizing negative impacts in a real and tangible way.
  • Compliance with international and national standards and recommendations in terms of CSR.
  • Respecting Human Rights.

Company Purpose: Profit vs. Societal Impact

Why do companies exist? Is it solely to earn profit, or to serve a broader purpose for shareholders and society?

Conventional View: Profit Maximization

The conventional view suggests that the primary goal is profit. However, companies are increasingly compelled to care about society. This care can, in turn, lead to improved quality and increased profit, as demonstrated by examples like Marks & Spencer and Costco.

Shareholders vs. Stakeholders: A Core Debate

The debate between shareholder and stakeholder primacy defines a company’s approach to responsibility.

Shareholder Primacy: Focus on Economic Benefit

From this perspective, the sole social responsibility of business is to increase its profits. Economic benefit is paramount, and concerns for the environment, employees, or society are secondary, as long as they do not negatively affect profits.

Stakeholder Theory: Balancing Interests

Conversely, stakeholder theory posits that a company must care not only for its owners but also for employees, customers, suppliers, society, and the environment. This approach seeks a balance between making money and doing the right thing.

Defining Corporate Social Responsibility

CSR means operating a business in a manner that meets the ethical, legal, commercial, and public expectations that society has of business. Businesses exist to serve a purpose; profit is good but not the end goal. It will come naturally when a company:

  • Makes products that transform customers’ lives for the better.
  • Preserves the environment.
  • Takes care of employees, which pays off in terms of firm value.

The Concept of Shared Value Creation

The concept of “Shared Value” represents a proactive, whole-organization approach that identifies new business opportunities by addressing societal needs.

Critiques of Traditional Business Models

Businesses are often criticized as major causes of social, environmental, and economic problems. They are perceived as trapped, outdated, failing to create value, ignoring societal needs, and caring only for short-term wealth.

Reshaping Capitalism Through Shared Value

To overcome these criticisms, capitalism can be reshaped in three key ways:

  1. Redefining productivity.
  2. Reconceiving products and markets.
  3. Investing in local market development by supporting local industry clusters.

The Interdependence of Corporations and Society

Corporations and society are intrinsically linked:

  1. Corporations need communities to create demand for their products and to foster a conducive business environment.
  2. Society needs healthy companies that pay taxes, offer high-quality products, and create jobs.

The Triple Bottom Line: People, Planet, Profit

Introduced in 1994, the Triple Bottom Line (TBL) concept is related to sustainability. In traditional business, the economic part – profit – was the sole bottom line.

Beyond Financial Profit: Full Cost Accounting

Companies now embrace “Full Cost Accounting,” where society and the environment are integrated into the cost-benefit analysis of company results. TBL companies can identify financially profitable niches that were overlooked when money alone was the driving factor. The equation is simple: People + Planet + Profit = Responsible Business. The Triple Bottom Line evaluates a company’s performance in terms of its social, environmental, and economic impact.

Company Responsibility and Stakeholder Management

TBL companies consider all actors and environments. Therefore, the first step is to list all stakeholders.

Identifying and Prioritizing Stakeholders

  1. Identification: Who they are (company names, institutions, people).
  2. Expectations: What they are looking for.
  3. Obligations: What rights they have and what obligations the company has towards them.
  4. Prioritization: Assigning importance to different stakeholders.

The Strategic Importance of Company Purpose

A company’s purpose is its fundamental reason for existing. A succinct statement should explain it, giving all employees an identity to be inspired by and advance the organization. It should be ingrained in the company’s DNA: “Why are we here and what are we meant to do?” Once a compelling purpose is found, passion can be added to make a significant mark.

Key Benefits of Corporate Social Responsibility

  • Develop, boost, and enhance relationships with stakeholders.
  • Unlock new business opportunities.
  • Increase customer retention.
  • Save money and energy on operating costs.
  • Attract, retain, and maintain a happy workforce.
  • Differentiate the company from competitors.
  • Enhance influence and reputation.
  • Provide access to investment and funding opportunities.
  • Generate positive publicity.
  • Increase contributions to society.

Corporate Contribution to Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are an urgent call made by and to all countries to achieve a better and more sustainable world by 2030. All 193 United Nations Member States agreed on these 17 goals to end poverty, ensure prosperity, and protect the planet.

How Companies Can Support SDGs

  • Pick the goals that are consistent with the organization’s mission.
  • Link the business activities with the chosen goals.
  • Improve awareness of the goals among stakeholders.
  • Prioritize employment opportunities that align with SDG principles.
  • Examine and optimize procedures and supply chains for sustainability.
  • Boost transparency in operations.
  • Invest in climate mitigation (e.g., efficient resource use, recycling).
  • Focus on long-term goals rather than short-term gains.
  • Collaborate with others; never go alone.

The Strategic Role of PR in CSR Communication

Public Relations (PR) plays a multifaceted role in CSR.

PR as a Sensor for External Issues

The PR professional acts as a sensor for external needs, potential external issues that could damage corporate reputation, and internal/external crises.

PR’s Role in Brand Awareness and Conscience

Their job description includes working for better brand awareness and reputation. The PR professional possesses a corporate conscience and can effectively match cause with company.

PR as the Company’s Chief Communicator

The PR professional is the greatest communicator of the company. They listen and speak both internally and externally, offline and online, with all stakeholders, working with transparency codes.

Monitoring and Control of CSR Promises

They have the capacity to monitor actions and control whether the company is fulfilling its promises.

Effective Channels for CSR Communication

Companies can communicate their CSR efforts through various channels:

  • Press releases
  • Annual reports / CSR reports
  • Events
  • Bulletin boards
  • Newsletters
  • Websites
  • Intranets
  • Meetings
  • Interviews
  • Commercials
  • Cause promotion campaigns
  • Product packaging
  • Billboard advertisements
  • Social networks
  • TV documentaries

Key Components of Corporate Reputation

Corporate reputation is built upon several key components:

  • Ethics: Adherence to moral principles.
  • Employees: The organization has talented employees and treats them well.
  • Financial Performance: Strong economic results.
  • Leaders: Effective and inspiring leadership.
  • Management: Competent and efficient operational management.
  • Social Responsibility: Commitment to societal well-being.
  • Customer Focus: Dedication to serving customers and clients.
  • Quality: High quality of goods and/or services produced.
  • Reliability: The company is accountable for its actions and products.
  • Emotional Appeal: When the organization is perceived as attractive and relatable.

Setting SMART Goals for CSR Initiatives

SMART is an acronym for setting effective goals:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-bound

Effective Spokesperson Communication for CSR

Spokespersons are crucial for conveying CSR messages.

Crafting Trustworthy Messages

Messages need to:

  • Convey trust.
  • Be real and transparent.
  • Be aligned with company values and strategy.

Qualities of an Effective Company Spokesperson

A company spokesperson needs to:

  • Have superb communication skills.
  • Encourage collaboration.
  • Improve the brand’s image and reputation.
  • Get to the heart of the matter.
  • Be straightforward.
  • Handle communication crises effectively.

Case Study: Stakeholders of the University of Vic

TBL companies consider all actors and environments. Here are the key stakeholders of the University of Vic:

Key Stakeholder Groups at UVic

  • Students: The core group, interested in educational quality, services, job opportunities, etc.
  • Teachers: Directly involved in education and research, interested in working conditions, resources, professional development, etc.
  • Administrative and Service Staff: Ensure the functioning of the university, interested in efficient management and their working conditions.
  • Students’ Families: Interested in the training and welfare of students.
  • Companies and Collaborating Organizations: Participate in internships, research, agreements, and employability.
  • Government and Public Administrations: Interested in the social, economic, and educational impact of the university.
  • The Local Community (Vic and region): The university generates cultural, economic, and social impact on the environment.
  • Alumni: Can influence the reputation of the university and collaborate with professional networks.
  • Media: They affect and are affected by the public image of the institution.
  • Accreditation and Evaluation Bodies: Have an interest in quality and educational standards.

UVic’s Institutional “Shareholders”

Although there are no shareholders in the classic sense, there are managing and financing entities that could act as “institutional shareholders”:

  • Fundació Universitària Balmes: This is the university’s own entity. It would be the closest equivalent to the shareholders.
  • Ayuntamiento de Vic: It is part of the board of trustees and has influence on management.
  • Generalitat de Catalunya: Provides funding and regulation.
  • Other Educational Institutions or Strategic Partners: As entities that are part of the university consortium or collaborate with UVic-UCC.