The early 2000s was a bad time for corporations, marking the turning point for the reputation of the entire sector. The downfall of businesses began with the Enron scandal in October 2001, and the subsequent witch-hunt revealed massive corporate fraud across an impressive array of companies. Corporations were never to be seen in the same light again – their credibility in society plummeted, never to reach the heyday of the 50s and 60s. Repercussions were also severe for Enron, their investors, customers, and suppliers rapidly changed their willingness to do business with the firm once the fraud was exposed.
Just like that, corporations were all suddenly under the magnifying glass, with their every move being scrutinized mercilessly. Because of this emerging transparency, ethical implications became a chief consideration in business plans.
Going Beyond Simply Being Rule-Abiding
Today, business ethics go much further than not dumping waste into rivers. Corporate Social Responsibility (another “CSR” abbreviation) covers philanthropy, environmental sustainability, business practices that benefit society, ethical management and more. In short, anything that generally involves doing good, while not necessarily pursuing profits.
Why bother, you may ask? Well, it’s just good business. Nielson’s latest Global Survey on Corporate Social Responsibility is very telling – 43% of global respondents indicate that they spent more on products and services from companies that have put in place programs to give back to society.
In particular, respondents from the Asia-Pacific region were especially inclined towards spending on products and services from socially responsible companies – specifically, 56% from Indonesia, 66% from Thailand, and 64% from Philippines.
Interestingly, though, the same survey revealed that those who said they would be willing to spend more might not actually have done so. Of the 53% willing respondents from Bulgaria, for instance, only 31% actually had done so – a 22% gap.
To Be Socially Responsible, Or Not To Be?
The question on everyone’s mind is this – is it worth being socially responsible, then? My opinion is that yes, it is absolutely worth it, largely because business ethics are a given in today’s society. Those corporations that simply chase the bottom line of profits are frowned upon, and those that flout the unspoken code of conduct for businesses are immediately flagged by society.
Just ask Nike, whose “sweatshops” put them right at the top of the news for weeks at end – for the wrong reasons. And how about the latest allegations of worker abuse in China being filed against technology giant Apple? Because of the proverbial magnifying glass hovering over the business world, such news of unethical practices are immediately thrown into the spotlight with no mercy whatsoever.
In the same way, acts of giving back to society by businesses are held in high regard by the media. This is why organizations such as charity:water and Toms are immensely popular with the public.
In sum, corporate social responsibility makes good business sense simply because this is what the public expects of the business world – and would not settle for any less.
What CSR initiatives do you employ in your company?
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