The case of Company X is a good example of private enterprise that has yet to put social development at the core of its business. Before measures are laid out as to how they could improve its corporate social responsibility (CSR), it is imperative to discuss the basics of CSR. CSR is defined as the responsibility of a business towards society (Bateman and Snell, 2002,p. 151). It used to be that businesses exist primarily to sell goods and provide services (Pride, Hughes and Kapoor, 1988, p. 41).
In succeeding years, the principle of CSR increased with some organizations becoming motivated in social development, evolving to enlightened self-interest. Enterprises were driven more by the need to enhance competitive advantage. Recognizing that products have achieved quality and price parity, companies saw the need to shore up their reputation capital. In essence, CSR became the competitive advantage. The shift it motivation for social development resulted in CSR becoming mainstream business practice.
In recent years, companies measure organizational performance not only with financial aspect but included social and environmental criteria as well. CSR has made a big leap at the heart of businesses (Porter and Kramer, 2006, p. 1). Company Q clearly does not prioritize CSR. While closing some stores due to money lost is a practical move, they were not able to recognize the importance of maintaining customer relationships. True, they granted a persistent customers’ request to sell organic and health-conscious food but they sold it in limited amounts only.
Based on the case, it stated that this request has been made for years, meaning there was a clamor for this. Company X was not able to see that. Declining to donate day-old food items to the food bank simply because they were worried of possible revenue loss and issues of stealing and gossip indicates that Company X gives priority to how much money they are making rather than how they could use the opportunity to contribute resources to the society in aim of improving the quality of life. The purpose of a business is not only to pursue profits.
Since businesses are part of the society, they cannot ignore social issues. In taking their part in tackling social issues, businesses can create and maintain a stable environment that has long-term profitability (Pride, Hughes and Kapoor, 1988, p. 42). There are three areas that Company X could start with in implementing CSR- customers, employees and community. With regards to the customers, Company X could involve their customers in the product development process. They could provide feedback. The company has had experience in this area when they finally gave in to the customers’ request for organic and health food.
Constant communication and interaction with customers is one way. Going an extra step may include putting health and environmental information on their products and services; getting feedback from customers on why they like going to the store and what aspect they feel need improvement (putting up a feedback box), things like that. Company X should remember that word of mouth advertising is a good and simple way to gain customers’ attention. If more customers like the store, there is a high probability that they would recommend it to their friends and colleagues.
Customers should feel that the store is a safe place to stay so ample security should be provided. It is stated in the case that the chain closed some stores in high crime areas. When it comes to their employees, it is rather safe to assume that Company X does not trust their employees judging by the fact that they were afraid to donate because some employees may steal and
Company X could start implementing employee programs that would benefit them individually and organizationally. It is a fact that employees who enjoy their work and have a good working relationship with their employers are likely to contribute more to the company. Company X could start with putting work-life balance programs and those that facilitate employee participation in decision making. An open channel of communication between employees and managers is vital. After all, in a store, it is the employee that has the most contact with the customers.
If Company X deems that donating day-old food results in revenue loss, they could still support the community in other means such as hiring of locals and purchasing products locally. This way, they could augment the income of the community. Additionally, they could espouse employee volunteerism in community development programs. They could also align social development into their business practice. Under this approach, they could identify their needs and determine how communities could be helped. It may not be donating food or money after all.
Direct consultation with the community could make a significant change not only for the community but Company X as well. After all, they are situated in the community; they might as well integrate them. Businesses should discharge its CSR in a way that befits its competence. The benefit cuts both ways: businesses add to their income and their communities gain skills, livelihood and assets. CSR should be central and strategic to the business. CSR in an obligation seamlessly integrated into the core business. Everyone needs to step up to alleviate social problems and make the world a better place for the future generation.