3. Discuss why Corporate Social Responsibility and Sustainability are important for stakeholders.
Stakeholders are a variety of people, and they are consumers, shareholders, workers, and societies with a fixed interest in a business strategy and developing plans. The primary stakeholders are usually internal stakeholders, engage in economic transactions with the business, and they depend on the company’s financial well-being — examples: shareholders, strategic clients, suppliers, creditors, and employees. The secondary stakeholders have an indirect relationship with a company, they are external stakeholders, and they are affected by the business but do not depend on its financial well-being — examples: competitors, vendors, government, media, banks, customers, environmental activists. Since stakeholders include citizens of the country, businesses are linked with the economy and these citizens are affected by the business strategy and their sustained effort and their environmental effort.
Having poor stakeholder commitment can lead to issues later on. Stakeholders can get annoyed, consumers can view the business being unresponsive and not responsible, and local societies can respond negatively if they are ignored.
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Corporate social responsibility in business has a positive impact on the business's reputation with its stakeholders. With this positive reputation, it guarantees stability and sustainability and financial benefits of the business. Dissatisfaction of secondary stakeholders in any of the markets it shows that the company runs can quickly spread onto other markets, and therefore risk the business operations in markets in which the company will be recognized as successful and socially responsible.
The effects of socially responsible activities are not aimed only for the secondary stakeholders but primary stakeholders of the business which acts as a good communication channel toward external groups of stakeholders as well.
Apart from the positive effect on profitability and economic growth, it has been shown that the concept of CSR surely changes the satisfaction, motivation, and loyalty of workers, while allowing the management to obtain the best features from every worker, which straight adds to the creation of positive business trends. Having a higher level of CSR can positively affect the commitment of workers which significantly increases the efficiency of business processes. Having a higher level of motivation, loyalty, and satisfaction affected by socially responsible business operations, enables the workers and other internal stakeholders to recognize organizational values.
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