Corporate Responsibility of the Businessman, published in 1953. This book introduced the concept of
companies giving back as a form of investment in the future. This idea came from a generation that had
survived some of the hardest times in our world and wanted to make it a better place for generations to come.
By the turn of the millennium, companies were actively participating in a variety of corporate social
responsibility projects, from volunteerism to large corporate-matched charitable donations. Nearly every
company has some form of charitable campaign, driven by the values of the culture and the interests of
employees. Today, some 63 million Americans volunteer each year, which is worth around $175 billion in
worker hours annually (Source: Corporation for National and Community Service). On top of volunteering, U.S.
corporations give over $18 billion to charities each year through fundraisers and employee-employer
matching programs (Source: Giving USA).
How Does Corporate Responsibility Benefit a Business?
There are many ways that corporate social responsibility can benefit a business and its objectives. Aside from
being able to promote the causes that are closely connected to the values of the company, a business can
improve its reputation exponentially.
Benefits of corporate social responsibility include many direct and indirect effects. Based on research from the
Kellogg School of Management at Northwestern University, these can include:
Improved perception by investors. If a company reports corporate social responsibility spending that
exceeds the expectations of investors, this dollar amount is a sign that the company itself is in good financial
standing. This perception results in positive stock returns and increased confidence by investors.
Enhanced performance for going green. Researchers have found that when companies focus on eco-friendly
efforts, the positive impact on operational performance heading into the second year is remarkable. Those
that expand their efforts in more complex ways and in collaboration with industry standard-setting
associations (such as LEED), or other eco-friendly companies, increase their performance even more.
Contracting for success. In companies that tie their CEO’s salary to corporate social responsibility results,
also known as contracting, the impact is felt even more. The value of the company increases while the bottom
line of the business is maintained.
The benevolent halo effect. When consumers understand the commitment that an organization has to being
socially responsible, its image becomes more positive. Customers actually perceive the company and its
products in a different way because they expect a better experience.
Consistency of efforts and partnerships. Researchers also found that socially responsible organizations
were consistent with staying focused on the issues that mattered most to their employees and customers. A
higher level of consistency of efforts prompted better results.
There are some other benefits of being a socially responsible company. These may happen as a result of
internal factors, as well as how closely matched the efforts are to the culture. Alison Robins, writer for
OfficeVibe, explains that being socially responsible can help attract positive attention from outside of a
company. Some examples include:
Talent attraction. Many companies offer employees paid time off to participate in volunteer activities,
including travel to other nations. Who wouldn’t want to work for a company that cares so much about a
personal cause? Corporate social responsibility is often used as a recruitment tool to attract people who care
about giving back to their communities and making changes that impact the world.
Chapter 3 Business Ethics and Social Responsibility
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