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Corporate social responsibility and your small business: why does it matter?

Are you only interested in the profits you make or are you interested in the community you serve? In today’s consumer environment, your customers are worried about how society and the environment is doing and how they can participate in improving it. They are also interested to see what businesses are doing and they don’t care how big or small you are. How can you incorporate social responsibility into your business?

First, let us take a look at the different levels of corporate social responsibility according to a research paper published in 1991. In this paper, there is a diagram called the “Pyramid of Corporate Social Responsibility”. This pyramid states that there are four responsibilities that a business needs to have to be a truly socially responsible business. They are:

Level 1: Economic responsibilities: This responsibility is to be profitable, and this is required from society.

Level 2: Legal responsibilities: This responsibility is to obey the laws and regulations of the government in which it operates. The business should also obey any laws and regulations that are specific to its industry.

Level 3: Ethical responsibilities: This responsibility refers to doing things that are just, and fair.

Level 4: Philanthropic responsibilities: This responsibility refers to being a good corporate citizen who gives back to the community in which it is supported by.

Level 1 and 2 are required from society for a business to be active. Level 3 is expected by society and in today’s world level 4 is also a requirement from society.

By having these four levels in your business you will be well on your way to creating a business that has great corporate social responsibility.

The benefits of having a corporate social responsibility program are that you will have increased profits as consumers are willing to pay more for products that they believe are supporting causes they believe in. Your employees will be more engaged and have good morale because they will believe that through their work at your business, they are actively taking part in changing society for the better. Your public image will improve, and you will have a competitive edge.

Here are some ways to you can practice corporate social responsibility in your business

  • Reduce your carbon footprint.
  • Use suppliers who are involved in fair trade.
  • Ensure your labour policies are fair and just.
  • Give to charities which your consumers support.
  • Make investments into the community which benefits it in the long run.

Now that we know what corporate social responsibility is and some ways we could implement it, let’s look at how to create a plan for corporate social responsibility. Here are some questions to ask yourself.

1. What does my customer value?

It will not serve your business well if the causes you support don’t resonate with your customer. You need to ensure that you support causes which your customer values. 

2. What are my company’s strengths?

In what way can your company help. Do you have employees who enjoying volunteering? What resources and time would you require from yourself and your employees to be successful? It is important to consider these points as they will ensure your success.

3. How can you get your employees involved?

You will struggle to dictate your requirements to your employees and there is a good chance that your efforts to improve your society will backfire. To develop a successful corporate social responsibility plan you will need to involve everyone in your business and have a brainstorming event where everyone has a chance to voice their opinion. This will ensure that you get the maximum buy-in.

4. How do you measure your success?

Now that you have your employees’ support for your initiative you need to measure its success and promote it. By keeping a record of your efforts, you can publish them on your website for current and potential customers to see.

Finally, one word of warning: don’t falsely advertise the efforts which you are doing. If you do this and get caught you will do more damage to your brand than good.

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