Corporate responsibility is taken seriously by all the corporations today. Every firms tries its best to benefit the society by donations, purchasing policies that involves buying products that are involved with inhuman practices, making schools and hospitals. Some companies are adopting practices to help the environment.
Sometimes the top management may face critical situations where the profits of the companies have to be sacrificed for the sake of corporate responsibility. If they chose not to cut profits and continue their traditional practices they may face protests from activists, media and common man and eventually their products could face a mass boycott.
Hence corporate responsibility may seem like a loss in near time, it will eventually help building the reputation of the firm and help the firm in the long run.
As more people are getting educated there is a shift in the behavior of a common man. Traditionally people who use to only think about products which are inexpensive and good quality is decreasing. Nowadays people also focus on the practices companies are adopting. Take an example of Nike Shoes. Nike was growing bigger and was on the path of globalization. In providing low cost products and investing more into new designs, Nike started to take advantage of global sourcing. Nike was paying low wages, poor working conditions. As more and more people got know about the poor working conditions and low wages the image and reputation of the company started to fall. Nike's revenue was decreasing, people started to buy sporting products from other companies which were adopting some of the best practices. This is where the corporate responsibility plays an important role. The company realized it and implemented a code of conduct by dropping child labor, improving working conditions and paying more wages for labors what they deserved. This changed the image of Nike again and adopting good practices and putting more emphasis on corporate responsibility changed Nike.
ReplyDeleteTrue ! I am totally agree with you. In the present scenario, corporates give much importance to social responsibility than ever before. Look at Microsoft, they donated billions of dollars to the African poor countries. Also as we learn from the Starbucks case how important to fulfill corporate responsibility in modern era.
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