Csr and Company Performance

Introduction

The scope of business influence on society has been increasing at an unprecedented speed. Over the last two decades, however, it has taken a step forward. Nowadays businesses are increasingly attaching more importance to ethical operations and responsible business practices, which leads to series of academic research on the connection between corporate social responsibility(CSR) and corporate performance. This essay defines this concept according to the United Nations Industrial Development Organization, as "a practice whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders" (UNIDO, 2015). In the connection with UNIDO's definition, this essay argues that CSR initiatives generally enhance overall corporate performance. The industry chosen for analysis is food and beverage industry in developed countries. This particular industry is vital to every economy and society, while faced with abounding CSR issues such as food safety, work environment and environmental sustainability (Hepker 2014; Solomon 2014). In order to illustrate the influence of CSR initiatives, their effects on key drivers of overall performance corporation, in particular its customers, employees and investors, will first be analyzed. This is followed by the limitations and the challenges of effective CSR implementation.

Customer

Brand positioning is often seen as one of the most indispensable challenge a business face, especially when competing in a highly competitive environment such as the food and beverage industry. CSR can enhance company performance by creating customer value in this regard. Studies have shown that CSR performance, including environmental efforts can improve the reputation and trust of a corporation (Hart 1995 , Russo and Fouts 1997, Porter and Kramer 2011). Reputation of a company is crucial in raising brand awareness, which contributes to a company's brand differentiation and helps a...