It is no secret that the activities of several corporate entities, especially multinationals, can sometimes have adverse effects on society. Previously, businesses were solely focused on making a profit and gaining more customers. However, situations relating to sustainability have created a paradigm shift where companies care about society as much as their brand.
The difference between CSR and strategic CSR lies in the essence of their formulation. CSR refers to firms’ conventional corporate social responsibility to give back to society through philanthropic models. Strategic CSR focuses on weaving corporate social responsibility into the strategic management framework of the organization such that the enterprise stays ahead of the competition and achieves brand awareness while maintaining societal sustainability.
Believe it or not, business and society have a subtle interdependency. As a result, exploring how social responsibility integrates with the core business and strategy provides an exciting field of inquiry.
Let’s explore the difference between CSR and strategic CSR and how they affect twenty-first-century business.
What is CSR in Business?
CSR stands for Corporate Social Responsibility, and it refers to the actions taken by businesses to support causes outside their own interests.
These include supporting charities, donating money to organizations like the United Nations, and giving employees paid days off to volunteer in local communities.
Companies that practice CSR see increased employee engagement, improved public perception, and stronger profits.
There are many ways to incorporate CSR into your business model, such as sponsoring events, donating supplies, or offering discounts to charitable groups.
However, the best way to understand CSR is to look at it as a form of corporate citizenship. By taking care of the needs of others, you’re showing that you care about the world around you.
And that’s something that any business should strive to achieve.
Is There a Difference Between CSR and Strategic CSR As Socio-Economic Concepts?
Even in corporate society, the changing times and seasons have created differences between several social constructs and concepts that were once unified, like corporate social responsibility.
Today, we have a strategic corporate social responsibility, which arguably appears like a repetition of a concept. However, if you are willing to look a little deeper, there is a slight difference.
The fact that businesses do not only exist to make a profit but must be ethical, socially and environmentally responsible creates a caveat for corporate entities.
Essentially, they can weave their charitability into their organization’s operational fabric to achieve simultaneously societal sustainability and brand advantage.
It is the classic example of the proverbial killing of two birds with one stone!
Essentially, businesses of the twenty-first century, as a matter of necessity, consider the environmental and societal challenges of modern life while putting their business strategies together instead of mindlessly handing out charity to society. Hence, several establishments opt for a strategic approach to CSR.
This way, the whole picture isn’t so distorted as though these businesses are trying to atone for their “entrepreneurial sins.” As a result, by strategically practicing CSR, an establishment can effectively make a profit while making the world a better place through its strategic support of sustainable development.
The UK food and beverage company BrewDog is an excellent example of this in action; they regularly post about initiatives they’re undertaking to help others, for example filling beer cans with water and sending them to Ukraine.
The repercussions of twenty-first-century businesses on the environment with increased industrialization and the call for environmental sustainability creates an intricate reverse reaction where a direct action towards CSR can yield undesirable outcomes from society.
For instance, an oil refinery directly handing out free medical supplies to the local residents can damage the company’s public opinion as there could be propaganda that the company is trying to pay for the environmental pollution due to its industrial activities through free medical supplies.
However, such a refinery can be strategic about its corporate social responsibility by implementing strategic CSR through building a standard hospital for the community or championing an afforestation campaign for greener living.
This way, the company can earn society’s goodwill, gather more brand publicity, and make a profit without damaging its reputation by appearing to repay society for the damage. So this gives rise to conventional CSR, otherwise called corporate philanthropy, in contrast with strategic CSR.
What Is Corporate Social Responsibility (CSR), and Why Should Companies Adopt It as a Business Strategy?
CSR stands for corporate social responsibility and is an independently regulating business model responsible for the social accountability of corporate entities to themselves, stakeholders and the general public. It is a socio-economic concept geared toward regulating entrepreneurial and industrial impact on society, the economy, and the environment.
CSR is also described as corporate citizenship and ensures that companies operate in ways that encourage societal and environmental development rather than destruction. Therefore, corporate citizenship is such a broad concept with multiple interpretations depending on the industry of application.
As a result, businesses can improve their brand image and awareness with CSR strategies without being all out about advertising and marketing.
Even though it appears as though only large corporations can engage in corporate citizenship to give back to society, smaller businesses can achieve the same feat if they only would be strategic about corporate citizenship.
Essentially companies can adopt CSR as an effective brand initiative as customers will be more inclined to patronize their products and services when they can understand and relate to their brand philosophy as ethical and sustainable.
This way, companies can enhance their public relations without having to break a sweat, while simultaneously building a healthier, happier society.
What Are the Pros and Cons of Implementing CSR?
No matter how wonderful a cause is, there are always two sides.
| Merits or Advantages of CSR | Drawbacks or Limitations of CSR |
| CSR improves company value and profitability by publicizing a holistic and sustainable philosophy like renewable energy, etc., to reduce production costs. | Society sometimes perceives CSR as insincere and ordinary PR (public-relations) stunts. |
| It creates better customer relations through effective positive leadership branding. | It can breed distrust and damage a company’s and its customers’ cordial relationship. |
| It helps maintain the company’s reputation, which enhances the public relations chances of the firm. | CSR initiatives can be expensive and cost the business a fortune for which it may never realize profits. |
| It improves employee motivation by maintaining a healthy workplace culture. | Several businesses may undertake projects beyond their capacity and crash midway to execution, damaging their reputation in the process. |
| It attracts big investors and business financiers for the company. | It can promote greenwashing. |
| It attracts prospective talents and employees who want to identify with a sustainable brand or a mission somewhat greater than themselves. | It creates an inherent conflict between the company and its profit motive. |
| Small businesses may find it difficult to implement effective CSR. | |
| It can create investor and shareholder resistance. | |
| Delayed realization of the CSR benefits can cause customers and consumers to lose faith and patience with the brand. |
What Is Strategic Corporate Social Responsibility (CSR), and Why Should You Implement It?
Strategic CSR refers to a company’s incorporation of CSR initiatives into its strategic planning schemes and core operations such that the firm is managed toward long-term socio-economic sustainability as its ultimate goal.
It is a system of practically applying CSR activities toward creating and maintaining a sustainable competitive advantage while maximizing profits. Strategic CSR is not the same as a business making profits and returning to improve society through acts of charity or philanthropic initiatives.
As a result, strategic corporate social responsibility exists as a worthy socio-economic concept for its ability to encourage social and economic benefits for both the enterprise and society.
More importantly, strategic CSR is all about a firm determining what activities and resources it wants to invest toward being socially responsible. However, in doing so, the firm must ensure that its chosen activity and resource investment will guarantee its competitive advantage—That is what makes CSR strategic!
So, by including CSR in the company action plan, organizations can ensure that their quest for increasing profitability does not supersede their desire to be ethical toward their stakeholders.
Here are a few ways strategic CSR helps emerging businesses of the twenty-first century create solutions to modern problems:
- Strategic CSR is critical for establishing business, economic and societal balance.
- It helps businesses manage their stakeholder relationships, especially those with dissenting values.
- It helps businesses to identify and effectively respond to threats and opportunities.
- It allows firms to develop sustainable business practices.
- It also serves as an excellent tool for an enterprise to devise worthwhile philanthropic initiatives.
Essentially, strategic CSR is a comprehensive action plan for business executives to create, analyze and implement corporate social responsibility initiatives. Several companies employ this strategy for building and monitoring their program management schemes, including public relations management.
Also, strategic CSR generally involves specific business focus areas such as:
- Program design and management
- Business promotion and communications
- Business evaluation procedures and appraisal, etc.
Implementing a strategic CSR requires the utmost discretion as it is a fragile business concept.
The reason is that a successful CSR strategy is complex, requiring practical public impact. As a result, they can potentially damage your brand’s image when poorly executed and have debilitating effects on your business success.
However, if your CSR is strategic enough, here are some benefits your enterprise stands to gain from it.
- It helps you organize everything around your enterprise, including your internal and external business environment.
- It improves your business impact for greater innovation and employee and customer acquisition.
- It protects your brand’s reputation and public image long-term.
What Best Practices Can You Adopt for Creating an Effective Strategic CSR?
Creating effective CSR strategies is no easy feat and requires top-notch creativity to avoid creating a vicious cycle that could ruin your business long-term.
However, it is paramount first to understand what is CSR and strategic CSR, their relationship and their difference. So now that you know all about that from the previous lines of this discourse, here are the top best practices for establishing strategic CSR that yield positive results.
Connect Your Company Values to Your CSR
Incorporating your CSR into your company values creates a holistic corporate identity to which people can relate.
Brainstorm With Your Stakeholders
Your stakeholders can provide various viewpoints to enable you to create a well-rounded CSR strategy that integrates across various backgrounds and cultures.
Copy Exceptional CSR Strategies From Other Brands
The sky is too wide for two birds to collide, and there is nothing new under the sun. As a result, there are always more benefits to gain by replicating the strategies of other successful brands. However, the catch is not to replicate entirely but to add some ingenuity that helps you create a unique outcome.
Establish Solid External Relationships or Partnerships
External relationships, especially with companies with good corporate citizenship, lend credence to your establishment. The reason is that those other companies noted for corporate citizenship also have followers and customers that can rob off on yours due to the established relationship.
Be Sure To Remain Clear and Transparent About Your Business Ideals
Maintaining clarity about your business ideals, especially in your internal and external business environments and their associated factors and stakeholders, helps build consistency of philosophy. Society will be more inclined to stand by your enterprise when they perceive stability and consistency around both fronts of your business environment (internal and external).
Never Stop Learning, Being Responsive and Improving
Learning never ends, and business requires keeping up with the latest trends, events and policies to stay on top of things economically and socially, which is the idea behind CSR and strategic CSR. As a result, business executives should engage in further research on the latest discussions and philosophical analyses concerning creating sustainable businesses.
Frequently Asked Questions
What Is the Relationship Between a Strategy and Corporate Social Responsibility (CSR)?
Corporate social responsibility relates to a business strategy by implementing CSR into the firm’s operational strategy to establish socio-economic benefits while boosting company branding and public relations.
Why Is CSR Critical for Strategic Management?
CSR helps companies strengthen their brand awareness while increasing profitability and socio-economic sustainability. It also creates an active situation to unite organizational members and stakeholders for a noble cause, like forging stronger employee-employer relationships.
What Is the Explanation for Netflix’s Corporate Social Responsibility?
Netflix engenders empathy and a higher understanding of the human experience through storytelling. They are committed to bringing more untold stories across backgrounds and cultures to the limelight through quality and innovative screen time.
How Does Strategic CSR Differ From Regular CSR in Terms of Communication Tools?
Strategic CSR differs from regular CSR in terms of communication tools for CSR communication. While regular CSR may focus on basic communication channels like press releases or social media, strategic CSR involves more targeted approaches such as stakeholder engagement, sustainability reporting, and partnerships with NGOs to effectively communicate CSR initiatives.
Final Thoughts
Both CSR and strategic CSR require significant effort from the companies toward building a sustainable socio-economic ecosystem. Therefore business executives must consider the socio-economic implication of their business activities before launching any strategic plan, as no enterprise can survive without a sustainable society after all.
