Trends in Technology
Modern entrepreneurs include supporting a cause in their business plan. Both customers and employees want to support organizations that respond generously to community needs. Find out why you don’t have to be a non-profit business to help society by learning the business benefits of social responsibility.
In short, becoming a more socially conscious business not only help make the world a better place, but it can also help your business thrive.
Read on to learn more!
What is Social Responsibility for Business?
Social responsibility for business means that firms function to accomplish their financial objectives and serve society as well. Businesses are a part of society and draw inputs from it like manpower, money, land, machines, and resources, etc. After converting the inputs to output, organizations sell goods and services to the same society.
Thus, it becomes imperative that organizations do something for society in return as well. Social responsibility is a broad concept with a different understanding and implementation for every business. Generally, businesses carry out the following social responsibility initiatives:
Environmental responsibility for business aims at reducing pollution and greenhouse emissions as well as the sustainable use of natural resources. Companies like Disney, Starbucks, and Ford Motors have great environmental initiatives.
This includes things such as funding education programs, supporting health initiatives, donating to causes, and supporting community infrastructure projects. Today, the most philanthropic companies in the world include Microsoft, Coca-Cola, and JPMorgan Chase.
Human Rights Responsibility
Human rights initiatives involve providing fair labor practices like equal pay for equal work as well as promoting a multicultural work environment. Companies like American Airlines, Pepsi, Walmart, and McDonald’s became the most LGBTQ- friendly employers.
Economic responsibility initiatives involve improving an organization’s operations while participating in sustainable practices. These practices include using a new manufacturing process to minimize wastage and reducing carbon footprint, recycling, or paperless paperwork.
Business Benefits of Social Responsibility
Most people believe that social responsibility is a mere effort to boost public relations. However, it goes beyond that. Let’s consider Starbucks. For example, the company indicates social responsibility by being responsible and doing things that are good for the earth and humans. Their initiatives include:
- Raising water awareness and providing children with access to clean water by imitating the Ethos Water Fund
- Using the U.S Green Building Council’s LEED certification program to create energy and water-efficient designs.
- Commitment to buying and serving only legally and ethically traded coffee.
Here are 8 business benefits of social responsibility:
1. Expands Potential Customer Target Market
Modern consumers don’t just consider the quality of your products or services anymore. They look at your brand’s story, culture, and features like social contribution and sustainability. These features are extremely important for businesses aiming to penetrate different cultures. McDonald’s does this perfectly.
To conquer India, the company that revolutionized the beef burger promised that there would be no beef in their products to respect their religious beliefs. To target the Middle-East, they removed all pork-based items and ingredients from their menu.
2. Incentivizes Customers to Pay More
Another business benefit of social responsibility is the extension of your exclusivity and added value. Customers are willing to pay more for goods and services from organizations that support society. This reduces risk, improves profitability, and justifies the higher price. All stakeholders and potential investors consider this an advantage of raising your business value.
3. Increases Customer Loyalty in all Markets
Existing customers now serve as business ambassadors to attract new customers. Loyal customers post great reviews and bring in many friends who repeat the cycle. More importantly, retaining an old customer is much cheaper than bringing a new one.
According to a study by Cone Communications, 87% of respondents said that they would buy products and services again from socially conscious businesses.
4. Customers consider it a Unique Selling Proposition
Most Millennials and customers these days strongly believe that businesses must be socially responsible, and make that a top criterion while evaluating your business. You might not offer the best product or service, but any social responsibility initiative could make the difference.
For example, many small businesses like Bayside Apparel and Band Shoppe started producing PPE for medical staff shortages during COVID-19.
5. Motivates Teams and Improves Productivity
Employees are part of society, so businesses that sponsor social initiatives build loyalty, pride, and motivation among team members within the company. Plus, customers recognize when your staff is happy with their job. If they enjoy interacting with the people you employ, they’re likely to return.
You might offer competitive pay, benefits, corporate training, and certification. But employees today, who grew up in an enlightened environment want to be proud of the company they’re working for. Nobody wants to work for an evil corporation.
6. Improves Employee Retention and Attracts Better Candidates
Among all business benefits of social responsibility, this is probably the one most organizations focus on. If your company is recognized as providing a socially responsible culture for employees, the best and the brightest candidates will want to join you.
7. Makes Your Business More Attractive to Investors
Investors look for businesses with real passion, integrity, and an attractive vision. They see a commitment to social responsibility as great positioning for the long-term, with great value to customers and stakeholders alike. Investors are not only looking to maximize profit, but they want to expand the market. So, benefiting one society and hurting another isn’t enough anymore.
8. Welcomes Donations
When financially powerful people see the result of your initiatives, they would like to join in. Do you remember the ALS Ice Bucket Challenge and how many celebrities took part in it? Not only did it bring in multiple donations, but it also created hype on social media, which many of those celebrities took advantage of.
We hope you found our post on the business benefits of social responsibility informative and motivating. While there’s no shame in focusing on making more money, giving back to society could take your business to the next level.
If you’d like to learn more about trending business practices worldwide, get in touch with Percento Technologies today.