1. Unit 1: Literature Review
Research Question: How does corporate social responsibility benefit a company?
Purpose: To explore the benefits of practicing corporate social responsibility in a company
and how it positively impacts the wellbeing.
Since the beginning of the 21st century, companies have followed a globalization pattern
that has turned into competitiveness. In order for companies to stand out and remain
outstanding in the market, they tend to implement the practice of Corporate Social
Responsibility (CSR). This practice has also become a priority and accelerated at a fast pace
due to the fact that companies have found many benefits in it. The practice of CSR involves
many aspects, but the top priorities are assessing community issues, the environment,
promoting education and research, and employee satisfaction. In a Business Ethics
Quarterly article, Husted (2014) reports that CSR started in the late nineteenth century
when severe issues about the environment and human wellbeing were concerning
companies. As a result, CSR arose with the idea that companies should share their wealth
for the good of the people. In a historic context, Husted emphasizes that the idea of CSR
started in the United States with the argument of Andrew Carnegie that “great wealth
should be redistributed, not by giving small sums to the poor but by administering wealth
for the common good.” Ultimately, he asserts that Carnegie provided a moral basis for
corporate philanthropy by linking his concern about income distribution.
The business practice of CSR has increasingly become a marketing strategy that has led
to more business competition. An article from the Journal of Business Research suggests
that companies that operate strong CSR activities tend to drive customer’s attention to buy
products or services regardless of the price. As a result, this increases competition among
firms since customers are aware of the company’s CSR practices. As commented in the
article, CSR initiatives serve as a potential differentiator because they not only add value to
the company, but also to the products or services. Furthermore, the article suggests that
firms under intense competition are able to leverage CSR to increase the impact of their
distribution on the firm’s performance. For instance, lowering the carbon footprint of a
firm’s distribution network or engaging in fair trade are potential differentiators to lower
costs and increase profits (Kemper, Shilke, Reimann, Wang, and Brettel, 2013). In this
scenario, customers can see the company’s commitment to CSR which in turn increases
company sales.
According to Griffin and Vivari (2009), Whole Foods’ marketing and promotion of
organic foods have had a positive effect on the supermarket industry. The authors assert
that Whole Foods has been able to work with its suppliers to improve animal treatment
and quality of meat offered in their stores. They also promote local agricultures in over
2,400 independent farms to maintain the line of sustainable organic produce. As a result,
we can see that Whole Food’s high prices do not turn customers away from shopping. In
fact, customers are pleased buying organic products that come from sustainable practices.
This sustainable practice adds value to the company while exercising CSR.
While CSR is demonstrated to be an effective tool in marketing for firms in competitive
markets, the authors also suggest that it could also be a useful tool for companies in less
competitive markets. For instance, firms can initiate CSR practices such as sharing profits
with a non-profit organization or donating part of their revenues to social causes. The

2. authors assert that these can raise the firm’s reputation among customers while creating
value for both the company and products. Kemper et al. (2013) stress that “managers
should recognize that the effectiveness of investing in CSR is dependent on the competitive
surrounding.” As a matter of fact, each firm should adapt their CSR practices to their
business environment.
CSR is known for contributing to a company’s marketing strategy; however, it also
impacts employee turnover, customer satisfaction, and the firm’s reputation. In a European
Business Review article, Jeremy Galbreth (2010) explores how these are generated by
engaging in CSR practices. Employee turnover measures the degree to which employees
feel connected and committed to their work with the firm. According to Galbreth, several
executives suggest that employees are their most valuable asset and that the ability to
retain them leads to organization success. Socially responsible activities promote fairness,
which in turn generate lower employee turnover. On the other hand, if an irresponsible
behavior is demonstrated by a firm, employees may view this behavior as negative.
In a similar way, authors Griffin and Vivari (2009) also suggest that employees benefit from
CSR initiatives. They argue that treating them well with competitive pay and good benefits
is seen as a socially responsible behavior.
Creating research institutes to manage a company’s CSR is potentially an excellent idea.
Anholon, Quelhas, Leal, De Souza, and Feher (2016) point out that the Brazilian airplane
manufacturer created the Embraer Institute for Education and Research in order to
manage the firm’s CSR practices. The study suggests that this company has six pillars as
part of the CSR practices such as excellence in education, social partnership programs,
entrepreneurship programs, environmental responsibility and volunteer programs. The
institute has a portal online called “Asas Do Bem,” where employees can have access to
different volunteer opportunities. Fundamentally, this feature helps employees take part of
the company’s CSR practices while creating lower employee turnover. As described by
Galbreth (2010) and Griffin and Vivari (2009), good employee benefits contribute to better
CSR practices.
The second theory from Galbreth (2010) suggests that CSR positively correlates with
customer satisfaction. The author gives the example of Sears, where they implemented an
employee-customer-profit chain model. Essentially, the company trained their employees
on how to give better treatment to their customers. As a result, this raised customer
satisfaction and demonstrated social responsibility. Galbreth suggests that firms are not
legally required to invest in their employees, but Sears managed to engage in CSR through
this program. As the article from Kemper et al. (2013) suggests that companies can
increase their reputation by involving in social practices, author Galbreath agrees in a
similar manner. He suggests that companies can achieve a better reputation and
differentiate themselves from other by spending their resources to support social causes or
projects (2010). These activities project a socially responsible commitment to customers
and stakeholders, which increase a firm’s reputation.
Although CSR can socially benefit non-profit causes and projects, it also thrives to
positively impact the wellbeing of communities. According to Rangan, Chase, and Karim
(2015), there are three theaters of practice where CSR activities can be divided. Theater
one focuses on philanthropy, which includes donations of money or equipment to non-
profit organizations, engagement with communities’ initiatives and employee volunteering.

3. This is characterized as the “soul” of a company, expressing the social and environmental
priorities of the founders. The authors assert that companies engage in CSR because they
are an integral part of the society. For instance, the Coca-Cola Company contributes with
$88.1 million annually to a variety of environmental educational and humanitarian
organization. Another example is PNC’s “Grow Up Great” childhood education program.
This program provides critical school readiness resources to underserved communities
where PNC operates (Rangan et al. 2015). Indeed, these programs make a great social
impact on communities while exercising CSR.
Embraer is also a good example of the philanthropy described in theater one. According
to Anholon, et al. 2016, the company has built high schools in Brazil such as Juarez
Wanderley and Casimiro Montenegro to provide more benefits to the society. These
schools enable the underprivileged youth the opportunity to acquire an education. The
researchers also suggest that all necessary materials such as textbooks, meals, uniform, and
transportation are provided as well. Another part of their education program has been
providing training courses to people in need. This helps them make a professional progress
and change their lives. The company offers courses to teach people how to do a manicure,
be a caretaker, and customize jeans. As a result, these courses help individuals to achieve a
better living while sustaining their families (Anholon et al. 2016). In general, Embraer has
established solutions to many issues in the daily routine of Brazilians while changing
people’s lives and strengthening their CSR.
On the other hand, theater two focuses on improving operational effectiveness in the
workplace. The researchers assert that programs in this theater strive to deliver social or
environmental benefits to support a company’s operation across the value chain by
improving efficiency. Some of the examples mentioned include sustainability initiatives to
reduce resource use, waste, and emission that could potentially reduce costs. IT also calls
for investing in employee work conditions such as health care and education which may
enhance productivity and retention. Unlike philanthropic giving, which is evaluated by its
social and environmental return, initiatives in the second theater are predicted to improve
the corporate bottom line with social value. Bimbo, the largest bakery in Mexico, is an
excellent example of this theater. The company strives to meet social welfare needs. It
offers free educational service to help employees complete high school. Bimbo also
provides supplementary medical care and financial assistance to close gaps in the
government health coverage. As a matter of fact, we can observe that these initiatives and
benefits have improved employee’s performance while strengthening Bimbo’s reputation
(Rangan et al. 2015).
Moreover, the third theater program aims to transform the business model. Basically,
companies create new forms of business to address social or environmental challenges that
will lead to financial returns in the long run. One example can be seen in Unilever’s Project
Shakti in India. The authors describe that the company hires women in villages and
provides them with microfinance loans to sell soaps, detergents, and other products door-
to-door. This research indicates that more than 65,000 women entrepreneurs are doubling
their incomes while increasing rural access and hygiene in Indian villages. Another
example is IKEA’s People and Planet initiative to be 100% sustainable by 2020. As a
consequence, the company wants to introduce a new model to collect and recycle old
furniture (Rangan et al. 2015). Fundamentally, we can observe that firms can increase the

4. wellbeing of communities and reputation by incorporating any of these theaters in their
CSR practices.
Many American companies have been trying to join the “green” movement and promote
themselves as environmentally friendly. According to Griffin and Vivari (2009), Dell
launched a “Plant a Tree for Me” program in 2007. They partnered with the Conservation
Fund and Carbonfund.org. The program consists of donating $2-$6 to a tree-planting
program to diminish the carbon emissions of their computer purchase and its electricity
use. This practice of CSR has better positioned Dell as a socially responsible company with
the environment while presenting a new marketing strategy. Griffin and Vivari (2009) also
agree that CSR can be used as a competitive advantage to differentiate a firm and its
products from those of its rivals. For example, involving companies in programs such as
fair-trade, organic foods, energy efficient light bulbs, hybrid cars and Leadership in Energy
and Environmental Design (LEED) buildings can contribute to building a better reputation.
According to the authors, some examples of companies that have established some of these
practices are Ben & Jerry’s, Whole Foods, Interface Carpets, and Patagonia.
Multinational companies also take advantage of practicing CSR in foreign countries.
Hogan (2009) suggests that CSR is purely a matter of business sense, where efficiency
equals profit. She asserts that more companies are discovering that exercising socially and
environmentally-friendly practices within standard operating processes have great
benefits. These benefits include reduction of costs, more efficiency, minimization of waste
and local community relations. In fact, these improvements translate into a better
reputation for the company. Microsoft is also a good example of the third theater discussed
by Rangan et al. (2015). This company initiated two programs in Costa Rica in 2006:
Partners in Learning (PL) and Potencial Sin Limites. These education oriented programs
provide tools and instruction in information technology. The company provides tools such
as hardware, software, training to communities with big financial need where Microsoft
operates. In 2006, the total expected reach in Costa Rica was 3.2 million students. As the
author mentions, they provide both learning opportunities and necessary skills to people
who do not have access to Microsoft. These programs also prepare them for the future and
the technology demands of the economy. An additional component of this program is
“Computadoras para Educar,” where Microsoft instructs convicted prisoners on how to
refurbish computers. As a result, they are taught skills they can use when they are released
in the future while recycling computer hardware (Hogan 2009). As a consequence,
Microsoft is addressing the individual needs of Costa Rican citizens while creating
economic welfare in the country.
In conclusion, CSR practices certainly differ from business to business. Each company
strives to develop its own activities and programs to exercise CSR. This practice is a
commitment to become more socially responsible about the issues and challenges facing
communities where the company operates. In fact, we can notice that there are many ways
in which a company can benefit by implementing CSR. Moreover, CSR practices always tend
to educate people, enhance the wellbeing of communities, increase employee satisfaction
and exceed with environmentally friendly practices. Finally, CSR demonstrates to enhance
a company’s reputation while doing good to society.
References

5. Anholon, R., Quelhas, O., Leal, W., De Souza, J., & Feher, A. (2016, November). Assessing
corporate social responsibility concepts used by a Brazilian manufacturer of airplanes:
A case study at Embraer. Journal of Cleaner Production, 135(1), 740-759. Retrieved
September 20, 2016, from
www.sciencedirect.com.ezproxy.neu.edu/science/article/pii/S0959652616308563
Galbreth, J. (2010). How does corporate social responsibility benefit firms? Evidence from
Australia. European Business Review, 22(4), 411-431. Retrieved September 20, 2016,
from www.emeraldinsight.com/doi/full/10.1108/09555341011056186
Griffin, J., & Vivari, B. (2009). Chapter 11: United States of America: Internal Commitments
and External Pressures. In Global Practices of Corporate Social Responsibility (pp. 235-
250). New York: Springer.
Hogan, E. (2009). Chapter 14: Costa Rica. In Global Practices of Corporate Social
Responsibility (pp. 285-307). New York: Springer.
Husted, B. W. (2014, January). Corporate Social Responsibility Practice from 1800-1914:
Past Initiatives and Current Debates. Business Ethics Quarterly, 25(1), 125-141.
Kemper, J., Shilke, O., Reimann, M., Wang, X., & Brettel, M. (2013, October). Competition-
motivated corporate social responsibility. Journal of Business Research, 66(10), 1954-
1963. Retrieved September 20, 2016, from
www.sciencedirect.com.ezproxy.neu.edu/science/article/pii/S0148296313000428
Rangan, K., Chase, L., & Karim, S. (2015, February). The Truth About CSR. Harvard Business
Review. Retrieved September 20, 2016, from www.hbr.org/2015/01/the-truth-
about-csr