by Christina Pomoni

Created on: November 10, 2009   Last Updated: November 17, 2009

Organizations have moral, ethical, and humanitarian responsibilities in addition to their focus on earning a fair return for their shareholders. Corporate social responsibility (CSR) focuses on economic, public and social responsibility aiming at demonstrating a responsible behavior and responsiveness to social, economic, environmental and ethical issues. As society becomes more and more demanding, organizations take the action to protect and improve the welfare of society and to respond to the increasingly intense societal demands.

Building a reputation as socially responsible has a positive impact on organizational performance. CSR is related to doing successful and effective business and delivering high-quality products and services that can sustain a high-quality environment and high-quality relations to social networks. In this context, doing business is a human process.

Today, there are organizations that adopt social responsibility policies because of numerous motives. One of them is conducting ethical business, because, unlike what many people think, business ethics still exist. Besides, there are also business motives that are really strong. For instance, being highly respected as an equal opportunity employer is a strong business motive that assists an organization to reap a competitive advantage. A firm's stakeholders perceive the organization as demonstrating responsible policies and implementing responsible strategies to solve social issues. Modern organizations believe that using business strategy as a tool for social and environmental change is an efficient way to integrate social goals into organizational objectives. Besides, some stakeholders do not just prefer that an organization is socially responsible, but insist on dealing with responsible companies.

The benefits for socially responsible organizations are various. First of all, a good reputation makes it easier for an organization to recruit and retain human capital. Employees are longer employed to the organization, reducing the costs of recruitment and retraining. This leads to better organizational performance as employees become specialized in their tasks and experienced, but they are also more motivated to offer to the organization and ultimately, more productive.

An organization's actions are noted the most by organizational members. Executives who run the organization know its strengths and weaknesses and are able to exploit opportunities and anticipate threats that derive from

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