“Corporate Social Responsibilities (CSR) affects company’s economic effectiveness: A Case Study of Body Shop in Cosmetic Sector”.
The concept of corporate social responsibility can be defined as the process which is used to evaluate the impact of the firm’s actions and programmes on the society and the environment. In the present competitive era, development of corporate social responsibilities practices has been one of the imperative strategies of the business firms because it enhances the economic performances of the firm and facilitates to create competitive advantages (Trebeck, 2008).
This research study will provide a critical evaluation of the concepts of corporate social responsibilities and its impact on the economic performance of the company by using a case study example of cosmetic industry. In order to explore the concept of corporate social responsibilities, different authors have organised several studies on different issues such as advantages and benefits of CSR, impact of CSR on organisational performances, CSR and international affairs, driving excellence through CSR, etc. (Hidayati, 2011; Sheikh and Zee, 2011; Skudiene and Auruskeviciene, 2012).
However, the focus of the authors to research the impact of CSR in the cosmetic industry is little. Thus, this study will emphasise the relationship between the CSR and economic performance of the business firm in the cosmetic industry. The research will be quite significant for the business firms in current environment to increase their performance in terms of economic development as well as creating competitive advantage as the result will help the companies to make a better coordination with the stakeholders.
In the last decade, the fast pace of globalisation of world market increased the pressure on the business firms to enhance their abilities to survive in the competitive industries by using the available resources in optimum manner. Thus, the proposed research study will fulfil the gap between the old studies, which focussed on the analysis of CSR and its importance to improve organisational performances and help the readers to understand that how CSR activities of the business firm will contribute in economic performances of the company as well as countries in terms of increasing revenue and profit as well as protecting the natural resources.
Key Drivers of and Determinants Direct Cosmetic Firms to Implement Corporate Social Responsibilities:
According to Meehan, Meehan and Richards (2006), the essence of CSR practices in a business firm is directly related to the development of a sustainable business to survive in the competitive world. Sustainable development of the business depends on the healthy economies, profitable market and a health community. Galbreath (2010) asserted in their study that several key drivers and determinants that support execution of CSR practices in a firm included enlightened self interest and social investment. It is also supported by Tseng, et al. (2010) that social capital and market popularity as an environmentally and socially responsible firm can be gain through CSR practices.
Companies focus to create transparency and trust to attract and retain more number of customers and it is also useful to strengthen the market value and brand image of the company. At the same time, Mallin (2009) exhibited that massive environmental problems related to plastic bottling and packaging, plastic and chemical pollution, etc. directs the cosmetics firms to execute CSR programmes. In addition, as per Dayan and Kromidas (2011) health and safety issue related to the skin at the time of using cosmetic product and cosmetic tests on animals, etc. motivate the companies to execute CSR activities. Educational development and community contribution are also increased, which influences the firm to adopt several CSR activities to promote a social responsible image (Ellis and Lynch, 2010).