RESEARCH ESSAY (max: 1200)

Topic: Some people believe that the sole purpose of business is to maximize their profits. Other argue
that businesses are obliged to contribute to society in positive ways. Critically evaluate the notion of
corporate social responsibility. In your answer, refer to specific examples.

ESSAY

Due to the advance in the global economy, the role of the business tends to has progressed from the
traditional "profit-maximizing" approach to a "socially responsible" system (Rouf, 2011). It could be
indisputable that the influent level of corporate social responsibility (CSR) has also gradually changed.
According to Huang et al. (2014), CSR tends to be a significant component of creating organizational
value, operating sustainably, and becoming a general value worldwide. Thus, various corporations have
paid great attention to CSR and execute it to contribute to society positively. There are three reasons
why more and more firms are likely to make a positive contribution to society through CSR. Attracting
investment by the well-performed CSR activities can be seen as the first reason. The second factor is
that the better their social assistance could be, the greater the corporate image would be, which might
assist customers' interest in raising remarkably. Lastly, CSR may also improve the employees'
commitment so that there can be an increase in their organizational performance.

Investment, particularly foreign investment, plays a vital role in progressing competitive benefits and
improving efficiency (Girma et al., 2008); hence, a vast majority of corporations are concerned about
searching for potential investment and grabbing their attention. CSR is currently such a useful tool that
many businesses adopt to attract investors. According to Palmer (cited in Hussain 2019), investors highly
tend to engage in a company that shows firm commitments and responsibilities for the environment
and society. In other words, by prudently investing in CSR activities, corporations can demonstrate their
abilities to make wise decisions, which can be impressive to the investors. Saeidi (cited in Hussain 2019)
assume that the corporations' appropriate investment in CSR actions may present their judicious
intention and legitimacy, which can raise the investors' belief as well as enhance their choice to invest in
a company. On the other hand, opponents of this idea claim that owing to attaching exaggerated
importance to investors, firms may no longer apply CSR activities as seriously as they used to do once
they receive adequate investment. This argument seems to be convincing at first, yet a variety of
corporations are likely to enhance their investments in the long run. So crucial is the role of CSR in
attaining stakeholder and investors' concerns that most businesses still tend to increase the amount of
investment, even though there is an abundance of potential investors (Arya & Zhang, cited in Hussain
2019). In brief, by executing CSR actions sagaciously, the business organizations would raise their
investment significantly.

Not only can CSR positively contribute to the investment, but it also enhances the corporate image.
According to Zair and Peters (cited in Huang et al. 2014), if CSR is accomplished well, it will probably
have beneficial impacts on the corporate image. Furthermore, customers' consideration could also be
enhanced significantly by the better corporate reputation, which may increase purchase intention.
Huang et al. (2014) suppose that the business organizational role in society could affect the consumers'
recognition regarding the corporate image. For instance, due to environmental issues becoming a
socially chief concern, a majority of global hotels have accomplished plentiful green activities in their
daily operations, which ultimately bring many benefits to them (Yadav et al. 2016). In contrast, some
people may state that most companies execute CSR as a campaign to attend to their clients to raise their
sales and profitability. If consumers' attention is diverted, corporate activities related to CSR will also
modify. To a certain extent, they are right, but there is merely a reduction of the CSR actions when their
consumers' demand has changed. The decline in CSR activities that the public could not be extremely
concerned with would also demonstrate their deliberation to investors and customers. Arendt & Brettel
(cited in Hussain 2019) also assert that the appropriate CSR activities may help numerous firms achieve a
great deal of respect and appreciation from the investors and clients. In short, CSR might be a pivotal
contributor to improve and potentiate the corporate image; hence the consumers' observation would
be intensified.

Eventually, CSR may also lead to firm employees' commitment; thereby, the organizational performance
can be improved tremendously. Ali et al. (2010) convince that on account of CSR interventions including
activities associate with the employee's prosperity, CSR may uplift employee commitment to the
organization, and accordingly, corporate performance could be advantageous. The more social
responsibility activities employees may participate in, the more commitment can be created. According
to Mirvis (2012), employees who concur with their company's CSR strategy have more tendencies to be
committed and interested in their jobs than those whose weak belief in the company's efforts to social
responsibility. Also, Ali et al. (2010) point out employees' commitment should be admitted as one of the
essential success components for many business organizations. Consequently, only if the coherence
between employees and companies perform at a high level can companies enhance their efficiency. On
the contrary, those against these ideas may assert that if employees get involved in CSR actions
excessively, they will tend to effectuate these activities to benefit themselves. Even though they have a
point in thinking like that, the corporations can ensure their workers would take part in CSR activities at
an adequate level to improve responsibility perception. Corporations may meet the demand of
employees who are likely to get involved in CSR activities, but their purpose is the emphasis on CSR and
employees' commitment (Mirvis, 2012). For that reason, if there is any negative impact on their aim, the
practical actions can be executed to assure the corporate benefits. Briefly, the well-performed CSR
activities could result in strong employees' commitment that would enhance organizational
performance.

To sum up, CSR can play a crucial role in the stable growth of business organizations. Through CSR, these
corporations can increase investment intention, which may offer them more opportunities to develop.
They might also improve their corporate image significantly so that customer loyalty would be
enhanced. CSR could also contribute to the employees' commitment that gives rise to the better
corporate performance.
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