In this assignment, we will focus on the concept of Corporate Social Responsibility (CSR) and financial performance. Organizations must capitalize on the relationship between CSR and financial performance to remain competitive. There is a positive relationship between the growth rate of total assets and corporate soundness and social contribution. Companies can use different types of Corporate Social Responsibility to achieve better financial positions. The four types of CSR are ethical responsibility, philanthropic responsibility, environmental responsibility, and economic responsibility. However, the implementation of CSR includes several challenges. Finally, the limitations of Corporate Social Responsibility (CSR) mainly involve finance and ethical issues.
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ECONOMIC RESPONSIBILITY IN (CSR)
This section discusses the relationship between CSR and financial performance. Managers in practice could justify CSR expenses to the shareholders not only due to their moral quality but also regarding their economic benefits. The type of Corporate Social Responsibility implemented may depend on company guidelines and policy. Investors are more confident in firms that undertake CSR mainly because of ethical behavior. Some researchers argue that the limitations of Corporate Social Responsibility impact negatively on CSR and financial performance in companies. Innovation during CSR is also vital in improving the fiscal positions of organizations.
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ETHICAL ISSUES IN CORPORATE SOCIAL RESPONSIBILITY (CSR)
Ethical behavior in companies plays a crucial role in the relationship between CSR and financial performance. Customers buy from companies whose purpose aligns with their beliefs. Consumers want companies to demonstrate sustainability, transparency, and fair employment practices. The various types of Corporate Social Responsibility must have an impact on social, cultural, environmental, and political issues. Therefore, organizations must work on how to handle the limitations of Corporate Social Responsibility. This will improve trust from consumers, increase their loyalty, thus leading to steady financial growth. Companies must evaluate the products and services they offer, factoring in both profitability and ethicality.
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