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Social Impact in Business (Corporate Social Responsibility)

“If you can shift your thinking away from merely selling and into building trust instead, even if it costs you a few bucks in profit, you’ll begin to see opportunities you never imagined once you understand what it means to ‘wow’ that customer by giving them more than they expected!”

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“If you can shift your thinking away from merely selling and into building trust instead, even if it costs you a few bucks in profit, you’ll begin to see opportunities you never imagined once you understand what it means to ‘wow’ that customer by giving them more than they expected!”

By Chris Zane.

The title of this article may sound impressive to some and very obvious to others. The former want companies to show social awareness and develop strategies to show that they do good to society. The second will say that in its nature, any business that is in operation has a social impact because it covers a need of society, gives jobs and generally participates in the economy moving.

Both points of view have their merits, and simply by creating a source of jobs that cover social needs there is already an impact on society. But being more ambitious, the ideal is that companies not only have this type of impact to meet needs and be sources of employment, but can create initiatives that help improve the living conditions of human beings.

The intention is to analyze the different ways in which entrepreneurs can have a greater impact on society by promoting the possibility of creating partnerships with communities in those that are worked on, obtaining benefits for both the entrepreneur and the community.

The first point that must be analyzed is the possibility that the product or service produced by the community can be improved in every way. That is to say, it is necessary to inculcate the awareness that the product that is offered in the society will be in conditions of competition, and for that reason they must offer to the market distinguishing characteristics of their product.

Among other important aspects that can be taken into account are the natural characteristics of the product, its degree of cleanliness in the process and the little environmental impact that its production can have.

Another aspect to analyze is the possibility of an intervention of the community in its association with the entrepreneur to be able to participate in the distribution channels, in order to be part of the margin corresponding to this stage.

The third point is the possibility of participating together with the entrepreneur in financing, so that financial costs do not reduce their profit margins.

In addition, another aspect of success is the participation of society in a transparent administration and therefore in making informed decisions. Here, the entrepreneur must offer financial and administrative training to the community.

The clarity with which the entrepreneur carries out the negotiations with the community and the involvement that demonstrates towards the needs of the same, will be fundamental factors to achieve a sustainable and beneficial business for the own community as for the entrepreneur.

Here is when it comes the Corporate Social Responsibility (CSR)

It is a way of managing companies based on the management of the impacts that their activity generates on their customers, employees, shareholders, local communities, the environment and society in general.

Principles that govern CSR

1. Compliance with legislation
2. Global and transversal
3. Ethics and coherence
4. Impact management
5. Satisfaction of expectations and needs

Why is it important?

At the beginning of the 1990s, globalization promised a future full of good omens. It was assumed that everyone would win, both developed and developing countries. It seemed that globalization would produce an unprecedented development on a world scale, but all those expectations have been diluted when great imbalances have taken place both within and between countries.

Positive points of CSR

  • Increasing the power of the company to the detriment of the States
  • The decrease in rights to attract foreign direct investment
  • The offshoring processes
  • The privatization of basic services

All this exposed context, has favored the rise of the debate on Corporate Social Responsibility (CSR), as a tool that serves to reduce the negative impact of companies in general and multinationals in particular, on social rights, labor, the environment and ultimately, about Human Rights.

Areas of CSR

CSR is a transversal concept that affects different areas of company management, so the activities developed within the framework of CSR must be:

  • Linked to the basic activity of the company
  • Have a vocation for permanence
  • Involve a commitment from senior management

There is agreement on the major thematic areas covered by CSR: economic, social and environmental. However, if something characterizes the CSR is its multidimensional character that affects different areas of the management of the company:

  • Human rights
  • Work and employment practices
  • Health protection
  • Environmental issues
  • Fight against fraud and corruption
  • Consumer interests
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