Social Corporate Responsibility Harvard Case Solution & Analysis

Impact of CSR on Company’s Brands and Goodwill

Corporate Social Responsibility could be described as business efforts that help in achieving a sustainable outcome by performing good business practices. In the modern world, companies not just compete on price, quality, and competitive advantage, but they also succeed and compete on the basis of good business practices and standards in order to make consumers satisfied. Due to the increase of social awareness and the awareness of human rights amongst consumers have allowed the bad practices of companies to evade. Since the financial crisis of 2007, it has become a need for companies to invest on any social idea and on the community service to generate revenues and as well as to become a company that is socially acceptable. In 21st century, the products of companies are based on customer centric approach where it aims to satisfy the needs and wants of the consumers. This particular movement reflects that the company is dependent on consumers. Therefore, any good business practices they perform impacts the goodwill of the company as it entices consumers to purchase the particular product and creates value of its brands in the eyes of a consumer(Gonzalez-Perez & Leonard, 2013).

The reflection of the business practices applied by companies can impact on its purchase of its products by thecustomers because the competition has increased and none of the companies would want to disappoint their customersby justifying poor business practices. Many brands have failed to achieve their core target in their respective countries when those companies were found guilty of using children as labors or discriminating between employees. CSR activities have a strong impact on the image of the brand. CSR activities allow companies to become socially responsible and it builds the element of trust amongst customers and the company. The trust and the social acceptance increases a positive word of mouth and a positive viral marketing which have a positive impact on a brand which increases its sales and revenues. Bad business practices restraints a consumer purchasing the desired product because ultimately the consumer perception is built that the particular revenues would be spent on the wrong cause. However, in CSR consumers are savvy and knows about the good business practices and therefore tend to buy more of that company’s brands in helping the cause towards becoming socially responsible(Gonzalez-Perez & Leonard, 2013).

Overall,it could be concluded that CSR activities can help build consumers perception in either purchasing the brand due to positive approach towards societies, or through negative approach. Directly or indirectly, it affects the earnings and revenues of a company’s brands due to increased consumer awareness of CSR activities performed by the businesses. Companies who are avoiding the CSR activities and are indulged in bad practices, would eventually see the downfall of their brands and as well as the reputation of their companies. Customer perceptions are now the focal points of the companies and they have to satisfy their consumers and make financial returns at the same time using the CSR activities(Gonzalez-Perez & Leonard, 2013) ..................................

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