Volume 3  Issue 4  2016

Journal of Corporate Responsibility

and Leadership

Contemporary Challenges
in Corporate Social Responsibility

The Benefits from CSR for

a Company and Society
doi:  http://dx.doi.org/10.12775/JCRL.2016.023

Paulina Księżak
The Faculty of Economic Sciences and Management,  
Nicolaus Copernicus University, Toruń, Poland
The Faculty of Law, Economics and Management,  
The University of Angers, France
e-mail: paulina.ksiezak@outlook.com

Abstract: Corporate social responsibility undeniably provides multiple benefits

for the company. The social and environmental actions that businesses engage
in are bound to bring advantages also to society. Nevertheless, the concepts has
also some weaknesses. Engaging in social responsibility issues should be a delib-
erate decision and companies should consider its pros and cons. The aim of this
paper is to discuss the advantages of CSR, but also to point out a few defects of
the concept. The narrative review of literature is applied in order to achieve the
aforementioned aim.

Keywords: CSR, corporate social responsibility, benefits of CSR, criticism of

CSR, company and society.

1.  Introduction

Implementing CSR entails series of advantages. Many researchers

prove that a socially responsible company pays off to both business
and society. Arnold (2010) believes that the first benefit that flows from
CSR is improved relationship between companies and communities.
Appearing as an ethical enterprise inspires society’s trust and makes the
54 Paulina Księżak

relation more open. The aim of this paper is to discuss the advantages
of CSR, but also to point out a few defects of the concept.
The paper consists of three main sections. The first one deals com-
prehensively with the benefits of CSR seen from the viewpoint of the
business. It contains arguments of strictly economic nature, like increas-
ing profits, as well as more social face of a corporation. However, the
author of this paper looks also at the gains drawn from CSR by society
in the second section. Social responsibility of a company is first and
foremost created for the good of the society. It often brings a variety
opportunities and aid that the people need. As some researchers note,
the idea of CSR is connected not only to positives. They express a cer-
tain degree of criticism towards it, as is presented in the third section
of the article.
To achieve the aim of the study, the author critically analysed
a selection of literature on the subject. The works that are mentioned
in this paper present the issue from different points of view, positive
or negative, corporate or social. However, applying narrative literature
review as the only method of data collection and analysis should be
considered as the limitation of the study.

2.  The benefits for the company

Authors in literature widely describe how companies can benefit from

CSR activities (Balcerowicz, 2015; Perry and Towers, 2013; Gupta,
2012). They heartily recommend implementing socially responsible
solutions in businesses and convince that they bring numerous positive
after-effects. Frequently they mention multitude of improvements, start-
ing with the increase in revenues to encourage both large and small
enterprises to spread the idea of CSR and put it into practice in their
daily operations. The benefits of corporate social responsibility for
businesses are pointed out below in Figure 1.
Kurucz, Colbert and Wheeler (2008) profess a key significance of
corporate social responsibility for building a brand image. Thanks to
the coordination of all stakeholders’ needs, reputation of a company
as a responsible business improves. Moreover, enterprises living up to
their CSR policy do not have to worry about social licence to operate
(Balcerowicz, 2015). Through the legitimacy companies can build
value and achieve gains. The desire of the end consumers for guilt-free
 The Benefits from CSR for a Company and Society 55

Licence to 
Building operate
a brand image

Making 
profits
Employee 
Avoiding legal  Avoiding  motivation
actions government 
regulations

Benefits of 
CSR for the  Differentiation 
Risk  from other 
mitigation company brands
Attracting 
investors

Desire to 
‘do good’ Improved 
quality

Cost 
reduction

Good relations 
Customer  with 
loyalty stakeholders

Figure 1.  The benefits of CSR for the company

Source: Own elaboration

products might lead to a fall in sales of a company accused of unethical

practice. A bad image of an entity can result even in boycotting its prod-
ucts. In addition, it is difficult to ‘greenwash’ it. After consumers decide
to boycott one company’s products, most of them never go back to
buying from it. Therefore, the best policy is to stay off the media radar
by obeying the ethical rules from the start (Perry and Towers, 2013).
56 Paulina Księżak

The approval of local communities can also be easily won by social-

ly responsible behaviour and enable enterprises to operate unperturbed
(Diviney and Lillywhite, 2007). CSR is also a means of distinguishing
a business from others. Through presenting itself as a precursor of
responsible attitude, a company can stand out of the crowd and thus
induce customers into buying its products and supporting it in other
ways (Gupta, 2012).
Furthermore, an increasing number of investors seek responsible
companies to invest in. Ethical values of a business can attract wealthy
businessmen that would like to contribute to the company’s success and
gain profits. In this way goodwill of the entity can increase significantly
after implementing CSR in company’s practice (Kurucz et al., 2008;
Mullerat, 2010; Perry and Towers 2013). As Mullerat (2010) adds,
socially responsible enterprises are often characterised by less volatile
stock value. From the perspective of the stock exchange a CSR-obeying
company is less risky and has lower chances of being publicly criti-
cised, which could lower the price of the stock.
Porter and Kramer (2006) also demonstrate belief that becoming
a socially responsible company does not only involve costs and char-
ities, which confine managers, but it also brings benefits to them and
to society. Among those perks, Porter and Kramer (2006) recite tech-
nological innovations, numerous opportunities emerging and, probably
the most important in this case, competitive advantage. Gołaszews-
ka-Kaczan (2009) describes the determinants of gaining advantage
against competitors within CSR elements:
•  creating a positive image of a company – the business can influ-
ence the customers and other members of communities by maintaining
a responsible representation;
•  shaping proper relations with all of the stakeholders – a compa-
ny shows that stakeholders’ needs are important to it, for example by
increasing transparency in relation to contracts, but also to environmen-
tal actions and to respecting human rights;
•  increasing employees’ morale – CSR inspires employee loyalty
and motivates to more efficient work;
•  taking social responsibility of a company into consideration by
potential consumers – modern customers are more careful during shop-
ping. Having a choice, most of the buyers tend to choose brands known
for their social responsibility, even if they have to pay higher price for
ecologically and socially friendly products.
 The Benefits from CSR for a Company and Society 57

For companies in less developed markets, abiding by CSR rules

enables them an access to some bigger markets. Developed countries
frequently demand applying certain international standard certificates in
companies that want to trade with them (Mullerat, 2010). For instance,
respecting international sustainability rules in China opened European
and US markets for Chinese clothing (Zu, 2009). Therefore, being
a socially responsible company gives the right of entry to some biggest
markets in the world.
Implementing CSR policy and living by it forces companies to set
some standards and control over workers. Thus, the great advantage
for the enterprises might be far-reaching risk mitigation (Diviney and
Lillywhite, 2007; Perry and Towers, 2013). International CSR standards
require identifying and assessing any exposures to danger, and then urge
to extenuate and control them (Mullerat, 2010). Furthermore, reducing
the risk diminishes the uncertainty, which is immensely important.
Perry and Towers (2013) also see clear conscience of corpo-
rations as one of the advantages of CSR. They claim that the desire
to “do good” lies deeply in every human and is a driver to char-
ity actions, leaving the management and other employees with 
a feel of satisfaction. Gołaszewska-Kaczan (2009) claims that compa-
nies have ethical obligation to compensate for the impact they cause.
Perry and Towers (2013) also mention better motivation of employees
as an effect of CSR. Workers are also a part of social responsibility,
and as such, they are provoked to further activity, above all at their job.
A company that boasts of responsible behaviour attracts new talents
and retains good workers (Mullerat, 2010). Employees want to work
for a company with good reputation. The organisational commitment
of workers increases as a result of reforming labour practices and
increasing protection of human rights. Number of sick days lowers and
thanks to training programmes the rate of work errors decreases. Also,
the employees turnover decreases, which leads to savings on constant
recruitment and training for new workers. Reducing the overtime
causes less waste. Working for a longer time without break results in
a higher rejection rate. Workers are tired and make more mistakes that
could have been avoided, and in consequence they spend some of their
overtime hours on correcting the errors. This way, reducing overtime
escalates productivity.
Another benefit brought by Gupta (2012) is avoiding legal actions.
Not respecting human rights and proper working conditions standards
58 Paulina Księżak

will result in getting sued in different courts, for example European

Court of Human Rights or International Criminal Court. CSR policy
usually requires abiding by certain standards that will eliminate any
violations a priori. Social responsibility necessarily forces business-
es to obey the law, thus litigations are not likely to happen to a CSR
respecting company (Mullerat, 2010).
Multiple innovations a company needs to implement to be in check
with CSR rules may lead to better quality of products and services
(Mullerat, 2010). Through eliminating any errors at the stage of sourc-
ing, production, transport and selling of a product and thanks to closer
cooperation within the supply chain, a business’s chance to deliver the
best product for customers’ expectations is much higher.
Thanks to CSR the company can come up to a leader posi-
tion in the sector (Diviney and Lillywhite, 2007). Adapting
social responsibility is an excellent positioning strategy, since it
increases value of the brand. It may lead to enhanced influence of 
a company in the industry. Some CSR practices, like reducing waste,
influence operational efficiency, and thus make production more cost-ef-
fective and increase profits in the end (Perry and Towers 2013). Many
researchers (Porter and Kramer, 2006; Kurucz et al., 2008; Mullerat,
2010; Gupta, 2012) agree that following CSR rules will be profitable for
a company. That is the main motivation for businesses for implement-
ing sustainability. They expect that the consumers of their products will
support them in pursuing responsible behaviour by returning the favour
and buying more (Gupta 2012). Enterprises want to induce a high level
of brand loyalty and social behaviour assures it (Mullerat, 2010). More-
over, saving water and energy and reducing waste result in a significant
decrease of costs. Furthermore, some governments offer tax benefits
for companies that behave in a socially responsible way, which also
helps save money. Therefore, it can be stated that CSR policy improves
company’s financial performance.
Mullerat (2010) raises that, apart from gaining larger profits in
the long run, CSR also helps in everyday managerial decisions and
strategy development. It directs managers to establish more sustain-
able strategies that in the end create more value for the company, for
example through more reasonable allocation of resources within the
business. He also adds another benefit: developing CSR rules by the
company itself prevents regulations by governments that might have
been more restrictive. Thanks to implementing CSR policy, companies
 The Benefits from CSR for a Company and Society 59

set the norms themselves, therefore they can adjust them to their own
conditions. Mullerat (2010) argues that if no company would develop
social responsibility rules, governments would be forced to do so. State
regulations increase economic costs and limit flexibility of managers’
decisions (Gołaszewska-Kaczan, 2009). In current situation when
more and more companies present their good responsible image, pub-
lic actions seem unnecessary, which in reality means less control over
corporations.
Gołaszewska-Kaczan (2009) sums up the company’s benefits from
CSR stating that at some point business would have to take responsi-
bility for social problems, therefore it is more beneficial to do it earlier,
before the solutions become more difficult and more expensive. She
notes that social matters that have come too far can divert the manage-
ment’s focus from basic operations of the company, which is producing
goods and services.
Researchers of Sino-German CSR Project (2012) divide the benefits
companies experience as a result of devoting dedication to social and
environmental issues into four intertwining groups: internal and exter-
nal to direct and indirect. Internal direct benefits of developing CSR
activities are: learning, expanding a talent pool, increased employee
commitment and performance, while to the external direct impacts
belong: positive PR and better relationship with stakeholders. The
authors discover also some indirect perks of CSR, innovation, cost
savings, better quality and productivity being the internal ones. As
for external indirect benefits they mention among others: improved
access to capital and markets, customer satisfaction and mitigating the
risks. All lead to the outcome of competitive advantage and financial
performance.

3.  The benefits for society

Apart from bringing a wide range of benefits for a company, corporate

social responsibility is supposed to, above all, contribute to the wellbe-
ing of society. Delivering benefits to the whole of society should also
be the prominent driver for business to start and continue CSR involve-
ment (Perry and Towers, 2013). Although most researchers focus on the
advantages of social responsibility to enterprises and why they should
implement it, there are few that mention the gains of society.
60 Paulina Księżak

Corporate involvement in local community’s problems creates better

ambiance in its surroundings (Gołaszewska-Kaczan, 2009). People who
have been helped by company’s activity are happier and benefit from
a higher standard of living. Moreover, seeing that corporations care for
communities’ good makes everyone feel safer and significantly decreas-
es corruption within society. Company’s philanthropic activities gener-
ate benefits for the least advantaged, helping the needy and increasing
trust (Carrol and Buchholtz, 2008). According to Arnold (2010) CSR
also inspires fair competition.
Not only companies, but society as well benefits from better quality
of products. Corporations’ efforts to obey CSR rules make them elimi-
nate all the defects at the production stage, resulting in diminishing the
amount of complaints and increasing customer satisfaction (Mullerat,
2010). On the other hand, CSR changes in a company may lead to cost
reduction, from which customers might also benefit, if it results in price
fall (Carrol and Buchholtz, 2008). In this way more products might be
available to the people, who could not afford them before.
Moreover, responsible behaviours of companies may inspire people
in their surroundings to do the same. Thus, social activation enables
them to experience emotional benefits from being involved in help-
ing other people (Carrol and Buchholtz, 2008). It must be noted that
company’s success, which may be secured by implementing CSR, is
also a success of local communities. A richer company can hire more
employees on better conditions, providing substantial perks. As most of
the workforce in the facility is usually drawn from surrounding areas,
people from local communities are provided with better employment
opportunities.
Trainings, sometimes organised for people from outside of the com-
panies, are a great advantage for society. They raise population’s knowl-
edge and equip it in useful skills that can help local citizens in life.
CSR actions about health increase awareness in society and influence
its behaviour, convincing people to go to their medical examinations
and teaching them that preventing is always better than treating. These
activities result in healthier and better educated society (Arnold, 2010).
Protection of the natural environment and decreasing its damage is
a benefit for all. Every ‘green action’ is supposed to save the planet, and
all the living beings on it. Reducing CO2 emission and waste, dimin-
ishing use of non-renewable resources are only few ways companies
can lower their environmental impact and improve the relations with
 The Benefits from CSR for a Company and Society 61

society. For instance, lessening air pollution leaves local community in

better health (Arnold, 2010).
Thanks to the increasing number of enterprises that profess CSR val-
ues many technical amenities arose. Social responsibility of companies
led them to develop new technologies, innovations and infrastructure
that can be used by every member of society (Carrol and Buchholtz,
2008). Corporations that share their technologies contribute to the
advancement of the whole society.
Engaging in CSR values may result in developing better relations
with governments. Thanks to this cooperation both sides can discover
a better way to serve society and provide it with greater than before
economic development opportunities (Arnold, 2010). Figure 2 presents
a summary of advantages of social responsibility of businesses from the
viewpoint of the society.

Technology 
and 
Natural  infrastructure
environment 
Education
protection

Improved 
quality Economic 
development

Benefits of 
CSR for the 
society
Higher 
standard of 
living Sense of 
security

Social 
activation Increased
health
Better 
employment 
opportunities

Figure 2.  The benefits of CSR for society

Source:  Own elaboration
62 Paulina Księżak

4.  Criticism of CSR

Corporate social responsibility is widely discussed in literature. Never-

theless, not all of the opinions are favourable. There are those who warn
about the downsides of CSR. Banerjee (2007) notes that researchers
praising the benefits flowing from CSR focus on using it to find the
improvement of financial performance in a long term. He argues that in
fact, those actions are not truly ‘social’. According to him CSR serves
corporatizing social behaviour to make it brings the profit.
Some corporations can be also accused of hypocrisy. Those com-
panies profess the ideas of CSR, when in reality they indulge in series
of corporate abuses, like “environmental destruction, complicity with
repressive regimes, exploitative labour conditions, inadequate product
and process safety standards, relocation of polluting industries to regions
with weak environmental protection regimes, destruction of local live-
lihoods, violence against indigenous communities” (Banerjee, 2007, p.
168). At the same time, those companies create an illusion of compliance
with social responsibility rules. In reality they just develop their public
relations campaigns, while abusing their corporate power.
Moon (2014) points out the difficulty of measuring the actual impact
of CSR implementation. It is possible to count the hours of voluntary
work by employees or compare the rate of accidents happening in
a facility. However, those measurements cannot gauge the difference
it makes to the society and associated assessment of whether or not
it is worth paying the costs. There is no possibility of measuring to
what extend solving the issue was an effect of the company’s social
responsibility action.
Another disadvantage of corporate social responsibility was iden-
tified by Banerjee (2007). He indicates that impulse to escalate share-
holders’ value will not always lead to creation of win-win situations.
Sometimes it provokes their dispossession. Referring to Johnson
(1958), Banerjee (2007) also warns against greenwashing:

Company executives may stress that their ‘socially responsible’ phi-

losophy works to the general benefit; yet basically such a philosophy
may be a subtle device to maintain economic power in their own hands
by extending their influence and decision-making power into so many
nonbusiness areas that they become benevolent dictators (Johnson,
1958, p. 72, quoted after Banerjee, 2007, p. 6).
 The Benefits from CSR for a Company and Society 63

It is a justified concern that some companies try to buy commu-

nity’s good will with CSR, forgetting that the first matter that should
be important is society’s well-being. Some developing countries
understand CSR as merely philanthropy, and because of that distorted
image their domestic companies cannot be fully socially responsible.
Gołaszewska-Kaczan (2009) presents several arguments that can be
reasons not to get involved in corporate social responsibility in the first
place. The legal rationale against CSR is the mere legal personality of
an enterprise. It is not a human, therefore cannot be expected to adjust
its actions to moral standards. One of the social arguments is that
engaging in social programs gives too much power to corporations. It
is emphasised by the fact that managers are skilled mainly in economics
and do not have abilities required to answer to social issues. Moreover,
it is difficult for a company to deal with actions without the support of
the majority of members of the community, and there are people that are
not fond of the idea of corporations putting their noses in social issues.
Finally, Gołaszewska-Kaczan (2009) raises numerous economic
arguments opposing the benefits of corporate social responsibility. First
of them points out that as a business, the focus of a company should
be on increasing profitability for the benefit of only the shareholders
and social activities take the attention away from earnings. Allocating
the capital to CSR instead of research and development might put the
company at a disadvantage in relation to its competitors. The author
also brings up that the interests of various stakeholders might be at
conflict with each other and the enterprise will always have to chose
one’s needs over the others’.
Mullerat (2010) notes that CSR, as many other concepts, can be
twisted and used only as a PR tool. As Visser and Tolhurst (2010) say:
“it will allow companies to feel good about themselves, while com-
munities crumble, ecosystems collapse and economies descend into
chaos” (Visser and Tolhurst, 2010, p. xxvi). Nevertheless it can be also
well integrated into company’s operations in a belief that corporations
should be sincerely involved in social issues.

5.  Conclusion

Corporate social responsibility is an admirable notion that should be

followed by modern businesses. As it is, CSR is not left without the
64 Paulina Księżak

criticism. There were and will be cases of abusing CSR through talking
about it instead of living by it. Some companies proclaim their devotion
to social responsibility and still use toxic materials or treat their workers
poorly. Nevertheless the few bad examples cannot efface the positive
nature of CSR and its undeniable benefits for the society and business.
CSR is good both for companies and societies around them and
brings many benefits to both sides. The corporations can gain financial
benefits through working for the good of the people, and at the same
time, create a positive reputation and respect, securing their position on
the market. The society in which such companies function can observe
an increase of quality of education, technology and infrastructure, as
well as better health and security of people. Overall, following the rules
of CSR may lead to a higher standard of living of people surrounding
the socially responsible business. Therefore the good of the business
and the well-being of the society should not be put against one another.
As presented in this paper, they might be, and often are the same thing.

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