A sincere sense of Corporate Social Responsibility (CSR) can aid a business to acquire and maintain a competitive edge over rivals in today's intensely saturated and rapidly changing markets.
CSR is relative to societal expectations. Society expects organisations to optimise their positive and minimise their negative impacts upon others. In relation to Marketing, CSR concerns ethical behaviour and the effects of an organisation's marketing decisions upon the natural environment, consumerism, and community relations.
There are two opposing schools of thought in relation to CSR. On the one hand, there is the school that believes that the laws and regulations of a society prescribe fully what constitutes socially responsible behaviour. Therefore, to go beyond the formal law voluntarily is unnecessary and signifies a distraction from management's highest responsibility, that is, to increase shareholders' value. Whilst conceivably most organisations keep their marketing activities within the letter of the law, some lawful marketing activities, however, might be regarded as being against the best interests of society, such as irresponsible selling techniques, bribery, price discrimination, misleading advertising, deceptive packaging, trading in counterfeit products, and marketing defective goods.
On the other hand, there is the school that recognises that the law cannot and does not prescribe the complete set of duties and responsibilities that constitute socially responsible conduct. Therefore, in order to act socially responsibly, management needs to think beyond the formally established laws and take into account others' interests informally, as well as the organisation's.
Technological advancements, in the form of faster communication channels and global coverage, have made businesses more vulnerable to being exposed for their misdeeds. Furthermore, greater choice and reduced customer loyalty pose very real threats to businesses that alienate society. Failures of CSR have the potential to result in loss of valuable customers and to spark adverse reactions from the authorities.
Socially responsible marketing activities can contribute to, for example, a deeper understanding of customers' needs, favourable publicity, higher levels of sales, boosted staff commitment and enhanced business performance. It can yield other valuable benefits too, including reduced costs and the attainment and maintenance of a superior, differentiated marketplace position, that is, one that creates superior value for customers and investors.
If reputation is just as important for a business as is the need for it to have the best product and the most competitive prices, then CSR is a means of adding value to the business and to improve its competitive edge over rivals. Hence, it is no surprise that many businesses incorporate and implement ethical and social responsibility programmes into their corporate marketing strategies. They embrace the additional undertakings associated with CSR in order to realise the valuable benefits that can ensue.