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“It takes 20 years to build a reputation and five minutes to ruin it” (Forbes.com).Warren Buffett perfectly summarizes the influence of corporate social responsibility (CSR) in today’s companies. In the 21st Century, many companies without corporate social responsibility are considered irresponsible and acquire bad reputations. (investopedia.com) As a result, these companies may lose their integrity and  respect of  their customers. That is why CSR is an important aspect of business, one which is slowly being incorporated into business models. It is defined as “an organization’s obligation to act in ways that serve both its own interests and the interests of society at large.”(Schermerhorn, 444) Companies must conduct business in a manner that takes the community, the environment, its stakeholders, and its customers into account.(Gillis and Spring, proquest.com) The reasons businesses should be socially responsible are: to to uphold the company’s business ethics; to stay competitive; and to retain secondary and primary stakeholders.
Business ethics are the foundation of every business and are evaluated  through the actions of the company. These ethics serve as guidelines in how an organization conducts business based on the notion of what is considered right, wrong, and equitable throughout the multiple levels and branches within an organization (usc.edu). Many companies have adopted CSR practices in order to maintain their business ethics and morals. These companies use progressive methods such as transparency and authenticity to highlight their values and maintain their image (triplepundit.com). Transparency is when a business makes information about the company public. It is a growing trend that helps to clear up any ambiguity or unclarity that exists between an organization and its consumers (triplepundit.com). On the other hand, authenticity is when a company remains true to its brand, image and sense of self (triplepundit.com). Both are equally important to help a business take full advantage of CSR, as it is becoming difficult for companies to fake their values and hide important information from the public.(triplepundit.com) Being connected and aware of social issues in society has become so intertwined in business that a company’s ethics are often tested against CSR practices. Such is the case with Nike, who has been questioned about its business practices and morals countless times.(triplepundit.com) In the late 90’s, Nike was under fire for its labor practices, which exploited the use of child labor and sweatshops.(businessinsider.com) The company faced ongoing criticism from the media, which led to a loss in profitability and reforms to their business practices. (businessinsider.com) Nike began to use transparency by releasing the complete list of its contract factories, which later led to them releasing reports on the working conditions and other important information they believe the public had the right to know.(triplepundit.com) Although Nike’s labor practices did not resolve over night, the company continued to make serious changes in its business practices, which helped to rebuild its reputation and repair its business ethics.(triplepundit.com) Nike’s case shows the positive affects CSR can have on maintaining a company’s  business ethics and the huge influence is has on keeping a competitive advantage over other rivalling companies(sustainablebrands.com).
A company’s competitive advantage is what differentiates a business from its competitors. These advantages are measured  based on customer demand, customer loyalty, branding, reliability, uniqueness, competitive pricing and share market. An emerging competitive advantage of an organization is CSR. CSR is a great tool used to show the uniqueness and reliability of a brand.(Fritz, thebalance.com) For example, TOMS, a well-known shoe company, has made large contributions to society, while staying competitive and profitable (Fritz, thebalance.com). TOMS has done so by “… promisingcustomers that for every pair of shoes they bought, another pair would go to people in need” (Fritz, thebalance.com). This marketing tactic has sustained the company for a long time and positions them as a socially-aware business, which gives back to society. (Fritz, thebalance.com) It uses a “buy one/give one” model as an advantage over its competitors (Fritz, thebalance.com). The uniqueness of the product awareness, philanthropist message, and good name attached to the TOMS brand has aided in creating loyal customers (Fritz, thebalance.com). Also, it is the driving force that led the company to branch out past only selling shoes (Fritz, thebalance.com). Much like TOMS, other companies have adopted CSR as a competitive advantage that supports the business, helps society and strengthens relationships with their stakeholders. 
Stakeholders are individuals or groups that have an interest in the success or  failure of a company (triplepundit.com). They can be directly and indirectly affected by a company’s activities (saylor.org). There are two types of stakeholders, primary and secondary. Primary stakeholders comprise of “customers, employees, suppliers, board of directors, owners and shareholders.”(sayolr.org) They benefit from a skillfully managed organization, yet can be easily harmed by the pitfalls and failures a company may face (saylor.org). Primary stakeholders can directly influence the success of a company, while secondary stakeholders tend to be indirectly affected by a company through their actions (saylor.org) Secondary stakeholders are “government agencies, regulation agencies, trade unions, labor unions, political groups, social groups, and the media.” (saylor.org) Companies have an obligation to stakeholders to stay profitable and obey the laws. These responsibilities have expanded to include CSR, as many companies are expected to have ethical responsibilities (saylor.org).  Businesses are now expected to correct social problems such as environmental and global issues (referenceforbusiness.com). For example, environmental issues, like deforestation and air pollution, are often the side effects of an organization’s presence(referenceforbusiness.com).  As a result, stakeholders have put pressure on companies to have environmentally-friendly business procedures that do not contribute to global warming to such a great extent (referenceforbusiness.com). In terms of global issues, a major one is labor practices (referenceforbusiness.com). For global companies, it is important to recognize that there are different laws and regulations in other countries (saylor.org). Often times, companies with branches in other countries are “stung by revelations that their plants around the world were “sweatshops” and/or employed very young children” (referenceforbusiness.com) This issue is commonplace and has been witnessed among major brands, such as Nike. This is why CSR is needed to recognize if labor standards of your own country or another country – with your company’s branch – should be adopted. Although, organizations need to understand that labor standards around the world are vastly different and some are considered socially unacceptable, depending on the region. Stakeholders want to do business with a company that is morally and ethically sound, which means companies should be knowledgeable on all their business activities on a global plane and need to be proactive in preventing these types of issues in the future (saylor.org).
To conclude, CSR is a necessary part of business. Companies are expected to consider the environment, its stakeholders and the community when operating a business. A socially responsible company uses CSR to uphold company’s values and ethics; to keep a competitive edge; and to facilitate effective primary and secondary stakeholder engagement.