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Corporate Social Responsibility – Series 2

By Mr.Ng Kean Kok, Dr Falahat Nejadmahani, Mr.Tuam Kwok Choon and Ms. Farah Waheeda (CSDCSR)





The following write-up represents the second of a series of articles that hopes to provide readers with facts and information regarding Corporate Social Responsibility (CSR).


This article shall touch on the benefits that will accrue to firms and businesses that practice CSR.



Benefits of CSR


Business should not have the thinking that CSR is just about doing the right thing. Indeed, it means more than that. It means behaving responsibly, and also dealing with suppliers who do the same.


There certainly are many direct business benefits that accrue to firms / businesses. For instance, CSR can help firms / businesses to build a reputation as a responsible business and this can translate to be a competitive edge against business rivals or competitors. Businesses tend to favour suppliers that demonstrate responsible policies, as this can have a positive impact on how they are perceived by their own customers.


Some customers (whether corporate or personal) do not just prefer to deal with responsible companies, but insist on it.



Broadly, the benefits that may accrue to a firm that practices CSR include the following:


Enhanced brand image and reputation: A firm that is considered or viewed by the external stakeholders to be socially responsible will definitely reap benefits owing to its enhanced reputation with the public, as well as its reputation within the business community. In turn, this will increase a firm’s ability to attract capital (see next benefit below) and trading partners (suppliers).



Easier access to capital: Increasingly, there exist more and more fund managers who attempt to invest funds into those firms that are socially responsible. These fund managers adopt certain strict criteria when determining where to put money in. They seek to identify whether firms:


  • Embrace Socially Responsible Investment strategies to manage risks;

  • Adequately and satisfactorily fulfill their fiduciary duties;

  • Practice good CSR

  • Satisfy environment, social and governance criteria and so on

If the answer to the above is in the positive, then such fund managers that are managing huge funds would definitely be attracted to invest the firms / businesses concerned. In short, firms that seriously address ethical, social, and environmental responsibilities will have easier and growing access to capital that might not otherwise have been available.



Increased sales and customer loyalty: Many studies note that there is a large and growing market for the products and services of firms / businesses that are perceived to be socially responsible. Such firms will find themselves in the limelight. An example of such reporting may be found using the following link:


It provides readers with the list of the ‘Top 10 Companies with the Best CSR Reputations. It is commonly argued that businesses must first satisfy customers’ key buying criteria – such as price, quality, appearance, taste, availability, safety and convenience. Yet, among customers, there is also the desire for them to buy based on other value-based criteria, such as ” sweatshop-free” and “child labour-free” clothing, products with smaller environmental impact, and the non-existence of genetically modified materials or ingredients.


Improved financial performance: Past studies have also found that ‘stakeholder balanced’ firms tend to experience four times the growth rate and eight times employment growth when compared to those that focused only on shareholders and profit maximisation. Readers may read a sample case study of Shell to understand how the company concerned has managed to balance the needs of its stakeholders, being shareholders, customers, employees, suppliers and society. The case study is found using the following link:

Increased ability to attract and retain employees: Firms that having strong CSR commitments and practices will find it easier to attract and recruit talented employees. Additionally, retention of staff would be higher too as staff would be more inclined to stay and work with such responsible firms, resulting in a reduction in turnover and associated recruitment and training costs. Firms will correspondingly be able to employ better human resource strategies that translate into competitive advantage against business rivals.


Reduced regulatory oversight: Firms are encouraged to demonstrate that they are engaging in practices that not only satisfy, but also go beyond the minimum regulatory compliance requirements. Such firms are seen to be responsible and become well-respected. In turn, these firms are given less scrutiny, experience fewer frequency of reviews and checks by both the regulatory authorities. When a firm is subjected to fewer inspections and paperwork, these firms may be given preference or ‘fast-track’ treatment when applying for operating permits, incentives or other forms of government support.

The above is a product of UTAR’s CSDCSR





The Centre for Sustainable Development and Corporate Social Responsibility in Business (CSDCSR) is based in the Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman.


For businesses seeking to excel in CSR, UTAR’s CSDCSR is able to provide your business and / or your firm with consultancies in the following areas:


  • Sustainable Business

  • Developing CSR policies

  • CSR implementation

  • CSR training

  • CSR workshops / seminars


Do visit our website: for more information



Leading Action Research on Entrepreneurial Sustainability

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