To date, there is no unified worldwide definition for corporate social responsibility (CSR). But most definitions agree that CSR for businesses means the way they run their operations responsibly by safeguarding the well-being of workers and their families, ensuring economic prosperity, improving the life of the local community and protecting the environment.
Most successful businesses worldwide that conduct themselves responsibly vis-a-vis their employees and the local community are well respected and highly regarded. Businesses that manage their operations irresponsibly are disrespected by society, employees and customers.
Businesses’ ethical conduct and moral behavior can be measured in many ways. Social responsibility dictates that businesses and organizations should not operate in a vacuum, as their relationship to society and the environment in which they operate is a critical factor in their ability to operate effectively.
It has been proven that companies which contribute to society are well respected by their employees and customers, and achieve their business targets because of their loyalty. Customers are also more loyal to retailers selling local products, since they contribute effectively to the economy and the employment of citizens.
In Saudi Arabia, CSR is becoming important for all types of businesses. A survey on CSR perceptions in the Kingdom, conducted by the National Commercial Bank in cooperation with YouGov, revealed that 62% of respondents believe that CSR facilitates the development of a stronger relationship between customers and the organization.
The survey also revealed that 49% of respondents believe that companies involved in CSR exhibit good business ethics, and 41% of investors would recommend an organization to others if it were involved in CSR. Finally, 83% of respondents believe that unemployment is the main social issue that needs to be addressed, while 56% think CSR attracts new investors.
CSR is becoming vital to all type of businesses since it enhances their image, which reflects positively on their employees and customers, as well as the local community. Businesses in Saudi Arabia are excelling in CSR programs in order to gain community trust and enhance their reputation. But we need a legislative body in the Kingdom to organize different CSR programs and activities in order to avoid redundancies and overlapping.
The author Talat Zaki Hafiz is an economist and financial analyst.
Source: Arab News