Disadvantages of CSR

In the previous blog post, we discussed the concept of Corporate Social Responsibility and the various advantages of embedding CSR in the various processes of an organization, for the organization itself and also for the society as a whole. If you have not read the earlier post, you can read it here. Also, if you need online assignment help, you can visit www.makemyassignments.com.

In this blog, we will discuss the various disadvantages of embedding Corporate Social Responsibility or CSR in the operations of a business organization. While there are a number of benefits and a valid reason why corporations should contribute towards the society, there are also a number of reasons that make the process of CSR disadvantageous for the organisations embedding it, such as –

Costs

The factor of costs impacts an organization in two ways when it embeds the system of CSR into its operations. The first was in which costs is a factor is that when an organization looks for and establishes methods that are different from their usual mode of practice, in order to meet the requirements of CSR, they need to incur special costs for implementing such differed mode of operation which becomes burdensome for the organization. The second way in which costs are a disadvantageous factor is because it brings along with itself a number of expenses that a corporation is required to fulfill such as training the employees, investing in dedicated programs for the upliftment of the society as well as the safety of the environment, etc. which increases the overall costs and expenditures for the organization.

Clashing of business objectives

It is a well-established fact that the main aim of a business organization is to create profits, which is why it produces various products and services to the customers, in order to be able to gain profits. Corporate Social Responsibility requires the corporations to keep the interests of the people into consideration which can cause a conflict in the  business objectives of the corporation while making important decisions. For example, whether or not to buy a land that is beneficial for the business needs, but such buying will not be beneficial for the people living around that land.

Interests of the shareholders

We discussed above that when a corporation has to embed CSR in their operations, the costs of operations tend to increase and such costs are obviously paid by the funds of the shareholders which is why this point is often raised that the interests of the shareholders of an establishment face disadvantage when the practices of Corporate Social Responsibility are embedded in the system of the organization.

Competitive Disadvantage

The establishment of CSR in a corporation can also be disadvantageous for an organization because an organization that has established CSR would incur more costs to finish and complete their tasks and operations while those who do not embed the concept of CSR into their operations will be able to provide their products at lower costs to their customers in the market which would imply that a corporation ensuring the fulfilment of CSR would be at a disadvantageous position in the market as compared to its various competitors in the markets. Such a situation can also cause a company to face a number of losses in the market in both short and long run.

Impact upon the reputation of the Corporation

When an organization established the concept of CSR as a part of its operations in the organization, they become bound to express and share a number of shortcomings of their own products to the customers in the market. Because of such sharing of information and shortcomings of the products or processes of a corporation, the corporation becomes vulnerable to a number of negative impacts upon its own reputation in the market and hence, CSR can lead to a drop in the established reputation of a corporation in the market.

Corporate Social Responsibility is one of the most widely discussed issues in respect to business organizations and corporations in the global markets and has both benefits and disadvantages for its establishment and amalgamation within the organizational and operational setup of an organization. Hence, embedding CSR in the organization becomes a difficult choice for many companies.

CSR is also a very common topic for universities to base their assignments upon, which is sometimes difficult for students to understand or attempt. If you need online assignment help on Corporate Social Responsibility, or any other Marketing Assignment help, visit www.makemyassignments.com.