Profit is the lifeblood of every form of business, be it a sole proprietorship, partnership or a corporation. In its simplest form, profit is defined as “the money that is earned in trade or business after paying the costs of producing and selling goods and services” (Cambridge Dictionary 2017). Corporations strive to make and maximize profits to sustain in very competitive markets. One may think that the main goal of any corporation is making profit but that is not entirely true. Many companies nowadays have set a different goal. Pleasing their customers through continuous innovation has become their main objective, meaning that making profit is the result not the goal of their business. Companies which operate in this model end up making more profit than companies who directly focus on making profit.
Apple is a great example of a successful business which focuses less on profits and more on delivering innovative products. Apple is one of the most successful companies in the world not only because of how much profit it generates but because of customer satisfaction and loyalty with the brand. Thus, the success of corporations is no longer measured by its profit. Corporate success is strongly related to non-financial factors such as innovation, customer satisfaction, organizational purpose and the impact on the community in which the organization operates in. Moreover, many organizations are more aware of how business and society are interlinked; and hence practicing some form of corporate social responsibility (CSR). The International Organization for Standardization defines CSR as “a balanced approach for organizations to address economic, social and environmental issues in a way that aims to benefit people, communities and society.” (McAdams & Leonard, 2003). CSR considers many issues such as social development, community involvement, environmental issues and human rights.
In recent years, CSR has spread widely in the corporate world which have imposed the need for incorporating CSR activities in the core business model of corporations. This means having policies and procedures in place to integrate social, ethical, environmental and human rights into business operations and core strategy. CSR has many advantages like building trust with customers and improving the overall business performance. The best advantage in my opiniton that a corporation can obtain by implementing CSR policies is the improvement in the image of the corporation.
People often tend to buy more from companies who care about society and clean environment. Starbucks for example is concerned about the environment and they strive to incorporate CSR in their business operations. In fact, their social responsibility strategy is based on three pillars; Community, Ethical Sourcing, and the Environment (Vandeveld, 2015). The company is committed to ensuring that their coffee and products are responsibly and ethically produced and purchased. In addition, the company focuses on recycling and conserving water and energy, and hence caring about the environment. Another major advantage of CSR is that it enables companies to attract talent and retain staff. People look to work for companies that care about their wellbeing and provide good working conditions.