The Cost of Benefiting From Corporate Social Responsibility Essay

The Cost of Benefiting From Corporate Social Responsibility - Essay Example Because the field is a relatively new effort by business and the effects of their actions are so far reaching, it is necessary to quantify what benefits a company derives from CSR as well as demonstrate to the public the benefit that society gains from it. The cost of CSR, sometimes met with a negative response, needs to be examined with an understanding that the benefits in some cases may be mutual and what may be good for society may also be good for business. Measuring the benefit that CSR has to a company has been complicated by the reluctance of business to embrace the concept and provide reasonable reports and audits. A forthcoming report from St. Andrews University contends that less than 4% of the world's major corporations produce CSR reports, and the results have been characterised by Rob Gray, professor from St. Andrews, as, "at best useless and at worst highly misleading" (qtd. in Edwards, 2006). There are, however, some economic indicators that can be used when comparing companies that have a strong CSR reputation to those that do not. Profits, revenues, customer loyalty, market response, worker safety, and legal liabilities can be examined for the impact they have on a business. Societal benefits that arise from worker and product safety, a clean environment, and ethical practices are readily apparent. However, more intangible benefits may not be as readily quantified, but may be reflected in better company reputation, brand l oyalty, and public perception. When measuring CSR as an overall effect on a company, there is some correlation between good company citizenship and lower profitability. Indicators that can be measured indicate an overall negative effect on top CSR companies and their annual net income growth (Laffer, Coors, & Winegarden, 2004, pg. 5). It may be misleading to infer that market leaders also have the most ambitious CSR programs, for as Laffer, Coors, and Winegarden, 2004, conclude, "It is likely, therefore, that the businesses that are inclined to engage in CSR initiatives tend to be those that are already financially successful and that can afford the added CSR overhead" (pg. 6). Short-term benefits from CSR that are realised by society may take place at the expense of a company's core mission of generating profits. However, when CSR traits are examined on an individual basis, the results may reveal benefits for both the company and society. Worker safety is a paramount consideration for a company with strong CSR traits. The demand of a safe workplace is a mainstay of worker advocates and has, in many cases, been forced upon business through increased regulation. Workers have benefited greatly from these actions as the work environment continues to improve. But has business also reaped rewards from investments in safety Or has safety had a negative effect on profit Alcoa, the world's largest aluminium producer, made a strong commitment to safety in 1987. Since then its accident rate has fallen by 90% and is 10 times better than its industry peers (Jackson & Nelson, 2004). During this same period, Alcoa has been able to outpace the industry and its nearest competitor, Alcan, in both revenue and profitability. Safety contributes to profitability through a

Direct Marketing Assignment Example | Topics and Well Written Essays - 1500 words

Direct Marketing - Assignment Example 1) Cost – As the cost of per target promotion in direct marketing tends to be substantially higher than that in case of mass marketing, marketers must send their message to a limited audience only, as sending the message to general audience at large with very few of them likely to respond positively or getting converted may increase the cost manifold and thus cause a lot of marketing dollar wastage. 2) Customer irritation – As direct marketing communication tends to be longer and more involving i.e. seek active participation of the customer, than traditional mass marketing communication, thus unnecessary and unsolicited message may lead to customer frustration, resultantly eroding brand equity. Thus in direct marketing it is important to come up with a list of the customers who would be most interested in the product offering and thus will be most likely to respond positively rather than non-responding or responding negatively by avoiding further communication. â€Å"Data Mining is the process of discovering interesting knowledge from large amounts of data stored either in databases, data warehouses, or other information repositories. Simply stated, data mining refers to extracting or "mining" knowledge from large amounts of data.† (Han and Kamber, 2006). According to Fayyad et al (1996), Data mining is an important process of discovering novel, implicit, useful and comprehensive knowledge from large amount of data. For Direct marketing it translates in to a description of likely buyers or responders and thus Data mining helps in securing better results, for a direct marketing campaign than a traditional mass marketing campaign For example - To develop marketing and service –delivery strategy, Harrah’s entertainment Inc., the gambling and hotel chain uses Data mining to target customers on individual basis for direct marketing. Using its sophisticated