Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to

economic development while improving the quality of life of the workforce and their families as well as of the
local community and society at large. The foregoing implies that corporate social responsibility is about the
integration of social, environmental and economic considerations into the decision-making structures and
processes of business.. Corporate social responsibility practices have spread rapidly across both domestic and
multinational firms. Many companies are engaged in corporate social responsibility with the main intention of
making a profit out of the concept. Hence, the main essence of writing this paper is to discuss the role of
corporate social responsibility. However, the paper will begin by defining key terms such corporate social
responsibility, and thereafter, discuss the main purpose of the paper.

Corporate social responsibility on the other hand, is the process by which businesses negotiate their role in
society. However, the comprehensive approach organizations take to meet or exceed the expectations of
stakeholders beyond such measures as revenue, profit and legal obligations. It covers community investment,
human right and employee relations, environmental practice and ethical conduct (Carroll and Shabana, 2010).

According to Lockwood (2004), corporate social responsibility refers to the approach that an organization takes
in balancing its responsibilities toward different stakeholders when making legal, economic, ethical, and social
decisions. In other words, corporate social responsibility (CSR) refers to strategies corporations or firms
conduct their business in a way that is ethical, society friendly and beneficial to community in terms of
development. In addition, Corporate Social Responsibility is defined as the voluntary commitment of businesses
to include in their corporate practices economic, social, and environmental criteria and actions, which are above
and beyond legislative requirements and related to a broader range of stakeholders - everyone influenced by
their activities.

Furthermore, Davis and Blomstrom (1975) in their paper examined the corporate social responsibility as social
responsibility is the obligation of decision makers to take actions which protect and improve the welfare of
society as a whole along with their own interests. Its suggests two active aspects of social responsibility -
protecting and improving. To protect the welfare of society implies the avoidance of negative impacts on
society. To improve the welfare of society implies the creation of positive benefits for society.

Consequently, corporate social responsibility can bring significant benefits to a business. The idea that business
enterprises have some responsibilities to society beyond that of making profits for shareholders has been around
for centuries (Barry, 2000). This partly accounts for the reason why the concept of Corporate Social
Responsibility has continued to grow in importance and significance. One of the core beliefs is that business

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organizations have a social and ethical responsibility, as well as, the economic mission of creating value for
shareholders or owners of businesses. Whereas, the economic responsibilities of a business are to produce
goods and services that society needs and wants at a price that can perpetuate the continuing existence of the
business, and also satisfy its obligations to investors; ethical responsibilities are those behaviors or activities
expected of businesses by society and other stakeholders such as employees.

Thus, the roles or importance of corporate social responsibility has been on the increase, making it a must for
companies to have corporate social responsibility activities in order to sustain their business. Therefore, the
roles of corporate social responsibility used in this paper are any direct and indirect benefits received by the
community or society as results of social commitment of corporations to the overall community and social
system. The common roles of corporate social responsibility are discussed as follows:

However, one of the roles of corporate social responsibility is reduction in operation costs is another role of
corporate social responsibility. According to Fombrun et al. (2005), there are also other cases in which doing
what is good and responsible converges with doing the best for the particular business. Some corporate social
responsibility initiatives can dramatically reduce operating costs. For example, reducing packaging material or
planning the optimum route for delivery trucks not only reduces the environmental impact of a company’s
operation, but it also reduces the cost. The process of adopting the corporate social responsibility principles
motivates executives to reconsider their business practices and to seek more efficient ways of operating.

Another role of corporate social responsibility according to Turban and Greening (1996) is to attract new
customers: Companies perceived to have a strong corporate social responsibility commitment often have an
increased ability to attract and to retain employees which leads to reduced turnover, recruitment and training
costs. Employees, too, often evaluate their companies’ corporate social responsibility performance to determine
if their personal values conflict with those of the businesses at which they work. There are many known cases in
which employees were asked, under pressure of their supervisors, to overlook written or moral laws in order to
achieve higher profits. These practices create a culture of fear in the workplace and harm the employees’ trust,
loyalty and commitment to the company.

Corporate social responsibility it also balances power with responsibility. Organizations have power and this
power should be accompanied with certain social responsibility. Those who have power should use it
judiciously. As noted by Fredrick (1998), modern business corporation possesses power and influence and this
should be accompanied with responsibility. The foregoing therefore implies that organizations have power; they
have great influence and they need to balance it with responsibility. When they do this, they win the goodwill of

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the community members, but when they fail to do this, they attract the wrath of the community members. Thus,
Frederick (1998) avers that the relationship between power and responsibility has produced what has come to be
known as ‘‘iron law of responsibility’’. The iron law of responsibility as noted by Frederick (1998: 36) says that
in the long run, those who do not use power in ways that society considers responsible will tend to lose it.

Furthermore, another role of corporate social responsibility is that it discourages Government regulation. When
the government is fully aware that an organization or all organizations are alive to their responsibilities (social
responsibilities), government becomes discouraged to regulate business. Government regulations may affect the
business negatively, but when organizations know that they have a social responsibility to the community where
they operate, there may be no need for regulation. Frederick (1998: 39), cited in Asemah, et al (2013) avers that
business by its own socially possible behavior can discourage new government restrictions; it is accomplishing
a public good, as well as, its own private good.

Corporate social responsibility helps to promotes long run profit. This implies that when an organization carries
out corporate social activities, it makes more profit. Therefore, socially responsible businesses tend to have
more and secure long run profits. This is the normal result of the better community relations and improved
business image that responsible. Furthermore, Asada (2012), cited in Asemah, et al (2013) avers that proponents
of social responsibility as social obligation posit that a company engages in socially responsible behaviour when
it thinks of profits only within the constraints of law. They believe that because the society supports business by
ensuring its continuous existence, the only way business can repay society is to continue to ensure that it is
making profits. Thus, Freedman (1990) added that there is one and only one social responsibility of business –
to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of
the game, which is to say, engage in open and free competition without deception or fraud.

According to Frederick (1998: 38), corporate social responsibility helps to recognizes business moral
obligations. Organizations owe it a duty to provide amenities to environments where they operate. Thus, those
who argue in favour of corporate social responsibility note that it is the organization’s moral obligation to help
society. He further notes that this viewpoint considers a society’s moral and ethical rules to have higher priority
for corporate managers than other considerations, including business profits and other economic goals.

Besides this, corporate social responsibility improves relations with the investment community and better access
to capital. Asemah et al. (2013) stipulates that the investment community has been exploring the links between
corporate social responsibility and financial performance of businesses. There is growing evidence that
companies that embrace the essential qualities of corporate social responsibility generally outperform their

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counterparts that do not use features of corporate social responsibility. This information is being translated into
action within the investment community. An increasing number of mutual funds are now integrating corporate
social responsibility criteria into their selection processes to screen in sounder companies and/or screen out
businesses that do not meet certain environmental or social standards. Thus, a corporate social responsibility
approach by a company can improve the stature of the company in the perspective of the investment
community, a company’s stock market valuation and its capacity to access capital from that community.

Corporate social responsibility it also enhanced employee relations, productivity and innovation. According to
Fombrun (2005), a key potential benefit from corporate social responsibility initiatives involves establishing the
conditions that can contribute to increasing the commitment and motivation of employees to become more
innovative and productive. Companies that employ corporate social responsibility related perspectives and tools
tend to be businesses that provide the pre-conditions for increased loyalty and commitment from employees.
These conditions can serve to help to recruit employees, retain employees, motivate employees to develop skills
and encourage employees to pursue learning to find innovative ways to not only reduce costs, but to also spot
and take advantage of new opportunities for maximizing benefits, reduce absenteeism and may also translate
into marginally less demands for higher wages.

Lastly, corporate social responsibility promotes stronger relations within communities through stakeholder
engagement: A key feature of corporate social responsibility involves the way that a company engages, involves
and collaborates with its stakeholders, including shareholders, employees, debtholders, suppliers, customers,
communities, non-governmental organizations and governments. To the extent that stakeholder engagement and
collaboration involve maintaining an open dialogue, being prepared to form effective partnerships and
demonstrating transparency, through measuring, accounting and reporting practices, the relationship between
the business and the community in which it operates is likely to be more credible and trustworthy (Turban et al.,
1996).

This is a potentially important benefit for companies because it increases their "license to operate", enhances
their prospects to be supported over the longer term by the community and improves their capacity to be more
sustainable. Companies can use stakeholder engagement to internalize society’s needs, hopes, circumstances
into their corporate views and decision-making. While there are many questions about how far a company’s
responsibilities extend into communities relative to the roles of governments and individual citizens, there is a
strong argument that corporate social responsibility can effectively improve a company’s relations with
communities and thereby produce some key features that will improve business prospects for its future.

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Other roles of corporate social responsibility (CSR) include; increasing a business’ competitive advantage,
protect and raise brand awareness and build trust with customers and employees. Also encourages companies to
think long term changes not only in technology or the needs of the customers, but also in social, environmental
and governance issues. And helping businesses to attract more investors reduced their risks and addressed
stakeholder concerns. Corporate social responsibility can, therefore, be seen as a useful marketing tool for
attracting the most qualified employees, and also as an important component of corporate reputation (Fombrun
et al., 1990).

Accordingly, by enhancing corporate image and reputation, corporate social responsibility is an appropriate tool
for marketing the organization to prospective employees. Employees are primary stakeholders who directly
contribute to the success of the company, understanding employee reactions to corporate social responsibility
may help answer lingering questions about the potential effects of corporate social responsibility on firms as
well as illuminate some of the processes responsible for them.

To conclude, it can be seen that corporate social responsibility practices have spread rapidly across both
domestic and multinational firms. Many companies are engaged in corporate social responsibility with the main
intention of making a profit out of the concept. However, organizations that that recognize the fact that they
ought to be socially responsible to their stakeholders and go a step further to practicing corporate social
responsibility have a lot of benefits; businesses that are only profit driven display no sense of responsibility for
the proper development of society, and hence lose out on their brand recall, customers and well-wishers. No
employee or shareholder would like to be associated with a business that does not show legal, legitimate and
decent ways of making money. That is where corporate social responsibility comes in.

Companies with an active CSR also play a major role in the development of the land by donating to charities
and uplifting the lesser fortunate populace. Socially responsible organizations make profit in a way that does not
harm the social and environmental fabric of the country where they operate. Human beings are also first on their
list of concerns. Generally, socially responsible companies have very high employee satisfaction and motivation
levels; corporate social responsibility lowers the cost to companies in the long run. Organizations that exhibit
corporate social responsibility have a better reputation, which means that there is a positive image of the
company in the public’s eyes that converts into customer loyalty. More so, companies that have corporate social
responsibility will attract more and more investors, thereby increasing the business access to capital. The paper
therefore concludes that organizations that carry out corporate social responsibility activities have a lot to
benefit. Thus, the paper recommends that organizations should endeavour to pay due attention to corporate
social responsibility and this practice should be a continuous one (Barry, 2000).
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