When a business entity incorporates, it is doing so to raise a large amount of capital. Additionally, it is trying to find the right shareholders that will fund the company with decent contributions. In return, of course, they will use those funds to run operations and make a profit. Although such system works well for a lot of organizations, are there any benefits to the local society? More importantly, should corporations give back to the community at all?
Corporate Social Responsibility
The definition of true corporate responsibility varies. Some say that it means helping the local community and people who are not tied to the business. Others, however, think that it simply revolves around maintaining an ethical practice. Regardless of the definition, corporate responsibility can be linked to aiding others. Consequently, there is undoubtedly a reason why large businesses should always maintain a healthy relationship with the community.
Additionally, every incorporated entity should aim to help the society in a non-profit-driven way. Although revenues and margins matter, they will not build a relationship with the population. Regardless of how rich a company might be, people will seldom care unless they are directly affected. Therefore, large businesses should directly positively affect the local population.
How exactly can corporations help?
John Yanni Alphas is a business owner who runs The Alphas Produce Company. In fact, he is a perfect example of how entrepreneurs can help. Just recently, John Yanni Alphas hired three veterans to work for his company. Undoubtedly, finding veterans who can fill the positions was considerably harder than simply using a hiring agency.
Regardless, he decided to help the community by giving those specific individuals an opportunity. In reality, however, large companies can help in many different ways. Some businesses encourage all of their employees to volunteer at local events. Others make substantial monetary contributions.
Ultimately, the fact that they actually help is what matters. After all, maintaining a healthy relationship with the community requires a lot of dedication. So, when someone like John Yanni Alphas is able to meet and aid individuals personally, their efforts should be praised.
Other Aspects of Corporate Responsibility
The second definition of the term above is based on ethical practices. That means that corporate responsibility revolves around honest operations. Consider, for example, a minor scandal of a large accounting firm based in New York. In 2012, Ernst and Young was fined more than $10 million for an audit engagement that facilitated fraudulent financial reporting. Due to that scandal, many employees were unable to attend their volunteering events. Instead, they had to contribute to the damage control efforts.
Almost every unethical practice will eventually affect society. Undoubtedly, some companies’ issues are much more dangerous for the world than others. For example, if The Alphas Produce Company sold spoiled produce, hundreds would get sick. Hence why it is essential that owners like John Yanni Alphas continue doing what is best for the community.
One of the easiest ways for corporations to practice social responsibility is through contemporary issues. When Houston and Florida experienced disastrous floods in 2017, a lot of companies stepped in. Some business owners let their employees miss work for a month. Many others provided funds and help for those affected by the unfortunate events. So, the easiest way for corporations to help the society is to remain active during a crisis.
Lately, for example, a lot of issues surrounding privacy became popular. In the light of what happened with Facebook, other businesses are doing their best to prevent data mishandling. Even this crisis can help identify entities that truly care about society. For example, many companies revamped their entire set of data privacy rules. Even businesses that work in product-based markets are looking for additional ways to protect their consumers.
Customer and Community Overlaps
To truly help society, large businesses must recognize the difference between a customer and the community. Although a customer comes from the community itself, these two are not the same. Community includes all those that may not be materially connected with the business. Customer, on the other hand, is someone who has ties to the company. Thus, every firm must learn to treat the community just as well as they treat their customers. Only helping those who have financial ties to the business is not the best practice.
In fact, the actual values are tested when companies must aid individuals who are not involved with them. Ultimately, every institution must find an appropriate way to engage with the community. As mentioned, it does not really matter how they help. The bottom line goal is to have as many helpful organizations as possible!