Introduction 1 Describe what is profit and why this is important to organizations Profit is an amount of money earned by business organizations as a result of products sold and services rendered Mathematically profit can be expressed as PROFIT TR TC Where TR Total revenue income TC Total cost If TR TC companies enjoy profits If TR TC Business Companies face loss From the above mathematical relationship we can understand that business firms can maximize profit only and if only their companies TR exceeds TC hence it is the duty of every business enterprises to design viable business strategies towards ensuring maximum profit Importance of profit to organizations Profit is lifeblood of every form of business enterprises be it sole proprietorship partnership or corporations Because it is through profit a company can be able to survive sustain and expand Thus profit is crucial for any form of business organization for the following reasons It helps organizations to purchase raw materials settle their employees salaries and pay debts It helps to get a competitive advantage by enhancing product development and marketing research thereby adapting creative technologies and contemporary methods of production Companies with adequate profit status can invest in new market territories and tap large segment of buyers by opening new branches production facilities and sales outlets Describe what is CSR In order to understand the essence of CSR it is worth recalling the definition of marketing Marketing narrowly can be defined as a societal and managerial activity by which individuals or groups exchange products of value so as to satisfy their needs and wants
From the above definition one can understand that the goal of marketing is customer satisfaction Hence a satisfied customer is expected to become regular and loyal to its product provider Consequently business firms can be able to secure stable and sustainable profit from the happy loyal customers In light of the above the notion of CSR can be seen and understood from the goal of marketing perspective or let's say neo marketing perspective for the following major reasons CSR emphasizes the issue of Green marketing from production to disposition and challenges the impact of externalities pollution ozone depletion CSR stresses the need to protect the health and safety of consumers in particular and societies in general CSR is aimed at balancing ecological concerns and maintaining the welfare of the society by advocating consumer protection and Ethical business engagement Bearing the above notions in mind various scholars defined CSR from different perspective based on their area of interest Say why organizations look at CSR With an increasing pressure from governments consumer and environment advocacy groups companies now a days are focusing on CSR and started to make it an integral part of their business and marketing strategy In addition to the above external force the following scenarios are attributed to why organizations look at CSR The need to secure a long lasting optimum profit The need to create The we image in the mind of consumers thereby winning their psychological buying desire
The need to use scarce resources in an economical and fair way The need to enhance corporate citizenship Activities that a business may carry out to be categorized as corporately and socially responsible Business organizations may undertake different activities to be categorized as corporately and socially responsible Inputs The more manufacturing business firms utilize less hazardous product in their production operation the highest they can get market acceptance and labeled as socially responsible company Example Companies manufacturing Baby formula are expected to ensure the content and nutritional make of their baby powder before offering to the market Business enterprises should use environmental friendly packages and wrappers that can be recycled and has less ecological impact Example Using paper packages instead of plastic bags Community Engagement participating in community and social activities is vital to address social community problem Profit Vs CSR The most important and yet challenging task of business organizations is balancing the notion of CSR with the idea of profit maximization Because CSR is more of qualitative and mostly it bears cost of maintaining societal welfare and ecological concerns as a result many firms engage and exercise pseudo CSR by passing the ethical issues In such situation business firms are expected to Have long run vision of serving the market and enjoy optimum profit accordingly Ensure their production distribution and consumption processes of their products are not with the expense of the environment and the societies Apply wise use of resources Organizations aware of Al Marai Dairy company CSR activities Opening schools and training centers in villages and remote towns Reduce water and energy consumption Providing training programs in dairy manufacturing activities along with TVTC Selling fresh milk healthy to consumers Abdulatif Jammeel Toyota dealer Sponsoring the Saudi football league Dawry Jameel in Arabic it means beautiful league Protecting noise pollution with a motto Do not honk the horn don t disturb me Providing employment opportunities for local residents with a slogan The beautiful gateway to prosperity
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