Corporate Social Responsibility Adds to Brand Value Essay

Corporate Social Responsibility Adds to Brand Value - Essay Example The relationship between CSR and brand value can be characterized as quite close. The specific relationship is reviewed in this paper. Particular emphasis is given on the potentials of CSR to add brand value. The literature published in regard to this subject has been reviewed. The studies reviewed indicated that CSR has a key role in adding brand value. However, the above role is not standardized in firms worldwide. Rather, it is depended on the position of each firm in the global market, the organizational structure and the local culture and ethics. Indeed, consumers worldwide are not likely to be equally affected by the performance of an organization in regard to CSR, even if the value of the organization as a business unit is highly influenced by the level at which CSR rules are incorporated in the organization’s strategies. 2. Corporate social responsibility and brand value 2.1 Corporate social responsibility – overview In order to understand the involvement of CSR in adding brand value, it is necessary to describe the context of CSR, as developed in modern organizations. In accordance with Hennigfeld et al. (2007) the corporate social responsibility can be described as an activity of ‘undertaking business in an ethical way in order to achieve sustainable development, not only in economic terms, but also in the social and environmental sphere’ (Hennigfeld et al. 2007, in Mead and Andrews 2009, p.429). In other words, corporate social responsibility, as part of organizational environment, can be characterized as a framework of rules aiming to secure that the operations of a particular firm is ethical, as referring to the labour laws, the environment and so on. The CSR framework of each organization is usually based on the local ethics, laws and culture. However, when the firm operates in the global market its CSR rules need to be also aligned with the international laws and principles governing various organizational activities. T he plan of CSR within modern organizations is presented in Figure 1, Appendix. Through the specific graph it is clear that CSR defines the relationship between the organization and its stakeholders, including the customers, the government and the communities. The level at which these relationships are developed or not affects the firm’s image in the market, including its brand image. In practice, it has been proved that CSR is used as a tool for promoting brand value. At the first level, such trend can be understood since CSR affects the firm’s image in the market, including its brand image. However, the terms under which CSR can be involved in adding brand value are not quite clear. The context of the use of CSR for adding brand value is described below, referring to the practical implications of the relationship between CSR and brand image. 2.2 How corporate social responsibility adds brand value Branding is closely related to CSR. Their relationship can be described as follows: firms that have been found to violate the law in regard to labour relations or the environment are not likely to be welcomed by consumers in the developed countries (Visser, Matten and Tolhurst 2010). The activities of the above firms in the developing countries would be also negatively affected. Indeed, producers in these countries would not trust such organizations and would prefer to