Corporate Social Responsibility in the Fashion Industry - Case Study Example

Student’s Name Professor’s Name Course Name Date Corporate Social Responsibility in Fashion Industry: Pros & Cons The focus of this paper is on identifying the different advantages and disadvantages related to corporate social responsibility amongst the global fashion industry as a whole. It is noted that corporate social responsibility emerged within the mid of the 20th century and since then has continued to garner extensive popularity across the different sectors (McWilliams and Siegel 119). Nowadays, the concept of CSR has gathered lots of meanings given that researchers as well as corporations continue to hold divergent perspectives in regards to its overall definition thereby creating a debate on what CSR notably entails. In relation to this research paper, corporate social responsibility is deemed to be the overall concept that fairly incorporates aspects related to both social and environment-based concerns into day-to-day operations as well as their immediate interaction with distinctive number of stakeholders but on a voluntary platform (McWilliams and Siegel 120-122). Regardless of the sector, corporate social responsibility initiatives assists business ventures to entice customers while at the same time attract and retain unique talents. On the contrast, Wood (694) argues that it is far much better that businesses comprehend both the benefits and limitations of corporate social responsibility activities for the purpose of selecting initiatives that fairly benefits both the company and surrounding community at large. To effectively conduct corporate social responsibility within the larger fashion industry; most of the companies within the sector adopt numerous forms of instruments like the code of conduct; auditing reports; labels and certification as well as reporting frameworks (Wood 695). For instance, in a research conducted within this industry; both Bestseller and H&M CSR related activities were analysed and reports made public. It was established that Bestseller’s CSR related activities are derived from the caring motive that is deemed to be visible throughout their immediate communication strategies that in fact utilise ethos appeal (Wood, 696-700). The firm uses a combination of auditing, labelling and certifications as well as reporting. It does not use any form of external auditors or even present reports on most of their respective initiatives (Schwartz and Archie 508). In consequent, H&M execute CSR in a far much different manner given that it uses the compliance and non-profit driven motives. Following this line of reasoning, it can be noted that they adopt a perspective related to both compliance and profit-driven motives. It thus technically means that its overall communication strategies are unique as it makes use of both logos and ethos appeal as a way of establishing its overall credibility. Suffice to say; it also adopts numerous initiatives in regards to their CSR operations like corporate philanthropy that is fairly augmented with a cause-related marketing, cause promotions and social responsible business operations (Schwartz and Archie 508). For this case; H&M executes CSR for the purpose of making enormous profits and thus, it utilises its programs to connect with marketing and PR related activities. Just like its counterpart; Bestseller; H&M also utilises similar CSR instruments but put much emphasis on reporting aspect since it focuses more on crucial international reporting standards. In general, it can be noted that both of these two popular fashion industry firms engage in corporate social responsibility in proper and structured way and in accordance to the industry for which they operate. Advantages of CSR Most of the companies operating within the larger fashion industry use it as a PR tool. This way, it is used for producing enough positive publicity in relation to the company (Borreskov and Knudsen 66). By doing well and focusing on the good side; it is ascertained that the company can actually attain and in other cases surpass the underlying expectations of numerous stakeholders. To be able to gain from such perfect efforts, the companies are called to ensure efficient communication to the numerous stakeholders; a factor that favourably employs public relation concepts. It can be argued that in the event that not a single person understands the good side of a company; then it is ascertained that neither existing nor underlying consumers or even employees will be able to perceive the company as a potential product manufacturer, employer or even investment opportunity (Borreskov and Knudsen 66). In this instance, in case CSR efforts are executed fairly well, providers positive publicity aspects for the company at hand. It is arguably right to mention that positive publicity in regards to corporate social responsibility is deemed to be sole aspect that fosters a consumer to select a given product over another thereby; the chances of attracting new customers are extremely high. On a similar note, in the case of negative publicity related to CSR might result to both potential and existing consumers into boycotting a product altogether (Borreskov and Knudsen 66). Equally, most of the potential employees would mostly take into consideration a firm’s environmental commitment as well as engagement in matters related to social responsibility in the course of choosing a new employer. In this regards, it can be said that corporate social responsibility could assist companies meet their specific needs, which means that it helps meet its overall corporate needs for the purpose of obtaining perfect PR while at the same tome accomplish distinctive marketing goals (Borreskov and Knudsen 69). In subsequent, numerous stakeholder groups are deemed satisfied; existing investors feel positive making investments within the company that is visible in the media since they engage in good deeds to both their staffing personnel and the overall environmental concerns. The increased emphasis on CSR as well as the pressure from the underlying public firms to integrate CSR related activities in their daily operations has been seen to be a fundamental reason for entities to constitute an effective PR department (Borreskov and Knudsen, 70). The department is set to ensure that the company’s overall efforts in connection with CSR platforms are communicated in a proper and efficient manner to the relevant stakeholders. Borreskov and Knudsen (76-88) argue that the fundamental reason for executing aspects related to corporate social responsibility is altruism. In this regards, whenever a fashion company engages in an irresponsible activities, the numerous stakeholders will be allowed to request the underlying government entity to come in and take action while it will do this through establishment of rules and regulations that would compel these firms to respond to matters social needs and demands (Borreskov and Knudsen 98). This provides a limited and unfavourable environment of operations for these companies and thus, companies would be forced to operate within the confinements of societal expectations and thereby communicate to the public about their respective efforts in keeping more freedom so that they can accomplish their immediate goals and objectives like attaining efficient profitability levels. Corporate social responsibility within the fashion industry provides a platform for a cause-related marketing strategy. These cause-related marketing initiatives are depicted by these fashion companies engaging to making sufficient amounts of contributions or donating certain percentage of their overall revenues to specific cause that is focused on product sales (Barnett 798). For most cases, these offers are mostly linked to specific product and cause and they will only be in the offing position within a specified timeframe. The fundamental objective of this program is set to formulate a win-win situation for both the fashion entity and the resultant cause while it receives surplus and positive levels of attention by being connected to a certain charitable cause that in turn helps to increase on the level of sales (Barnett 802). On the same note, the exact cause is set to accumulate certain degree of benefits in relation to the product sales. In this CSR initiative, the entity commits to supporting certain levels of the entire revenues or specified amounts that is sold per each cause product on sale. Considering the fact that the company is expected to receive intensive levels of sales revenues, it also puts more investments in the course of promotional events like distinctive paid advertising features (Barnett 803-804). It is argued that CRM initiative would always require intensive levels of campaigns in order to post successful results since the underlying degree of contribution from the entity largely focuses on consumer actions. It is noted that the fashion industry just its other counterparts benefit adopt corporate social responsibility as a platform for improving its overall financial performance (Borreskov and Knudsen 114). These companies use different marketing strategies to lure customers into purchasing their products thereby increasing revenue levels. In essence, it fosters a substantial reduction in the level of operation costs especially since suppliers of raw materials would opt to charge less for their supplies while the government agencies might also opt to help these companies realise their operational prowess through introduction of positive interventions. Disadvantages of CSR The major disadvantage of corporate social responsibility within the fashion industry rests with the fact it compels them to continuously engage in fundraising activities at the expense of their day-to-day operations (Borreskov and Knudsen 112). The management is always exhausted in their options to look for the numerous ways of coming up with strategies of increasing the sales revenues in order to meet their immediate CSR obligations. In the event that they fail to attain their commitment to these goals then it results to them loosing lots of time chasing nothing (Borreskov and Knudsen 116). Consequently, the activities related to CSR in this sector is indeed costly given that the process of integrating cause-related marketing strategies requires intensive levels of expertise as well as cash-based resources that needs to be fund the entire product-sales campaigns (Borreskov and Knudsen 112). In cases where, the integration of these promotional strategies are not fairly established then it becomes a challenge to convince customers to buying into the idea. In conclusion, it can be noted that just like any other industry; corporate social responsibility in fashion industry is indeed unique and called for. It helps to improve on the underlying brand image of the company through the adoption of effective public relation tools. It also focuses to help them attain efficient and sufficient profit sales within a given period. On the contrary however; the entire process is expensive given that it requires extensive expenditure of company resources that would have been used for other notable purposes like engaging in research and development practices. In fact, an obligation to engage in corporate social responsibility leaves companies with no choice but to engage an enormous amount of resources trying to look good and caring to the public. Consequently, it results to them being focused more on finding more efficient ways of accumulating funds needed for the activity at the expense of directing their efforts towards accomplishing profitable levels. Works Cited Barnett, Michael L. "Stakeholder influence capacity and the variability of financial returns to corporate social responsibility." Academy of Management Review 32.3 (2007): 794-816. Lykke Borreskov Juulsen and Helle Knudsen, Communicating CSR in the high street fashion industry: A discussion of CSR communication using Bestseller and H&M as examples, Master Thesis: Cand.ling.merc. - International Market Communication & PR, English, (2010): 2-165 McWilliams, Abagail, and Donald Siegel. "Corporate social responsibility: A theory of the firm perspective." Academy of management review 26.1 (2001): 117-127. Schwartz, Mark S., and Archie B. Carroll. "Corporate social responsibility: A three-domain approach." Business ethics quarterly 13.04 (2003): 503-530. Wood, Donna J. "Corporate social performance revisited." Academy of management review 16.4 (1991): 691-718. Read More