Corporate Social Responsibility

Many companies utilize a formal code of conduct as a corporate social responsibility (CSR) tool to communicate or establish organizational practices (Erwin, 2011). These formal codes of conduct are also known as codes of business standards or codes of ethics, both are intended to clearly detail a commitment to CSR (Erwin, 2011).
Importance of Adopting Policies of CSR Codes of business standards are basic to the organization of CSR policies which are necessary to sustain and create an ethical culture within an organization (Erwin, 2011). The actions and conduct of employees of an organization are governed by the codes of conduct that ultimately affect the organizational culture (Erwin, 2011, p.536). This code of business standards promote ethical business practices and help avoid legal consequences. This commitment to social responsibility leads to reputational benefits as it shows a symbol of responsiveness and engagement of CSR by the organization (Erwin, 2011, p. 536). Other benefits of adopting codes of business standards are improved customer relations, product differentiation, reduced insurance premiums and risk management (Erwin, 2011, p. 536). Addressing CSR issues, organizations are becoming tempting organizations of all business showing commitment to ethical standards and enhancement, as well as, financial performance (Erwin, 2011). Consumers are not only looking at price and quality, but like to do business with organizations that are known to be responsible, for instance, treating workers fairly and being environmental stewardships (Marketing-Schools, 2012). Environmental Restrictions Depending on the thinking of individuals of what is most important to them are the restrictions that violate basic economic freedom. For instance, is profitability in an organization more important than yielding good