Corporate Social Responsibility and Goodwill Case
Business people see corporate social responsibility (CSR) and profitability as contradictory, but the two may complement each other in ensuring business success. Regarding the computer business case, the proprietor faces a dilemma. If the owner moves the business to another geographic location (country), profits will increase due to reduced production costs, but locals in the current location will suffer job loss. On the other hand, if the business remains in its current geographic location, it will continue experiencing the impacts of tough economic times while making modest profits. Based on CSR principles and goodwill, the business should remain in its current location to safeguard the jobs of a community that has supported it for the past 20 years.
One of the CSR principles that may force the company to maintain its operations in its current location is its philanthropic responsibility. Philanthropy, as a pillar of corporate social responsibility, challenges companies to contribute positively to society. Some actions deemed to contribute to society positively include participating in fundraisers and donating to charities. A company that values CSR will always make philanthropic contributions by sacrificing a portion of its profits. While moving the computer company to the new location will enhance profitability, part of the profits will still go to philanthropic courses. Therefore, instead of moving the company and leading to job loss in the current location, the company can sacrifice the pursuit of more profits and preserve current jobs.
Also, as a successful socially responsible business, the computer company should align community impact goals with its business operations. Accordingly, this involves identifying actions that align with the business’s employee base, its mission, and the community it serves. The company must be willing to practice authenticity as it pursues such causes. Authenticity includes sacrificing to fulfill community needs. By turning down the opportunity to go overseas, the company will forego enhanced profits and preserve jobs for over 800 people in the local community.
Another CSR principle that may influence the company to stay in its current location is accountability. This principle is concerned with a company realizing that its actions affect the external environment; and the need to assume responsibility for its actions. A company should quantify the impact of the actions taken internally and externally. More specifically, there is a need to report the quantifications to the affected parties. Further, a company should report the actions taken to internal and external stakeholders and how the actions will affect them. By using the accountability principle, the computer company should consider how moving to a global location will affect the local community. External stakeholders will resist such a move and ask the business to operate from its current location.
Finally, the principle of goodwill will be relevant as the company considers whether it will move out or stay in its current location. Goodwill refers to intangible company possessions beyond its tangible assets, such as reputation, customer loyalty, and employee morale. First, a business maintains its reputation by embracing ethical practices and practicing reliability. An ethical and reliable company will attract more customers, as modern customers look beyond product quality while considering whether to patronize a business. If the computer business moves to a new location and renders over 800 people jobless, negative press may lead to reduced sales. Second, the computer company may not get the best talent, as the potential candidates understand that they may get laid off any time when the company acquires new opportunities. Therefore, looking beyond profits will improve the computer business’s sustainability in the long run.
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Question 
I own a company that has been manufacturing computer parts for the past 20 years and I’ve been able to maintain a decent profit margin despite tough economic conditions. Recently, however, I’ve been presented with an opportunity to move my production overseas.
Corporate Social Responsibility and Goodwill Case
The move will reduce my manufacturing costs significantly as a result of lower labor costs, resulting in an anticipated 15 percent increase in profits for the company. However, my production facility is the largest employer in the surrounding area and shutting it down will result in the loss of over 800 jobs. The loss of those jobs would devastate the economy of the local community. Should I move my production overseas or keep it here in the U.S.?