Profitable Corporate Social Responsibility

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An area that is often overlooked when people discuss the profitability of corporate social responsibility (CSR) initiatives is minority business development, i.e. Supplier Diversity. This is an area that has not been fully mined to discover innovative ideas and practices that not only serve to have a positive impact on minority communities, but also can provide a positive ROI back to invested corporations.

Supplier diversity often gets placed in the category of affirmative action as it relates to negative connotations of what the true purpose of these types of initiatives really are. Nevertheless, tangible value can be obtained from the performance of diverse suppliers. High performance organizations understand that supplier diversity is more of a supply chain issue than it is a diversity issue. Accenture completed a study that identifies the definitive link between supply chain performance and the bottom line. Therefore, healthy supply chains lead to healthy companies.

The ways which minority/small businesses can impact an organization's supply chain include but are not limited to:
  • Lower costs due to less overhead
  • Innovative solutions
  • Specialized services
  • New technology
  • Increased flexibility
  • Key insights into target markets

Furthermore, the impact of doing business with these companies can be linked back to a company's revenue potential. One must remember, that these suppliers are often current or potential customers. The more advanced and effective a company's supplier diversity initiatives are, the more positively that translates to influence that a company can have within certain market segments. Companies that take a more proactive, innovative approach to their supplier diversity initiatives will reap the benefits on both ends of the value spectrum. Now that's CSR at it best!

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