Question

‘CSR plays an important role in building customer loyalty based on distinctive ethical values. Company can separate them from the market competition’. Infer the benefit of CSR to companies indicated in the above statement.

• A. Brand differentiation
• B. Human Resource
• C. Risk Management
• D. Licence to operate cooperation

Hint:

CSR can be a powerful tool for brand differentiation by aligning a company with ethical values that customers appreciate.

Answer 1

The Correct Option is A

Corporate Social Responsibility (CSR) involves a company's efforts to conduct business in an ethical and socially responsible manner. The statement emphasizes that CSR helps a company earn customer loyalty and stand apart from competitors through strong ethical values. This directly reflects the concept of brand differentiation.
Brand differentiation is a benefit of CSR where:

• A company enhances its image and goodwill in the eyes of consumers.
• Ethical practices become part of the brand identity, making it unique.
• Customers are more likely to stay loyal to a brand they trust and respect.

Explanation of Other Options:

• (B) Human Resource: CSR may impact employee satisfaction, but the question focuses on customer loyalty.
• (C) Risk Management: CSR reduces risks, but the passage doesn’t discuss this aspect.
• (D) Licence to operate cooperation: This refers to regulatory approval, not market competition.