Chapter 2. Literature Review 2.1 The nature and evolution of CSR To understand the nature of the phenomenon CSR and what it entails would require of us to strip today’s definition down to its bare bones, trace its past and look into its evolutionary future through the work of writers in this space. With this understanding, it may be possible to look into how CSR can be ported over to a context where culture, organizational and social, differ from where it was originally conceived- the more developed Western world. The (Commission, 2015) defines CSR as “companies taking responsibility for their impact on society”. It adds that CSR should be initiated by companies, with public authorities playing a supporting role through policy and regulation. Companies the commission would consider as socially responsible would have to comply with the law, integrate social, environmental, ethical, consumer and human rights concerns into their business and strategy operations. This recent definition of CSR covers most if not all of the angles of the different definitions and models of CSR put forth by writers in the CSR space. However as written by many authors, this is a dynamic field that continues to evolve (Carroll and Shabana, 2010, Geva, 2008, Carroll, 1999, Lee, 2008, Pirnea et al., 2011, Waddock, 2008). According to (Spector, 2008) its roots can be traced to the pre- World War II era (early years of the cold war), but for the sake of this paper we shall not go that far back. We
Corporations are encouraged to conduct their activities in an ethically responsible manner, however neither the corporate world nor academia has produced a single – all encompassing definition of corporate social responsibility (CSR). The basic problem is that there are too many self-serving definitions that often lean toward the specific interests of the entities involved (Van Marrewijk, 2003). There has even been a quantitative study conducted on the many definitions of the term (Dahlsrud, 2006).
The purpose of this essay is to research the notion of CSR and uncover its true framework and outline what social responsibility truly means to corporate organisations, and whether it should be seriously considered to be a legitimate addition to the corporate framework of an organisation.
Based on my interpretation of CSR, I see it as a voluntary obligation that companies have promised to their stakeholders to fulfill by improving, or at least not harm, the environmental and social wellbeing. When companies engage in CSR, they voluntarily promise to, for example, carry the responsibility to protect the environment and take actions against bribe or other corruptive activities related to their business. It certainly has some positive influences to specific areas based on my knowledge gained from other classes; nevertheless, when judge CSR in the context of total impacts on our society and environment, it is obvious that CSR has failed its mission to lessen the negative impacts of business based on the evidences that provided by the author. Also, since there is a strong positive relationship between CSR behaviors and consumers’ reactions to a firm’s products and services, it seems to me, now, that CSR for the most companies is just a fancy cover that helps them to create or promote a good image and reputation. The recent case that shows the failure of CSR of Volkswagen even make me believe that CSR programs may be just a marketing or public relation exercise for many
Corporate Social Responsibility (CSR) is something that affects all companies and should be an active factor in the company’s decision making. It is something all corporations need to care about. CSR is when business’ or corporations take part in an initiative or campaign for a cause that will benefit society and/or in some way make the world a better place (Taylor, 2015). Initially, Corporate Social Responsibility started to take shape around the 1950’s, but some say that it dates all the way back to the 1800s, the idea of CSR was seen (Carroll, 2007). One may think that because it is dated so long ago, it doesn’t have an important impact today nevertheless, it is proven that Corporate Social Responsibility is a pathway for entities to self benefit as they are in the process of benefitting society.
In this article, “The Truth About CSR,” authors Rangan, Chase and Karim stress the importance in aligning a company’s social and environmental activities with its business purpose and values (Rangan, Chase, & Karim, 2015, 41). Outcomes of CSR programs should be a “spillover” and not a primary focus of a business, expressing concern towards social responsibility and corporations failing to contribute to society accordingly (Rangan, Chase, Karim, 2015, 42). There is a great deal of importance in companies refocusing their CSR activities on a primary goal and in providing an organized process for bringing consistency and discipline to CSR strategies (42). Rangan, Chase and Karim want corporations to understand why it is important for them to evaluate their CSR activities and refocus them towards the goal of reinforcing the firm’s societal and environmental actions, while also ensuring their actions add to the overall purpose and values of the corporation. According to the authors, even though
THE CORPORATE SOCIAL RESPONSIBILITY (CSR) MOVEMENT has grown in recent years from a fringe activity by a few earnest companies, like The Body Shop, and Ben & Jerry’s, to a highly visible priority for
Corporate social responsibility (CSR) is the pledge a business makes where it promises to behave ethically and contribute to economic development while improving the quality of life of workforce and their family as well as the local community (Pride, Hughes, Kapoor 42). This practice helps to form or improve the positive image of the company. Businesses that follow the socially responsible model consider the impact of the company’s actions on society. This also includes promoting and supporting local, national and global causes, which is a part of CSR called corporate philanthropy, where businesses donate some of their profits or resources to charities (Taylor). Companies that show social responsibility this way must be devoted to doing so on a regular basis, because if don’t follow through with it, your organization may be viewed by the public as dishonest. Many critics of CSR believe that this model reduces the main goal of business, restricts the free market goal of maximizing profit, and also limits the ability to compete in a global marketplace (Pride, Hughes, Kapoor 47). Though critics may believe they are right, CSR gives companies a chance to address social issues caused by business’ and other factors and allows them to be a part
As a result, CSR has emerged as an inescapable priority for business leaders in every country. Many companies have already done much to improve the social and environmental consequences of their activities, yet these efforts have not been nearly as productive as they could be—for two reasons. First, they pit business against society, when clearly the two are interdependent. Second, they pressure companies to think of corporate social responsibility in generic ways instead of in the way most appropriate to each firm’s strategy. The fact is, the prevailing approaches to CSR are so fragmented and so disconnected from business and strategy as to obscure many of the greatest opportunities for companies to benefit
For many years, researchers held that the core responsibility of a corporation was to provide shareholders with financial returns. Carroll (1979) proposed that organizations have other types of responsibilities towards the society. In Carroll’s view, at some stage society has economic, legal, ethical, and other expectations. The essential part of Carroll’s definition of CSR is that a company has four primary responsibilities: to be profitable, observe the law, be ethical, and conduct discretionary activities. Drawing on those four responsibilities Carroll (1991) created a four-level pyramid of CSR and stated that the CSR policy of a company must include all of them. Carroll placed the economic responsibilities at the base of the pyramid, since for a company to operate successfully, it must have a financial return. On the second level were the legal responsibilities which in order to be fulfilled corporations must pursue their economic objectives (Carroll, 1991). Placing the economic and legal responsibilities at the bottom of the pyramid was reasonable because those two are fundamental for a company to be successful. The ethical responsibilities were placed on the third level of the pyramid suggesting that organizations ought to conduct their businesses operations in a fair and appropriate way and ought to protect the stakeholders’ moral rights (Carroll, 1991).
CSR is an important part of how a business operates in an ethical way, a corporation’s practices are deemed as ethical if it operates in such a way that is both clean and ecological to the environment, and one that abides by the law. By following this conduct, the corporation follows a much moral way of operating. A corporation that operates in harmful ways, such as exploitation, corruption
Various authors have different definitions of what Corporate Social Responsibility. According to Lorde Holmes and Richard Watts, 1998 in their publication ‘Making Good Business Sense,’ they define CSR as “the continuing commitment by businesses to behave ethically and contribute to
We examine firms’ use of corporate social responsibility (CSR) as one of their business strategies after a rise in public responses, has led to heightened corporate action. We find that firms are taking more corporate action due to more public scrutiny and fear of financial loss. We find there is an abundance of definitions of CSR but whilst they are all coherent, not one of these definitions is applicable to every industry. With further research, it is highlighted that it would be difficult to increase regulation of CSR and reporting standards whilst there is no clear definition to adhere to. We find that whilst companies use CSR marketing, it is not the only reason for using CSR as one of their business strategies.
Referring to a quotation by (Solomon 1993) “there is a contradiction between an endogenous ability to profit and the company’s distribution to society”. It is worth noting that CSR implementation and activities come with costs on it. The argument against the implementation and practice of CSR by organisations most times points to the cost impact. CSR by an organisation will increase operating costs, which
The concept of corporate social responsibility (CSR) has been developed for decades and it has been conceptualized in a number of ways. The business only can get success if there is interaction between all stakeholders in the company. The business organization of any form whether it is small or large, are seen as a creation of society and their survival is only dependent on the society. Socially responsible firms view CSR as a source of competitive advantage by attracting a higher quality and quantity of job applicants (Fombrun and Shanley 1990; turban and greening 1996). CSR can be defined as that strategy which manages the business processes to produce an overall positive impact on society. CSR is a concept in which the company decides how to interact with its stakeholders on a voluntary basis involving social as well as environmental concern. According to kotler and lee (2005) CSR is “ an obligation undertaken in order to improve the welfare of the society through on demand business application and contribution of corporate resources”
Debates over the concept of csr span from the 1930s to the 21st century. A debate over the responsibilities of corporate managers and directors to their shareholders and other groups directly influenced by corporations took place in North America during the 1930s, marking one of the first significant