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Abstract
An organization cannot operate efficiently without considering the social and environmental impacts of its operations. Therefore, organizations have a sense of social and environmental responsibility since their activities have either beneficial or detrimental implications to the environment. Therefore, the concept of Corporate Social Responsibility (CSR) emerges whereby self-regulation is incorporated into the business model. CSR initiatives are viewed as strategies of giving back to the society in which organizations operate in an effort to improve current conditions and enhance sustainability. CSR initiatives portray the accountability of organizations with regard to the environmental, social, and economic impacts that they cause. This paper will focus on various aspects that are relevant to different CSR dimensions.
Introduction
Running a corporate organization has various implications for the environment in which it operates. This assertion implies that a business affects its surroundings either positively or negatively. Therefore, organizations have put up measures that are geared towards safeguarding and improving the conditions of their environments (Zkan, Nicolopoulou & Zbilgin, 2014). In this sense, companies engage in constant evaluation of their impacts on the environment and social welfare in a bid to formulate initiatives that portray responsibility for their actions. Therefore, the concept of corporate social responsibility (CSR) emerged whereby corporations give back to the society and show their concern with various aspects such as environmental conservation, empowerment of communities, and providing solutions to socio-economic problems (Epstein & Yuthas, 2014).
In this regard, business entities engage in CSR to enhance their accountability to various stakeholders besides investors and shareholders. This paper will consider the different aspects of CSR in a bid to have a comprehensive understanding of the concept.
Background
The initial stages of CSR emerged in 1000 BC whereby authorities punished careless workers. This move was geared towards fostering personal responsibility among workers in a bid to create a safe the working environment. Senators in ancient Rome complained about the traders failure to pay taxes aimed at funding the military. This aspect implied that businesses had a political and social responsibility for enhancing security (Visser & Hollender, 2011). More CSR activities were evident during the industrial revolution as workers welfare groups emerged to champion for habitable working conditions and social welfare. The issue of CSR in the 1920s widened as businesses went beyond ethical operations.
The modern era of CSR emerged in the 1950s. The evolution saw the shift from the concept of social responsibility (SR) to corporate social responsibility (CSR). Numerous publications were made during this period to define the concept of CSR comprehensively. The expansion of CSR literature in the 1960s further broadened the resource base for understanding the concept. Between 1970 and 1980, research on the CSR concept intensified as new themes were incorporated.
The 1990s saw increased application of the concept of business operations after various research procedures indicated that CSR is essential for environmental, economic, social, and political sustainability. The 21st Century has been characterized by intensified CSR initiatives as corporations engage in projects that aim at improving environmental, social, and economic conditions of their surroundings and beyond (Visser, McIntosh & Middleton, 2006).
Theories of Corporate Social Responsibility (CSR)
The discussion on CSR heightened in the 1950s. The term corporate social responsibility referred to the manner in which a corporation came up with different ways in which to solve the problems that existed in society. From the 1950s, the approaches to corporate social responsibility have also incorporated the widespread study of the relations between the corporation or business and societies. Therefore, businesses view the problems that exist in the society as the epicenter of the analysis (Witte & Jonker, 2006).
The study of the theories of corporate social responsibility takes into account some fundamental viewpoints through which the theories can be consolidated. These viewpoints are the corporation and the relation to its peripherals and communal costs, the internal point of view of the firm, and the firm and its environmental relations. According to Garriga and Melé (2004), using the above key viewpoints, the theories of CSR can be classified into four main categories, viz. the instrumental theory, the political theory, the integrative theory, and the ethical theory.
The Instrumental Theory
This theory considers the business as a part of a larger economic system. The driving force of the economic system is self-interest. The sole prerogative and accountability of the business is wealth creation in society. The economic interactions between the business and the society are predominantly considered. The social activities of the company are taken into account only if they end up with the consistent creation or maximization of wealth (Banerjee, & Shastri, 2010). This theory views CSR as a means to an end, with the end being profit making. Therefore, corporations engage in CSR initiatives in a bid to improve their relationships with its stakeholders and maximize profits in the long-term.
The Political Theory
This theory considers the power that the business yields in society. This aspect focuses especially on its interaction with society and the duty in the policy area that the business associates with this power. The business has a role to adhere to the set rules and regulations. The business takes this commitment to a practical responsibility. A responsible company will consider the rules and regulations as means for social good and will make the necessary efforts to obey them in good faith. A business is supposed to respect the boundaries of law, even if the punishment for breaking the rules and regulations is undefined. The business vision in CSR should be to affirm and obey the society limits of legal responsibility (Rahim, 2013).
The Integrative Theory
This theory argues that the existence, growth, and continuity of the business depend on the society. Therefore, the business should always integrate social demands. The social consideration gives the business some degree of legitimacy and prestige. The stakeholder theory, which is an example of integrative theory, holds that the firm has multiple relations with component groups. The affiliation between the business entity and the stakeholders ends in mutual effect, where the actions of the stakeholders affect the business, and the actions of the firm affect the stakeholders respectively (Garriga & Melé, 2004).
Corporations also have a philanthropic responsibility to contribute to the projects initiated by the society, even if the projects do not emanate or are independent of the business itself. It will not be an obligation for the business to contribute to the societal projects if they do not affect the day-to-day operations of the business. However, the business would be obliged, in the spirit of public generosity, to act and contribute to support the general welfare and the needs of the community surrounding it (Vogel, 2006).
The Ethical Theory
Conventionally, business should operate responsibly and ethically. A corporation should view itself in the spirit of citizenship with the principal obligations similar to those demanded of every citizen. This aspect requires the business to cultivate a corporate culture driven by social obligation. The idea of a firm acting as a citizen is not new, as firms are required to depict the qualities of corporate citizenship in their operations (Huniche & Pedersen, 2006). This theory also takes into account the fact that every business has some economic and social power with some having greater economic and social power than others and even their governments.
Every business should feel a sense of social responsibility towards the local community and it should show the willingness to improve the surrounding communities including environmental protection. Ethical behavior can also become an opportunity for some businesses to achieve competitive advantage by cultivating long lasting and fruitful relationships with stakeholders. To develop ethical behavior might not be the best thing for an enterprise to do for pure profit making. However, by valuing the societal or stakeholders welfare, the decision could achieve greater benefits for the company (Porter & Kramer, 2006).
Drivers that Push Businesses to Engage in CSR
The increased initiatives by corporates to engage in CSR can be attributed to several factors. This aspect encompasses internal and external environmental elements that have a bearing on the operations and performance of the organizations. In this regard, traditional perceptions on basics of business involving factors such as competition, survival, and profit accumulation have been replaced by CSR strategies that focus on sustainability of various aspects that affect their operations.
For a long time, governments have been relying on legislations and policies that are geared towards the regulation of environmental and social issues. However, various challenges have subjected governments to pressure primarily in developing countries resulting in decreased engagements on the issues of social welfare and environmental regulations. For this reason, corporations sought to fill the gaps in a bid to improve the environment in which they navigate as a means of creating a favorable surrounding for its operations (Lozano, Albareda & Ysa, 2008).
There have been increased demands by stakeholders for the disclosure of corporate engagements. Customers, investors, employees, shareholders, suppliers, communities, and activist organizations have pressured business entities to disclose their activities coupled with how they are working towards enhancing environmental sustainability, providing solutions to social problems, and fostering economic growth and development. Since organizations cannot ignore the demands of the parties that have a bearing on their survival, disclosing their activities through CSR initiatives is thus inevitable. Similarly, increased customer interests have subjected corporations to adopt CSR techniques in portraying their ethical standards. The social performance of a business in terms of ethics influences the customers purchasing decisions, and thus it affects its operations (Kotler & Lee, 2004).
Investors have also driven business entities towards CSR due to their increased inquiries on what the entity is doing about the environment and alleviation of social problems. Nowadays, investors assess businesses based on ethical concerns besides their financial performance before injecting funds into the entities. The competitive labor market has also triggered businesses to engage in CSR since workers consider not only the remuneration aspect, but also the working conditions (Murray & Dainty, 2013). Therefore, employers are required to participate in CSR activities in a bid to hire and retain skilled workers.
Benefits of Engaging in CSR
A business entity benefits in numerous ways by engaging in CSR initiatives. This assertion implies that their efforts towards environmental sustainability, improvement of social conditions, and the development of economic aspects of society has gainful implications to the parties affected. The business environment is subject to two different types of CSR. The first type of CSR entails the involvement of companies in societal issues via sponsoring different societal programs for the benefit of the surrounding society. On the other hand, the second type of CSR entails the provision of goods and services to the surrounding society. This aspect encompasses the production of environmental friendly products and job creation among other initiatives (Benerjee, 2009).
A company that engages in CSR initiatives tends to cut its production costs. Since CSR does not necessarily have to incur costs, it also facilitates the reduction of operational costs. Hiring and retention of highly skilled and efficient workforce through the provision of an enabling working environment minimizes the human resource expenditure and at the same time boosts productivity. Environmental conscious initiatives such as energy saving programs portray the corporations commitment towards sustainability (Selsky & Parker, 2005). In this light, the entity would be in a position to cut its energy utility bills and simultaneously promote environmental consciousness.
Furthermore, engaging in CSR encourages the efficient management of risks and liabilities, thus reducing unforeseen detrimental events that could cost the organization. Additionally, the costs that would have been incurred in traditional advertising strategies can be reduced through CSR. This assertion implies that CSR activities could also be used as means of promoting the goods and services offered by a corporation (Urip, 2010).
Corporations show their commitment to addressing environmental, economic, and social issues when they engage in CSR. Reflecting on the two types of CSR, the business portrays its real commitment in efforts geared towards positive change. For instance, the utilization of sustainable inputs in the production of goods depicts their concern for environmental sustainability. Similarly, the injection of funds into environmental charities and employees volunteering programs in community development indicate the continual commitment of corporations to their surroundings.
CSR facilitates the creation of a positive branding environment using communication platforms such as the social media (William, 2013). In so doing, corporations can enhance their visibility, thus influencing the public perceptions regarding their goods and services. Consequently, CSR acts as a marketing strategy whereby the initiatives that an organization engages in are published on various platforms such as the social media. Additionally, a corporation that engages in CSR fortifies its public relations. Public relation is a significant tool for business success since it shapes the perceptions of the public, thus creating the image of the corporation. In this regard, publicizing a corporations engagement in CSR activities on both online and print media facilitates branding of products and services, thus enhancing publicity (Louche, Idowu, & Filho, 2010).
Corporations that emphasize on CSR initiatives improve their relationships with government agencies. The formulation of policies by the government geared towards the enhancement of CSR among corporations is viewed as an astute move towards the comprehensive improvement and sustainability of the environment in which businesses operate. On the contrary, organizations that are less active in CSR tend to invite criticism, hence creating a negative public perception. Relating well with government regulators fosters healthy relationships, thus resulting in benefits to both the organization and the public through government support (Rahim, 2013).
A positive working environment is created when a corporation consistently commissions CSR initiatives. A working environment that considers the working environment of its employees creates motivation among them, thus improving their productivity (Porter & Kramer, 2006). Consequently, the company is more likely to meet its goals and objectives within the specified time framework. Furthermore, CSR boosts teamwork, thus fostering commitment towards goal attainment, hence the creation of more necessity for CSR project.
New business opportunities crop up when a firm values CSR in its operations. Perpetual interaction with all stakeholders improves the chances of noting and seizing new opportunities for growth and development. As a result, this aspect improves the relationships with the stakeholders, thus enhancing its performance (Zhao, 2014).
CSR Trends
Globalization has facilitated the shift from traditional CSR practices to novel initiatives that have been facilitated by numerous technological advancements. This aspect has seen businesses adopt new approaches aimed at enhancing CSR initiatives and themes (Okpara & Odiwo, 2013).
Technological advancements have facilitated the sophistication of rich data and communication technology. Business organizations have taken advantage of the new advancements through incorporating them into their CSR initiatives. The growth of smart devices has facilitated the collection of rich data that facilitates the communication on the various environmental, social, and economic implications of its operations (Andriof & McIntosh, 2001). Incorporating rich data and communication technology has been voguish in the contemporary business world in a bid to solve the environmental and social issues around the globe. Companies have diversified their C-Suites to in a bid to attain their full potential of solving global problems. The ideas have been incorporated into their CSR strategies, thus resulting in the depiction of the commitment towards accountability (De Bakker, Groenewegen & Den Hond, 2005).
Companies have intensified CSR initiatives that are geared towards advocating human rights issues domestically and globally. In a bid to promote justice and equality in society, business entities have incorporated the human rights aspect into the CSR field thereby showing commitment to the well-being of the society at the local and international levels. The United Nations Annual Forum on Business and Human Rights has promoted this initiative. Consequently, the issue of corporate human rights responsibility has gained popularity among businesses thereby creating new dimensions to the concept of CSR (Mullerat, 2010). Women and girls empowerment initiatives by corporates have gained momentum in the recent past. Business and multi-stakeholder initiatives have seen the development of CSR programs that seek to empower women and girls through programs based on education, technology, and environmental conservation programs (Kerlin, 2009).
Conclusion
The concept of CSR is multi-dimensional, and thus analyzing its different components is essential for the development of the business field. Since its origin in ancient Rome, CSR has evolved due to the dynamic nature of societies in which corporations operate. Therefore, various approaches have been applied in a bid to improve environmental, social, economic, and political aspects of society. In this light, different approaches such as the ethical theory have been incorporated into CSR to enhance its efficiency.
Numerous benefits ranging from reduced operating costs to publicity enhancements have been the result of corporations engagement in CSR programs. Globalization has also brought about various changes in how CSR initiatives are conducted. Consequently, new CSR trends have emerged in a bid to solve various global issues and promote business growth as well. Therefore, CSR is an integral aspect of business operations since it has a bearing on the success or failure of a business entity.
Annotated Bibliography
Andriof, J., & McIntosh, M. (2001). Perspectives on Corporate Citizenship. Toa Payoh, Singapore: Greenleaf Publications.
The new developments that globalization has brought to the 21st Century necessitate a new dimension towards the approach of CSR. This book illustrates the implications of technological advancements on the various business environments such as the workplace, external environment, communities, and the marketplace in general. The authors consider the new communication platforms as essential contributors to the image of a particular business since various mediums monitor their activities. According to Andriof and McIntosh (2001), companies need to fathom the environment in which they operate in a bid to be in line with the legal policies put forward coupled with enhancing the attainment of goals collectively as shareholders. The significance of this book is that it approaches CSR from different perspectives, hence increasing comprehensiveness.
Banerjee, P., & Shastri, V. (2010). Social Responsibility and Environmental Sustainability in Business: How Organizations Handle Profits and Social Duties. New Delhi, India: SAGE Publications.
According to Banerjee and Shastri (2010), the global economic trends experienced today have been characterized by economic crises resulting in the interruption of smooth business operations. Consequently, businesses tend to minimize their investment in CSR programs, thus posing a threat to environmental and social development. Innovative measures in collaboration with local-based solutions are seen as a potential for a sustainable social and environmental growth. Achieving sustainable growth in the dynamic 21st Century society requires the adoption of global social entrepreneurship , which considers social issues as opportunities for collective development. The relevance of this book is that it applies case studies that have an implication on the contemporary CSR.
Benerjee, S. (2009). Corporate Social Responsibility: The Good, the Bad, and the Ugly. Northampton, MA: Edward Elgar Publishing.
An illustration of the beneficial and detrimental aspects of CSR is provided in this book. Emphasis is put on the need for organizations to research on the vast attributes of CSR theories in a bid to understand the truth about it. Benerjee (2009) posits that the theories of CSR tend to reconcile business issues with social problems hence they do not provide a distinctive approach to the topic. A theoretical and legal framework based on the good, the bad, and the ugly needs to be implemented in the crucial research on the CSR agenda. The beauty of this book is that it relates the theoretical, financial, environmental, and social implications of CSR in a comprehensive way.
De Bakker, G., Groenewegen, P., & Den Hond, F. (2005). A bibliometric analysis of 30 years of research and theory on corporate social responsibility and corporate social performance. Business & Society, 44(3), 283-317.
This article focuses on an analysis of the various research findings of CSR over a period of 30 years. The various literature published is put under scrutiny, and the customers absorb the changes with time as new trends. A clarification of the vagueness of some literature availed to managers is done to put it into the current perspective. De Bakker, Groenewegen, and Den Hond (2005) posit that the prevailing introduction of new constructs in the corporate world has been accounted for inhibiting the application of CSR research recommendations. The sophistication of research methodologies is essential for the growth of CSR activities.
Epstein, M., & Yuthas, K. (2014). Measuring and Improving Social Impacts: A Guide for Nonprofits, Companies, and Impact Investors. San Francisco, CA: Koehler Publishers.
This book focuses on the roles that nonprofits and businesses have to play in trying to solve the social problems faced by humanity. The perspective is based on the essence of creating solutions to the challenges that clients face in their daily activities other than just providing them with goods and services. Social impact should be the guidance for organizational operations whereby several steps need to be followed to gain a clear reflection of the intended impact. Epstein and Yuthas (2014) provide for a systematic approach to the resources needed and areas to be invested for the realization of the expected social impact concerning issues such as global warming and poverty.
Garriga, E., & Melé, D. (2004). Corporate social responsibility: Mapping the conceptual territory. Journal of Business Ethics, 53(2): 51-71.
This article approaches the issue of CSR from the theoretical point of view. Four dimensions of comprehending CSR emerge whereby profits, social demands, political performance, and ethical issues act as the underlying factors. According to Garriga and Melé (2004), instrumental theories portray the wealth creation strategies that corporations use in the name of CSR. Political theories identify the power relations and between governments and corporate entities through environmental and social development initiatives. The integrative and ethical principles are accounted for the satisfaction of social needs and moral responsibilities of corporations. A recommendation for the integration of the four dimensions is perceived to be the future of CSR.
Huniche, M., & Pedersen, E. (2006). Corporate Citizenship in Developing Countries: New Partnership Perspectives. Frederiksberg, Norway: Copenhagen Business School Press.
The promotion of corporate citizenship by donor organizations such as NGOs has been ongoing over the past decades specifically in developing economies. Strategic decisions aimed at enhancing commitment towards CSR encompass definition, support, responsibility, and programmatic approaches to CSR initiatives. In this regard, inter-organizational relationships prove to be significant for fostering corporate citizenship. This goal is achieved through partnership programs between businesses, the public, and government. Huniche and Pedersen (2006) argue that the move towards environmental friendly programs and investment support programs is also perceived as a bold strategy towards the development of CSR. This source is relevant to CSR since it provides information about the strategic moves that facilitate the development of CSR programs in developing economies.
Kerlin, J. (2009). Social Enterprise: A Global Comparison. Hanover, Germany: UPNE.
Social issues in the modern world have become a factor for consideration if businesses aim at succeeding. According to Kerlin (2009), the emergence of social enterprises has been common in the contemporary business world, as diversification towards empowerment of communities is preferred to profit accumulation. The book provides a history of the development of social entrepreneurship concerning policies and challenges faced in various regions. The different models of social entrepreneurship are insightful in the understanding of CSR as different social aspects are covered. In this regard, the firmness and fragility of different models have been analyzed for essential action towards the environment and social responsibility of businesses.
Kotler, P., & Lee, N. (2004). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. Hoboken, NJ: Wiley.
Kotler and Lee (2004) approach the theme of corporate social responsibility from the public relations point of view. The two authors emphasize the need for corporations to engage in charitable projects in a bid to improve the well-being of the public. Fields such as education, healthcare, and environmental sustainability have been addressed by the two authors who point out good leadership as essential for the implementation of CSR. The workforce within an organization needs to be sensitized for the actualization of CS in the society in which an organization operates. In this light, charitable initiatives are crucial to both the organization and the community, hence creating an exemplary image essential for business success.
Louche, C., Idowu, S., & Filho, W. (2010). Innovative CSR: From Risk Management to Value Creation. South Yorkshire, UK: Greenleaf Publishing.
The aim of this book is to portray the impacts of CSR in relation to innovative approaches. A link between CSR and strategy is necessary for its success since a framework is provided for guidance. Louche, Idowu, and Filho (2010) posit that the regulatory conditions are also taken into consideration for purposes of ensuring business ethics. The notion that CSR adds value to an enterprise organization tends to initiate for creative an innovative strategies aimed at giving back to the society. The book is helpful since it illustrates how technological advancements can be applied in CSR.
Lozano, J., Albareda, L., & Ysa, T. (2008). Governments and corporate social responsibility: public policies beyond regulation and voluntary compliance. New York, NY: Palgrave Macmillan.
The role of government policies on the issue of CSR is put into perspective in this book. An analysis of public policies regarding CSR endeavors in the European Union. The socio-economic context has been used to evaluate the relationships among the various stakeholders in CSR, including the government, civil society, and businesses. According to Lozano, Albareda, and Ysa (2008), companies are encouraged to invest in less-favored areas in a bid to curb marginalization of poor communities hence complements developmental projects initiated by governments. Therefore, healthy relationships amongst the various stakeholders are paramount for the empowerment of marginalized communities.
Mullerat, R. (2010). International Corporate Social Responsibility: The Role of Corporations in the Economic Order of the 21st Century. London, UK: Kluwer Law International. Mullerat (2010) approaches the practice of CSR from the law firms perspective. He argues that institutions of law have to be updated on the new approaches to CSR trends. The multinational initiatives put in place by international organizations such as the ICC and UN need to be covered by law institutions regarding CSR codes and expectations. CSR legislations are industry specific as each organization is expected to contribute to environmental and social responsibility in a particular manner. Private organizations too have an obligation to come up with initiatives aimed at conserving the environment and improve social conditions in general. Therefore, the book provides an in-depth analysis of the legal aspects of CSR
Murray, M., & Dainty, A. (2013). Corporate Social Responsibility in the Construction Industry. New York, NY: Routledge.
Murray and Dainty (2013) look into the environmental and social implication of the construction industry in the South African context. Therefore, there is a necessity for corporations to shift from the traditional approaches of economic and environmental sustainability towards embracing Corporate Responsibility principles. Since South Africa is a middle-income developing country with vast resources, the construction industry that accounts for most development projects, is thus required to observe CSR principles. The essence of this book is that it focuses on a particular industry, which is responsible for a substantial percentage of development activities in most economies, since its implications have greater environmental and social impacts.
Okpara, J., & Odiwo, S. (2013). Corporate Social Responsibility: Challenges, Opportunities and Strategies for 21st Century Leaders. Medford, MA: Springer Science & Business Media.
Okpara and Odiwo (2013) argue that it is essential for corporates to uphold good citizenship attributes if economies in the 21st century aim at promoting socio-economic development. The cause of the company and what works best for it is significant for strategizing on its CSR moves. This aspect could entail the incorporation of the enterprise messages in projects it funds a marketing strategy and create more opportunities. The integration of new strategies into existing systems tends to pose a threat to successful implementation of CSR plans. The role of leaders becomes vital for the identification of opportunities and dealing w
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