Chapter 2: Literature Review History and Development of CSR According to Lee (2008), there have been two main trends of the concept of CSR over the decades. First, researchers have moved from ‘discussing the macro social effects of CSR to organisational-level analysis’ whereby the effect of CSR on financial performance and profit is discussed. Secondly, researchers have moved from ‘explicitly normative and ethics oriented studies, to implicitly normative and performance-oriented managerial studies’. Before the 1950s, the very concept of CSR was looked down on, as it was an obscure and general concept that vaguely framed in moral terms. Companies were unable to see the benefits CSR would bring to the business, as financial gain was simply seen as not possible. Many academics such as Carroll and Preston refer to Howard Bowen’s Social Responsibilities of the Businessman (1953) as a starting point of attempting to formulate a relationship between corporations and society. Bowen defined CSR as ‘the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.’ From a normative perspective, he provided an explanation, institutionally oriented, as to why business managers are growing concerned with social responsibility. However in 1962, Milton Friedman provided a classical economic viewpoint argument against the idea of CSR. According to Friedman, ‘there has been the claim that business should contribute to support charitable activities and especially to universities. Such giving by corporations is an inappropriate use of corporate funds in a free-enterprise society.’ He believes that conducting socially ... ... middle of paper ... ... follow the latest trends and also a commitment to ‘Wawasan 2020’; a Vision that calls for the nation to achieve a self-sufficient industrialised nation by the year 2020. Haniffa and Cooke (2002) found that on corporate governance structure, companies with more family members on the board disclosed less. Sumiani et al. (2007) found that companies with ISO 14000 certification tend to make some form of disclosure. It may also be important to consider Islamic Finance as a possible driver of CSR as Islamic Finance is being practiced in the country. As research on CSR disclosure is relatively recent, there is still a gap in the literature regarding the banking industry’s disclosure in Malaysia. This study should help fill the gap to examine the disclosure of CSR of the banking industry, whilst attempting to answer the research question ‘What are the drivers of CSR?’.
Corporate social responsibility (CSR) is a when a firm goes beyond compliance and engages in “actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (McWilliams, Siegel & Wright, 2006)...
Walter, F. and Bruch, H. 2005. The keys to rethinking corporate philanthropy. MIT Sloan Management Review, 47 (1), pp. 49--55.
Studies done by various researchers and scholars on corporate social responsibility impact on financial performance reveal mixed results with others citing a negative, positive neutral impact of CSR on financial performance of firms. Mwangi (2011) studied the relationship between CSR and financial performance of companies quoted at NSE. The results of the analysis conclude that there was an upward trend in performance of listed firms on the NSE as well as an upward trend in the amount of money investment in corporate social practices. This leaves managers with critical decisions to make especially on how much does a firm need to invest in CSR without compromising the returns of stakeholders more so the shareholders and whether investment in CSR has any impact at all on the financial performance of the firm.(Abagail & Donald ,
Davis (1960) assert that concept of CSR is important because businesses are based on trust and foresight. This trust with customers, communities and regulators is not simple and to be successful in long run, a company needs to think beyond what is affecting them today. Thus it is necessary to address changes to technology or the needs of customers taking into account alterations in social, environmental and governance issues (Holme 2010). This essay has made an attempt to explore the role a...
Corporate social responsibility is globally defined as operating a business in a way that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. The concern of CSR has drastically increased over the last two decades. It has enhanced interactions between governments, businesses, society and internationally. In the past, businesses primarily focus themselves with the economic results of their decisions. Now, businesses must also reflect on the legal, ethical, moral and social consequences of their decisions. Corporate Social Responsibility is no longer defined by how much money a company contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives.
The role of CSR has become dramatically increased over a number of years due to an influx of social awareness by the general pubic and also by government. The demand for more ethical business processes and actions, known as ethicism, is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws. The recent trend has seen an increase in the number of CSR reports being submitted from 2002 – 2005. In 2005 52% of G250 and 22% of N100 companies issued reports.[1]
“Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (Holme and Watts (2000) p.8). For many years business have cared solely on money however in recent years businesses have started to take interest in CSR and helping society welfare. This paper will discuss if Corporate Social Responsibility is likely to become a game changer in the near future.
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
In conclusion, theories and practices in CSR reporting are multi-faceted while systems perspectives embodied in the assumptions are acknowledged through political economy dynamics. The research in corporate social disclosure utilizes legitimacy goals and questions the viability and ethical nature of the process. The critique is an outcome of the application of CSR principles through the assumption that organizations perceive threats to their legitimate status. In the development and broadening of the CSR scope and disclosure expectations, firms introduce comprehensive forms of corporate social reporting. In such a case, issues of voluntary corporate social reporting are exercised as accountability responses to stakeholders and part of a legitimating process.
The classical view of CSR is a prominent ideology which business organizations are seen merely as profit-driven organizations. Simply put, businesses work for the sole purpose of making a profit. Thus, this profit motive is the sufficient and unique social identifier that separates a business organization from other institutions in society. These business organizations have a limited, yet essential role in society. Social concerns are considered important, but businesses, in the classical view, are focused solely on the economic activities and are judged accordingly. By having a limited role in society (i.e.,...
McWilliams and Siegel (2001) define CSR as, “actions that appear to further some social good, beyond the interests of the firm and that which is required by law.” (p. 117) Corporate social responsibility is considered both strategic, in that it yields a firm benefits, and non-strategic, in that it encompasses an observed behavior (Burke and Logsdon 1996). There is also a perception that CSR encompasses a zero-sum trade-off with the economic interests of the business. It is somewhat accepted that accepting CSR strategies will be a more long-term payoff, while entailing short-term costs, leading modern businesses to abandon it in order to appease the interests of shareholders.
A corporations CSR should be shaped in order to fit the goals of the corporation, although every corporation’s CSR should differ, since most have different goals and different communities behind them. The CSR should be molded into fitting the corporation’s goals in order to make it easier on the corporation in giving back to the community while achieving its goals. For example, a corporation located in a desert wishes to be more efficient, by reducing water usage it is not only creating lower costs, which result in higher revenue, but also helps the community by not taking up so much water. Taking this into consideration, it is critical that the corporation goals and values are established and clear throughout the corporation, they should be developed by the board or directors and CEO, and the highest managerial level should stress their importance to the rest of the corporation. By making the goals and values at the top branch of the corporate hierarchy, it will be simpler for the corporates community to develop in order to nurture those goals and values. Therefore, a corporation can reach the “shared-value,” a value for both its shareholders and community in a simpler manner that can result benefiting the corporation in the end as well. Throughout the article many examples are given of actual corporations that have benefited and changed their CSR in order to fit their goals, therefore, providing solid proof that these methods work. Nevertheless, as acknowledged by the author’s themselves, most of the corporations taken into consideration where one’s that Harvard CSR students were employed
The examination has given an incredible understanding into the changing part of CSR, and how firms ought to approach this moderately new idea. We realize that associations are turning out to be more open in their operations, and that customers are presently turning out to be more taught and investigating the organization itself when settling on obtaining choices. We realize that shareholders don 't have faith in CSR unless it gives more noteworthy business sector introduction, then again we have confirm that backings advantages which far exceed this presentation and give the organizations more prominent brand value and respectability. We have considered the lawful point of view and realize that whilst there are authoritative confinements on
I begin this essay by defining CSR, there are many definitions for this term by various different theorists, and EU says that CSR is "A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis." On the other hand, Sloman et al. define it as "The concept in which a firm takes into account is the interests and concerns of a community rather than just its shareholder". Davis and Blomstrom (1966), say it "Refers to a person’s obligation to consider the effects of his decisions and actions on the whole social system". These definitions differ from one another in many ways but they agree that CSR involves taking the environment into account and therefore, one must look take social responsibility.
Now-a-days it is considered that CSR is one of the major concerns of organization’s business ethics. Companies increasingly increase their corporate social responsibility (CSR) and ethical management accepting the positive impact on the bottom line. The vast bulk of Standard & Poor’s 500 companies publish sustainability reports unfolding their program challenges and achievements. These pre-emptive efforts can pr...