Evaluation of Corporate Social Responsibility in Saudi Telecommunication Company - Literature review Example

?Evaluation of Corporate Social Responsibility and the Risks of being non-CSR Entity (A Saudi Telecommunication Company case study) Literature ReviewCorporate Social Responsibility The expansive literature on the topic of CSR comprises various definitions and explanations of the construct. For instance, the European Commission (2010) defines the concept of corporate governance as “A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis.” In addition to that, a generally understood and applied definition in the management literature is expounded by Davis (1973, p.312) by defining CSR as “ the firm’s considerations of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm to accomplish social and environmental benefits along with the traditional economic gains which the firm seeks.” Moreover, there are other terms similar to the construct of the CSR including “corporate sustainability”, which focuses on long-run shareholder value by including principles particularly in nine other areas: governance, ethics, transparency, financial return, business relationships, community involvement, employment practices, environmental protection and product value (Epstein 2008). As a result, the activities attached with the concept of corporate sustainability remain largely analogous to the basic contents of the CSR. The CSR is an amalgamation of a number of corporate activities focusing on the welfare of stakeholder groups other than investors, such as suppliers, employees, charitable and community organizations and customers. One significant segment of CSR activities consists of corporate donations or contributions of products or cash to community and charitable organizations. For instance, Whirlpool Corporation (2010) arranged and donated a refrigerator to every home built by the Habitat for Humanity particularly in the affected areas of North America. Moreover, employees are also significant stakeholders for the companies. Companies carry out certain employee welfare related initiatives on a voluntary basis. Employee welfare includes initiatives from the facility of educational advantages to health care issues including providing them on site health clinics, wellness classes, fitness centres focusing on the issues such as work related stress management. Workplace safety has also become a critically significant factor of employee welfare; many companies have developed and established codes of conduct for employee safety and welfare and to their suppliers as well. Companies’ CSR activities also emphasis on meeting and fulfilling customer desires including protecting future generations. They intend to develop and sell such innovative products and services that appeal to customers’ environmental concerns via diminishing harmful product packaging and making it more durable and sustainable as well. Other CSR activities encompass “green” development and production practices and services, such as reducing emissions, conserving energy, reducing packaging materials, employing recycled materials, and sourcing materials from the suppliers located close to manufacturing installations. In this regard, Sony (2010) manages the harmful impacts of its greenhouse gas emissions by installing for carbon dioxide emissions from shipping, production, storage and other product use activities. Furthermore, companies often get involved with customers and vendors in their efforts to reduce their footprint and increase their environmental efforts. In this regard, Wal-Mart (2006) developed and announced a program measuring suppliers on their ability to diminish packing; and along with a goal of reducing up to 5 percent of total packing during the period 2008 to 2013. Why do firms involve in CSR activities? There remain various reasons underlying organization’s inclinations to get involved in socially responsible endeavours. First, organizations may prefer to remain altruistic and intend to fulfil their altruistic intentions. They simply subscribe to the notion that CSR endeavours have become part and parcel of being a good and responsible global citizen (Sprinkle and Mains 2010). However, it remains substantially challenging to disentangle such socially driven commercial objectives with the intentions from profit-seeking intentions. In this regard, for example, SC Johnson, Gap Inc., and Target largely highlight on their websites that CSR along with sustainability endeavours are simply the right thing to do. Similarly, after the events of 9/11, Honda, Procter & Gamble and Wal-Mart showed its social behaviour by donating millions of dollars in products and cash to the relief efforts; however, they decided not to make the amount of contribution public (Alsop 2002). Second, “window dressing” may be carried out with the use of CSR activities. The main intention behind this kind of act could be to appease various critical stakeholder groups’ particularly nongovernmental organizations (NGOs). Within the context of this view, CSR may be simply considered as another cost of conducting business. More specifically, it is something that firms contemplate that they have to conduct with an ultimate intention of avoiding or facing the impacts or ramifications of the negative publicity and other collateral actions from the NGOs. Moreover, along with incurring costs for CSR related activities, it has been highlighted that firms such as General Electric often forced by NGOs into incurring even supplementary costs to develop and report on their sustainability endeavours (Murray 2005) and such reports contain nothing but to token attempt to satisfy the superficial objectives of the NGOs. In addition to that, British Petroleum obtained higher percentage of marks for consistently maintaining its reporting on the safety and other related issue during a period in which a group of individuals contended that its practical safety enforcement procedures and actions was substantially questionable and largely poor, and this claim can be authenticated by the explosion of a refinery in Texas that brought deaths of various employees and injured others (Jackson 2007; Vogel 2007). in practice, some critical observers have opined that CSR is a con job and is a neat trick employed by NGOs as old-fashioned blackmail (Albrechtsen 200) and Porter and Kramer (2006, p.80) state that “ heightened corporate attention to CSR has not been entirely voluntary and the most common corporate response has been neither strategic nor operational but cosmetic.” Third, certain firms believe that CSR helps motivate, recruit, and ensure long term retention of employees . Various sources authenticate the presence of this claim and obtained benefits by the companies. for instance, Deloitte Touche Tohmatsu facilitates its managers the opportunity to get involved and participate in year-long programs developed to enhance and improving the abilities and skills of young and aspiring students; the company has nurtured an approach that this endeavour will facilitate to recruiting top and best performing candidates and would increase retention rates of highly potential and capable employees (Dizik 2009). Benefits from CSR Activities First, the tax deductions provided by product and cash donations, local, federal and state agencies routinely cater tax credits for sustainability and CSR efforts. For instance, RBC Bearings received $ 8.3 million in federal tax credits attached with development and production of wind turbines. In the similar direction companies can avail tax credits for employing or dealing with “green” practices and materials in the construction and renovation of buildings and other related practices. More specifically, by obtaining Leadership in Energy and Environmental Design (LEED) certification, a firm can become in a position to expect and require tax credits. Subsequent to that, additional tax incentives and offers may appear in the shape of sales-tax exemptions and property-tax withdrawal as well. Such types of credits and tax incentives are directly claimed and enjoyed by the companies and are substantially straightforward to calculate in an ex ante manner. Moreover, CSR brings free advertising and marketing of their names and products. It remains a quite common for firms’ good social endeavours to receive coverage and attention from national and local television and radio and at the same time they become able to secure its descriptions in trade journals, newspapers and magazines. Moreover, organizations comprehend what is cost to place advertisement in such expensive channels of media. By properly tracking media hits and tallying the costs attached with similar advertisements, firms might reasonably figure out the benefits of such type of publicity. CSR efforts may lead to cost savings and efficiencies as for as the value chain segment is concerned. In addition to employee motivational benefits in the shape of reduction in labour costs, there remain other segments of business operations such as sustainable practices bio mimicry, whereby design and development along with manufacturing efforts are motivated by nature. Risks of non-CSR Entity There are various authors highlight the risks and potential drawbacks of being commercial entity. In these days, media and information fastly travel and reach globally and many ordinary people fully understand the level of earnings and profits being earned by the national and international companies. As the companies publish their annual accounts along with the each year growing graphs of earnings and corporate profits, people and civil society members are convinced that the large national and international companies have become members of the society and they consider them as their members. In addition to that, the negative publicity and images, global warming, climate change, weather patterns and ozone layers are some of the burning issues that have convinced the civil societies and people that they are largely contributed by the commercial activities of the national and international corporations. As a result, if the corporations do not contribute socially or in environmental issues, the possibility of sales reduction and social or commercial boycott from the CSR-following companies may be unavoidable and they have to face the repercussions under any circumstances. Research Aim Assessing the Corporate Social Responsibility and the Risks of Being a Non-CSR Entity Research Objectives Comprehending the concept of corporate social responsibility and its different practices Evaluating potential advantages that could be achieved by being involved in CSR related practices Highlighting the impacts of being a Non-CSR entity Research Questions What is Corporate Social Responsibility? Why do firms engage in CSR related practices? What are the potential advantages of Corporate Social Responsibility? What happens if an entity does not involve in CSR related practices? Research Methodology Research is carried out conduct a detailed examination of a situation. A research activity is planned and carried out with the employment of conceptual framework along with the application of research philosophies, research approaches, data collection methods, validity and reliability, research ethics and research limitations. Research Philosophy A research philosophy is similar to regulatory framework determining practical applications of other angles and approaches of a research activity. A research philosophy provides an opportunity to a research to satisfy research aim and objectives. In this regard, both Phenomenology and Positivism are generally considered philosophical framework normally determined before practically conducting a research work. Easterby-Smith et al. (1991) describe both research philosophies and contend that they are markedly differing from one another. The fundamental underpinnings of Phenomenology consist of the firm approach that the world is socially attached and the considerably depends on the subjective understanding and subjective measures of the researchers, who use one’s own personal understanding to carry out research process. Aggregately, the supporters of Phenomenology contend that the researcher is part of the research process and must use his or her own understanding. This view is not agreement with the approach supported by the Positivism, which relies on the notion that the world is objective and external and the researcher must not use his or her own understanding while carrying out a research process. Rather, the supporters of Positivism opine that the researcher must employ facts and figures and support the subsequent outcomes with the use of facts and figures. In this research work, the researcher intends to use Phenomenology for various reasons. First, the research objectives would and could easily be satisfied with the use of this research philosophy. Second, the nature of research aim and research objectives remains largely subjective rather than objective and that can easily be entertained with the use of Phenomenology. Research Approach Both qualitative and quantitative research approaches markedly differ. The quantitative research approach supports the view and approach of the Positivism and the qualitative research approach are supported by Phenomenology. (Hoepfl 1997). Moreover, Charles (1995) opines that the numerical data is characterised and quantified with the employment of mathematical process, which is developed to employ the analysis process. Bogdon and Biklen (1998) contend that the quantitative research approach is only restricted to collect and focus on facts and figures. In contrast, the qualitative research method is employed to provide findings and conclusions with the use of any means other than statistical methods. By keeping this view in mind, the researcher has intended to employ the qualitative research approach to entertain the research objectives. Data Collection Methods Both primary and secondary data collection methods are employed to carry out a research activity to entertain research aim and objectives. The primary research or primary data collection method is employed to access firsthand information and the secondary data collection method is used to obtain the pre-existing information. In order to access firsthand information, a researcher is required to conduct a field work or meet with potential respondents with an aim of getting their free consent. For primary research, the researcher could employ telephonic interviews, emails, personal interviews survey, and observation and focus group interview and so on. In contrast, the secondary data can be availed by accessing to books, journals, online and offline newspapers, websites and other academic databases as well. In this work, the researcher intends to carry out a secondary research with an aim of entertaining the research objectives. As the research aim and research objectives can be entertained by employing the secondary data collection method, the researcher finds it reasonable to adopt the secondary data on a Saudi Telecommunication Company. Validity and Reliability Both components are highly essential. In this regard, Winter (2000) highlights that the validity is un-fixed concept and has remained a contingent construct in the entire research work. In contrast, the concept of reliability represents a process of measuring and obtaining the objectives of the repeatability including the use of accuracy. And only strong qualitative study extends the comprehension of research work (Eisner 1991). In this research work, the researcher intends to satisfy validity of the work by applying the secondary data. As the source of the secondary data has substantial importance and influence over the validity of the data, the researcher intends to use only valid and authentic sources such as Science Direct, Emerald Insight and so on. As a result, they would ensure reliability of the data provided in the work as well. Research Ethics Ethics may mean different things for different people (Butts and Rich 2005); and the limit or boundary of ethical violations is not easy to ascertain or prescribe (Munson 2002). In this paper, researcher has tried to avoid plagiarism by appropriately mentioning the source name and author name as well. Moreover, balanced analysis and avoiding conflict of interests remain also important. Research Limitations As the paper is based on the secondary data, the possibility of bias and or imbalanced analysis cannot be ruled out. In addition to that, there is also possibility of exaggeration inclusion as the researcher intends to include data and information maintained by the companies and the chances of exaggeration would be there. Timescale Task Duration Literature review 3 weeks Methodology 2 weeks Analysis – Stage 1 2 weeks Analysis – Stage 2 2 weeks Analysis – Stage 3 2 weeks Final Report write up 2  weeks Final Presentation write up 1 week References Albrechtsen, J. (2006). This business of moral coercion is just a hoax. The Australian, p. 12. Alsop, R. (2002). Perils of corporate philanthropy: Touting good works offends the public, but reticence is perceived as inaction. The Wall Street Journal, p. B1. Bogdan, R. C. & Biklen, S. K. (1998), “Qualitative research in education: An introduction to theory and methods.” (3rd ed.). Needham Heights. Allyn & Bacon, Massachusetts Butts, J.B., & Rich, K. (2005).Nursing Ethics: Across the Curriculum and into Practice. London: Jones and Bartlett Publishers Charles, C. M. (1995), Introduction to educational research (2nd ed.). Longman, San Diego Davis, K. (1973). The case for and against business assumption of social responsibilities. Academy of Management Journal, 16(2), 312—323. Dizik, A. (2009). Education for executives: Teaching the golden rules. The Wall Street Journal, p. B8. Easterby-Smith, M. Thrope, P. And Lowe, A. (1991) “Management Research: An Introduction”. Sage: London. Eisner, E. W. (1991). “The enlightened eye: Qualitative inquiry and the enhancement of educational practice”. Macmillan Publishing Company, New York Epstein, M. J. (2008). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers, San Francisco. European Commission. (2010). Corporate social responsibility (CSR). Retrieved 4 May 2012 from http://ec.europa.eu/enterprise/ policies/sustainable-business/corporate-social-responsibility/index_en.htm Jackson, T. (2007). Bang goes CSR. Financial Times, p.20. Hoepfl, M. C. (1997). Choosing qualitative research: A primer for technology education researchers, Journal of Technology Education, 9(1), 47-63 Retrieved 4 May, 2012, from http://scholar.lib.vt.edu/ejournals/JTE/v9n1/pdf/hoepfl.pdf Munson, C.E. (2002), Handbook of Clinical Social Work Supervision. Haworth Press, New York Murray, A. (2005, May 18). Will ‘social responsibility’ harm business? The Wall Street Journal Online. Retrieved 4 May 2012 from http://online.wsj.com/article/0,,SB111636707702036221-email,00.Html Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78—92. Sony. (2010). Reducing greenhouse gas emissions at sites. Retrieved 4 May 2012 from http://www.sony.net/SonyInfo/cs r/ environment/ climate/ghg/site/index.html Sprinkle, G.B., Maines, L.A. (2010), The benefits and costs of corporate social responsibility, Business Horizons 53, 445-453 Vogel, D. (2007, February 13). Good corp./bad corp. Los Angeles Times. Retrieved 4 May 2012 from http://articles.latimes.com/2007/ feb/13/opinion/oe-vogel13 Wal-Mart to reduce packaging. (2006, September 22). TheStreet.com. Retrieved 4 May 2012, from http://www.thestreet. com/newsanalysis/retail/10310727.htm Whirlpool Corporation. (2010). Habitat for Humanity. Retrieved 4 May 2012 from http://www.whirlpoolcorp.com/responsibility/building_communities/habitat_for_humanity.aspx Winter, G. (2000), A comparative discussion of the notion of validity in qualitative and quantitative research, The Qualitative Report, 4(3&4) from Retrieved 4 May, 2012, . Read More