Corporate Social Responsibility and Sustainability - Literature review Example

Corporate Social Responsibility and Sustainability Introduction Advanced technology and expanding business trends have totally changed the world, corporations in the world are looking for completely new style of business which can make them grow and rule the corporate sector so in this competition of winning the game and ruling the corporate world has made things very different for generation making business grow through different new ideas and practices and generation which is yet to come and enjoy the advancement of technology and ruling corporate world. New generation will see not only better business world but the outcomes of using resources and damaging environment. Corporate social responsibility and sustainability is a concept to understand and work positively and encourage employees, give good impact to communities and consumers, save environment by keeping ethics and laws main priority in business. .Origin of the basic concept of corporate social responsibility can be traced back in 1930s by 9 businessmen who thought of mixing business with ethics and social responsibility to make society better in every possible way. Modern comeback of the concept of sustainable development started in UN conference on Environment and Development in 1992 and 2002World Summit on Sustainable Development renewed the concept of corporate social responsibility. 2. Literature Review To conduct any research work it is necessary to review the literature of the past theories. The literature review provides us information about the work done in the specific area with theoretical framework on which the suggested solution of the problem can be built. The literature on the problem is somewhat dispersed from different sources to get a better understanding of the problem under study. A brief review of the literature is given below as: Alessia D’Amato in his study says that complex issue of sustainability in societal and business areas is possible by protecting the environment, competing fairly, equality in opportunities for all and interdependence of organization and societies. If balance in all these can be managed then sustainability is not a major issue. George Pohle and Jeff Hittner in a recently published article by IBM says that companies were taking CSR as a narrow way to the growth path but recently companies have realized the sustainable growth patterns and they are quite clear about CSR so shifting their thinking about what being socially and environmentally responsibility can give. Large number of companies are taking CSR as their main focus to get into better growth way and make a difference in the corporate sector. Jean Hugé& Tom Waas(2011) pointed out a very major way to implement CSR in corporate sector andthat is sustainable marketing beyond classical marketing ways, Devooght in: De Prins et al. (2009) described basic characteristics of corporate social responsibility and these characteristics are voluntariness, creation of value, plural objectives, respect for man plus nature and responsibility. Sustainable marketing leads to sustainable consumption which in a way is more responsive and enthusiastic for sustainable alternatives. It makes markets proactive in terms of reactive demand side which gives consumers information they require on sustainability of the goods they purchase. Public involvement in CSR ideally aligns public policy and business activities to reach the targeted goals. Zynia L. Rionda(July 2002) highlighted her publication that increasing number of companies are accepting thefact that in order to stay profitable, competitive, and relevant within this changing business community, they have to try to become socially approved and acceptable. Globalization has fainted national borders, and technologyhas shortened distances with all these changes from the corporate natural environment, companies need to change their strategies to manage the profits and risks, another point to worry is brand name which companies need to protect.Globalization has increased opposition for knowledgeable employees, traders, and consumer loyalty. This scenario calls for a big change in ways how company deals with communities, workers and market place can contribute to sustain business and success by just implementing CSR. Relph-Knight, L. (2006) focused on leadership and sustainability relationship in trade as changes in the leadership role can enhance the performance of the assumed life enhancing model of trading products so leadership can focus on the sustainability which can be of great help in business sector. Roome, N. &Wijen,F. (2006) pointed out another key point in implementing corporate social responsibility and sustainability, study says that stakeholders have great power in making an organization learn corporate environmental management . Porter and Kramer (2003) presented a summary of corporate philanthropy which is another core value of CSR which is the main focus of our research. New procedure for corporate philanthropy, one through which we give up on the advertising benefit but focus adopting the strategic approach that produces social change and economic worth. This is often achieved by just focusing on the competitive strategies which will not exclusively bring cultural and economic goals in placementbut also develop long-term enterprise scenario. It also improves company’s own features and relationships. Philip kotler and Nancy Lee(2005) in Corporate Social Responsibility (Doing the Most Good for Your Company and Your Cause) mentioned major six steps which a company can take to be in the list of corporations implementing CSR. Marketing department can apply much of strategies which can fall in the category of social cause and these strategies can be socially responsible practices volunteered by employees and some time top management .Choosing best potential social issues which can be dealt by corporation, doing a campaign alongside the business marketing which can give social impact as well and this initiative can do most good for the social issue. Book gives a very influencial message that most for-profit organizations can do some good which can be for some cause if not all the time then for at least some time. Nathan E. Hurst(2004) studied corporate ethics, Government and social responsibility by comparing companies of USA and European business practices. Study shows that Europe gives labor protections and generous consumers involved in social and environmental actions but EU is controlled by government institutions and larger corporations and EU is motivated by business interest then political interest. Analysis done by AbiolaBarnor(2009)of famous corporations implies that ultimate goal of companies to be corporately responsible is not effected badly in recession, even with huge thinning budgets , task cuts and re-considering strategy . This may be the first worldwide recession in which that concept of corporate responsibility is part of the standard business language. Pruzan (2006) pointed in his study that implementing CSR in an organization through adding it into company’s policy, reporting system and stakeholders interactions. Leaders have huge responsibility of realizing what CSR means to the organization and how they can implement such policies which are backing sustainability and corporate social responsibility. Philippe Bronchain (2000) External concerns with CSR are significant and likely to get much attention, it is essential not to ignore the internal part. Time when economy isdecentralizedof social networking companies, problems of job top quality, health, safety and functioning conditions with the employees of corporation plays a very important role in CSR guidelines. Policies to perform safety to subcontractors, or conferences with the social rights organization can deal with the internal issues with CSR. Milton Friedman(1970) writes in his article which was published in New York Times, when businessmen take stand on social responsibilities of business in enterprise,They say that business is not worried with profits but promoting and working for society as well because business has social conscience. They say that social responsibilities are much taken care by businessmen by giving work to unemployed, implementing non discriminatory system,taking care of environmental damage which is caused by expanding business by destroying natural recourses, not adding into pollution but trying to eliminate pollution. All they are talking about is social conscience in business and social responsibility they know and take care of, it’sjust their benefit to get more profits out of this realization of social responsibility. Writer says business is purely business and social responsibility is just to get more and more profits. Martin R. L. (2003) Says that Corporate social responsibility has another aspect from which organizations are looking at it and that’s market pressure which gives birth to another tool which is “virtue matrix”. It helps organizations realize their social responsibility and socially try to sooth different issues and complex situations. Article published in The Economist on 17th January 2008 is a comprehensive study on International Brand Marks & Spencer theysayabout the CSR that it is a label every company wants to own, few years back M&S was not a pro- CSR but with time now that it is the most important way to compete with the multinational companies which are actively participating in social work and other good business ethics just to be in good books. Research on company’s stance on corporate social responsibility. M&S is helping 15,000 children in Uganda to basic education and be a part of CSR group. Doing good concept in corporate world is very much discussed either it’s the competition or its actual realization. Tracey Swift & Simon Zadek(2002) says in the article that financial wealth making is clearly a basic purpose behind of CSR strategy. Corporate responsibility should be kept with the procedure by which nations risk-free their economic competitiveness. Responsible business practices, designed and implemented with Government and civil society can help in molding economic competitive advantages. Lewicka-Stralecka (2006) wrote in article about opportunities and limitations of corporate social responsibility in countries which are in the phase of transformation. Business image in the corporate world is very important for companies which are based in the countries where a transformation is taking place, competition is tough with other countries and to maintain the job market situation and legal situation of company is also very crucial. Another aspect self regulation of business because of changing pattern of country and competition is also very important. Under-developed civil society and economic plus ethical standards are changing because of formations taking place in the country so CSR totally makes the country grow by focusing on the ethics and social responsibility. DimaJamali and MouniraJamjoom focused on positive aspects of CSR in the society, corporations which truly believe in social responsibility gives so much to the society. Environment friendly development also makes sure that generations yet to come will live in a safer environment. Authorities, civil culture organizations, as well as academic companies should all be concerned in this kind of effort.Companies need to realize their state in the worlds where they can do much more for betterment of the society. They can do this through corporate social responsibility (CSR) and canarrange country wide development aims in regions i.einexpensive housing, coaching women, as well as conserving water. LiisVeersalu(2011) highlighted a very good strategy of a company in regard to corporate social responsibility by dividing company’s CSR into two categories which one dimension is internal which handles human resource in a better way by solving every employees problems and facilitating them, environmental issues, dealing with resources, health and safety issues all are dealt very effectively. External dimension deals with social dealing, all the aspects of community, supplier and consumer, environmental concerns and human rights issues are considered in this dimension of CSR. Melsa Ararat stated in her article that CSR is the indicator which guarantees profit maximization and social welfare. Lopez & Rodriguez (2007) pointed out that business performance depends upon the practices under the corporate social responsibility.Meyerson (2001) article focuses on two ways of business changes through which are drastic action and evolutionary adaptation. Article explains different ways to tackle change and change the flow into positive outcome. Morsing&Nielsen (2008) main point of this study is that approval by stakeholders to be in the list of corporate social responsible organization. Porter, M. E., & Kramer, M. R. (2003) authors explained a concept in a wonderful way, approach to corporate philanthropy in which contributor discard their focus on the public relations advantage of giving in favor of accepting a strategic approach that generates social image and economic worth.Prahalad& Hammond (2003) focuses on serving poor people profitably and gives few better ways for modification of firms to implement CSR effectively.1) create enterprise groups and internal investment funds 2) Establish company development job forces 3) reach out to additional partners. 2.1. Issues From literature review we have gone through different corporation and their statistical data which shows that multinational companies of the world are planning social reporting in their next budget, US chocolate manufacturer are helping to prevent child labor by donating huge amount for this cause. Coca Cola is specifically paying attention towards AIDS education in Africa. Marks & Spencer just because of animal killing in India dropped taking leather form them so this humanistic approach by Giants of the world shows that corporate social responsibility is adopted by big organizations but main point here is that in literature there are writers saying that all this humanistic and social approach of business giants is to gain profit and to put their names in good books which shouldn’t be the case, every company should have the policy to follow CSR and business ethics so that it’s not a number game for anyone. Government’s role is not at all visible as no clear stance from Government side is yet taken. Through different conferences and platforms which work for social change is raising this issue but Government’s efforts can’t be seen. Another issue which most of the writers highlighted is investors are changing their assessment criteria of company’s effectiveness, and are making decisions on the basis of ethical concerns. Rule of law should be implemented on every organization so that this social responsibility is not just a cause but mandatory for all the organization and no one can be judged and miss judged on the basis of this criteria. Another prominent issue mentioned in literature is that Employees are more and more looking further than just paychecks and profit, and looking for employers whose philosophies and in service practices are equivalent their principles. To hire and retain skilled labor, companies are required to recover working environment. These are few issues which are cause of corporate social responsibility not working in every organization. 2.2. Methodological Issues The idea forcorporations to bear the responsibility of all the stakeholder is not new. This is a quite old phenomena, during 19th century many companies built special housing for their employees because they believed that an employeewhose living standards are good was more productive than one having poor living standards. In contrast to historical scenarios of Corporate Social Responsibility regime, there has been extensive amendment in this doctrine of CSR and in this global corporate sector when there is huge and tremendous competition all over, the race of survival is not only dependent on the efficiency and reliability of products and services of business but also on the social and environmental involvement of the business(Haynes & Dillard, 2013). Since for success of corporation a reputed brand is very much important, companies are building huge brands for making profits and surviving thiswar of brands. Brands are not just names of products but these carries all the personality traits just like a human being, people associate different characteristic with brands and only those brands wins which are best in each and every aspect and that includes social responsibility as well, for this purpose companies are trying to create their ethical and socially responsible image in their consumer’s minds so that people would prefer their brand by creating a noble ethical brand positioning in the minds(Mcbarnet, et al., 2007). These changing dimensions provide clear signs of shifting CSR paradigm from basic provision to sustainable growth. These changing developments have brought all dimensions of workplace, environment, sustainability, benefits and protection under one domain(Crowther & Rayman-Bacchus, 2004). Beyond the corporate world governments are also taking part in the CSR(Gottschalk, 2011). Just like in Britain the government has pass in Companies Act 2006 that all companies should on social and averment issues and United Nations is promoting CSR through a program called the global compact(Barth & Wolff, 2009). Business schools are also adding special courses to their MBA programs in CSR. Companies are working hard to maintain their reputation by looking at social issues, this is not because all of them are concerned about the global issues and humanity because they have to maintain their brand reputation and their market share(Anderson, 1989). There are many NGO which are ready to take actions again any unethical step by organizations and start the battle so in order to maintain their market and attract the investors and shareholders companies have to improve their financial and non-financialperformance(Madu & Kuei, 2012). CSR has moved to a next level now giving away heavy amount of checks to governments is not enough, the investors these days need to know that their money is actually spend on good work or not or else they would move to the companies which are actually doing some good social work on ground realities(Organisation for Economic Cooperation and Development, 2001). Companies are now moving towards going green saving the environment for future is the most burning question these days for the companies are being rated by the regulatory organization on being environment friendlyactivities, saving the sources of energy and using green energyinstead(Lister, 2011).Companies are investing heavy on such project which will earn them great profits in coming future and build their future brand image because building brand image is all about this CSR war. 3. Research Methodology 3.1. Nature of the Study This research is purely qualitative in nature in which the ultimate target was to attain analytical analysis of corporate social responsibility on its sustainability. In this regard number of articles and literature have been explored to appraise shifting paradigms from rhetoric CSR to sustainable CSR. 3.2. Sample Design Population under this study are the corporate and marketing firms of the whole world while literature has most primarily focused on multinational corporations of United States of America and Europe as sample. In response to these sample corporations, this study has also evaluated literature on government and regulatory stances too. In USA and EU, there have been found many professional and legislative developments at corporation and at governmental level too whereas this study has examined both aspects in detail. After conducting in depth analysis of the sample researches and literature, this paper also provides some analytical insights on methodological and theoretical issues of corporate social responsibility. 4. Suggestions for adaptations of CSR Corporate Social Responsibility entails accountability and responsibility to investors, shareholders and stakeholders which is essential for business and environmental growth hence it is highly recommended for future progress. CSR binds corporations to societies and portrays their intent other than economic entities. Adaptation of CSR is suggested due to its benefits either for company or public or for environment. These benefits cover a wide range such as improved performance, low operating costs, higher sales, employee retention, workforce diversity, safety, quality, corporate involvement in education and employers higher standard lifestyle, greater environment protection, environmental management, recyclability and enhance use of renewable energy etc. These benefits demand adaptation of CSR doctrine at every level of the business especially for marketing and sales. 5. Conclusion In Literature, there is rapid increase in the need to run business by building a better relationship between work and society. Society is a part of the world where we live and work so separating both cannot work out and there’s a need to build a better bridge between society and corporate sector. Leaders of the top companies of the world who are dealing in multi billions and are giants of business world are responsible for their corporations’ impact on the society where we live. Environment where we live is getting worst because we are not making efforts to improve the surrounding so corporation have this responsibility. New approach towards sustainability and development needs to present in order to develop sustainably. Our future generations are yet to see much more development and growth so for them and for better tomorrow sustainable development procedure is a must to be defined. CSR is basically a commitment for the improvement of community well-being and practices which can contribute towards corporate recourses. CSR is a growing principle of the major entrepreneurs and corporations so need is to make it principle of every small and top organization. The very idea of company corporate social responsibility is now tightly rooted for the global company goal. Yet so as to shift by principle for you to concrete floor activity, several obstructions have to be triumph over. 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