Essay On History And Development Of CSR

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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?’.

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