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Concept of corporate social responsi
Concept of corporate social responsi
Corporate social responsibility theoretical frameworks
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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?’.
Corporate Social Responsibility (CSR) is the way a corporation achieves a balance between its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. In general, when firms hold this wider encouraging role on the public by being engaged with stakeholders, a variety of profit can be produced for both company and the stakeholders. A key inclination is the combination of Corporate Social Responsibility (CSR) into the organization strategy, culture, mission and communications. By incorporating corporate citizenship into the company it is no longer an additional “nice thing to do” or something made to obey laws or regulations. Instead, corporate responsibility has become something business leaders and workforce want to engage in, frequently because executives who believe in the long-term see business profit. The four types of social responsibilities a...
Corporate Social Responsibility is the obligation from corporations to utilize their resources to aid and benefit the larger society. The four components of CSR are economic, legal, ethical, and philanthropic. Social Responsibility is a fundamental force in the wealth creation process. If correctly demonstrated, CSR should heighten competitiveness and boost the value of wealth creation to society. A company's CSR Initiatives directly represent who the company is and what it believes it. The m...
Perhaps Friedman’s most prevalent justification for dismissing social responsibility from business arises from his view on ethical spending. He believed that it was unethical for businessmen to spend other people’s (shareholders) money on other people (i.e. the community), and that transactions of such a nature should be left to government and corporate social responsibility programs. This line of thinking reinforced what is known today as the shareholder primacy model, whereby the primary moral duty of any corporation is to serve the shareholder’s interests, subject to some moral minimum (Smith, 2003). Friedman held that it was the shareholders money being spent, not the corporation 's, as corporations were merely fictional entities. Numerous
There is major concern for corporate management whether there is a direct relationship between corporate social responsibility and financial performance. There is need for assessing the validity of the relationship between CSR and financial performance .Macguire, sundgren and schneweels (1986) argued that previous research has yielded mixed results regarding the relationship between CSR and measures of financial performance. Reviews by Cochran and Wood (1984) and Ullman have all found mixed results regarding the relationship between CSR and a firm’s financial performance. Ullman suggested that the results may have been derived from differences in research methodologies and measures of financial performance
Walter, F. and Bruch, H. 2005. The keys to rethinking corporate philanthropy. MIT Sloan Management Review, 47 (1), pp. 49--55.
To expand complete structure of frame work for CSR, organisation must have concern its strategies as how it appears as a corporate citizen (Brook 2012, p. 495). It is important that employee, employer and stakeholders to accomplish domestic and foreign pressure. It is organisations responsibility to maintain customer and subordinates confidentiality and CSR operations. Ferguson & Williams (2015) reported that NAB violated its CSR by faking some customer’s signatures and provided false or poor financial
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.
Milton Friedman presents a compelling argument in “The Social Responsibility of Business is to Increase Profits” by arguing that businesses need to focus only on increasing their profits and integrating social responsibility will only hurt them as a company. Since “only people can have responsibilities” (Friedman 52), Friedman argues that businesses as a whole do not have any type of real responsibilities because there is not a singular person for these responsibilities to fall on. Corporate executives are people as well and may feel they have social responsibilities to society but these “are the social responsibilities of individuals, not of business” (51). In terms of corporations, the businessmen are the ones that hold the responsibility of the company. Friedman argues that the only responsibility these managers hold is to those who own the corporation, the shareholders. If the individuals themselves want to contribute to social responsibility they must do it with their own money in their personal lives, but they should not use social responsibility in
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
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.
Covey & Brown (2001) “the role of business in society has progressed over the years, from being primarily concerned with profit for sharehold¬ers to a stakeholder and community approach with a focus on corporate social responsibility”
Ethics and Corporate Social Responsibility(CSR) is one of the issues that society concerns about and expect organisation to perform. Society are more concern on Corporate Social Responsibility nowadays, and according to “Iron law of Responsibility”, those who do not use the power in ways that society considers responsible will tend to lose it at last. However, there are some issues will arise when the company performing CSR. Throughout our research, there are some significant issues that encountered by Petronas Chemicals Group Berhad.
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.,...
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...