CSR Philosophies, Essay Example

The research objectives and theoretical framework outlined in the previous chapter suggest that the literature relevant to this thesis concerns:

1. studies/papers on historical CSR
2. studies/papers on CSR concepts and ideas
3. studies/papers on CSR motivation
4. studies/papers on CSR communication strategies
5. studies/papers on cultural influences on CSR

More specifically, as this study will focus on differences and similarities of historical and modern CSR activities of steel companies in Anglo-Saxon and Germanic countries, the literature review will be structured according to findings relevant to England and Germany as far as possible.

However, in reviewing this literature it should be stressed that very few (if any) previous studies have compared historical and modern CSR activities in both countries. Consequently, this thesis seeks to make a major contribution to the existing literature in terms of revealing the development of CSR from the Industrial Revolution in the 19^th century to the times of today´s globalisation.

This chapter proceeds as follows. Studies and other sources relating to the significant areas and characteristics of CSR – history, concepts and ideas, motivation, communicating strategies, and cultural influences – are reviewed in sections 1,2,3,4, and 5 respectively. The concluding section 6 summarises the main points arising in the literature review that are relevant to the objectives of this study.

Historical CSR

There have been a small number of studies on historical CSR in England and Germany. These studies are outlined in Table 1.

Table 1: References related to historical CSR

Brief Summary

According to Argandona and von Weltzien Hoivik (2009), CSR is an ethical construct, and requirements for socially responsible conduct within the business world have their roots in the Industrial era. Within Europe, the idea of CSR has continued to evolve over time based on cultural, social and political factors. Therefore, a precise definition of CSR is difficult to determine. This is somewhat confusing for business academics, and serves as an example of a key weakness in the measurement and evaluation of corporate social responsibility in the research realm.

Tradition has delineated three components of responsibility, including economic, social, and environmental. This delineation has primarily been for practical purposes and helps organizational management segregate work and information. However, this does not reflect all the facets of CSR. Agandon and von Weltzien (2009) conclude that there are a number of useful definitions of corporate social responsibility, although one unique definition continues to elude researchers and professionals. As a result, CSR reflects the overall nature of a firm and its respective role in society and with its stakeholders. The ultimate reasons to be responsible, however, should not be for external results, but due to intrinsic moral factors that guide people within the organization.

CSR concepts and ideas

There have been a huge number of studies and other sources on CSR philosophies, ideas and concepts from the early 1950s up to now. The table below outlines some of the most significant references dated 1953 to 2008.

Table 2: References related to CSR philosophies

Brief Summary

Since its original concept in the 1950s, CSR has evolved greatly over time. Early research on corporate social responsibility is solely theoretical in nature and lacks empirical evidence. Much of the early work on CSR focuses on defining the term, as well as its multiple levels and constructs. Interestingly, one early theorist, Friedman, strongly objected to CSR because he felt this was a move against the free trade strategy that regulated the business world. His views were quickly refuted by subsequent theorists who felt is was an industrial firm’s obligation to adapt to the social and environmental needs of its local population. Later research focused on methods to improve CSR, and some recent studies have investigated the relationship between CSR and profitability. In fact, Prior, Surocca, and Tribo (2008) found a positive correlation between factors that defined CSR and several measurements of profitability.

CSR motivation

Table 3: References related to CSR motivation

Brief Summary

Both individual and corporate motivation may play a role in the implementation of CSR practices. Research has indicated that individuals who are motivated by egoistic concerns and individual values are also more likely to make purchases in support of CSR factors. Furthermore, most firms share a positive view of CSR and are motivated to engage in CSR practices for multiple reasons. As prior research has indicated that a strong correlation exists between CSR and profitability, individuals within the firm, as well as stakeholders, are more motivated to maintain a relationship with a particular firm if it practices effective CSR practices.

CSR communication strategies

Table 5: References related to CSR communication

Brief Summary

Communication is essential to informing government and the public regarding CSR initiatives. Research has demonstrated that older models of communication with respect to CSR have consisted of strictly informational and responsive models. Communications that emphasize involving stakeholders regarding corporate social responsibility initiatives can help reduce perceived hypocrisy – a state that severely damages an industrial firm’s reputation and profitability. Consumers’ attitudes are largely based on a firm’s communication strategies, so effective involvement in the communication process and proactive methods of providing information can help reduce misperceptions and increase profitability. Among the many methods that can enhance the communication process is the Internet. Because of the large volumes of information needed to relay corporate social responsibility initiatives, the Internet serves as an adequate platform to ensure consistency and accuracy. Some disparity may exist, however, between the volume if information and its dispersion when using the Internet. Furthermore, communication tends to be unidirectional and fails to accomplish the goals of involving stakeholders in the communication process with this strategy. External criteria are also needed on top of web-based communication strategies to ensure the appropriate message is delivered.

Cultural influences on CSR

Table 6: References related to cultural influences on CSR

Brief Summary

Cultural influences play a large role in defining CSR across the globe. Beyond just the industrialized firms of Europe, CSR has important underpinnings in African and other undeveloped economies. Cultural dimensions of institutional collectivism in these underdeveloped economies are in stark contrast to the individualism of Western Europe. Such cultural dimensions can be used to help predict social responsibility values in top management team members. However, the changing definition of CSR makes it difficult to research this subject. Industrial academics must continue to critically evaluate and analyze multiple perspectives of CSR and take into account the broad worldwide scope of this construct. The increasing body of research that has emerged in recent years has helped combine multiple social and cultural factors defining CSR.

Summary of relevant points from the literature review

CSR refers to a form of regulate that firms incorporate into their business models. This construct helps firms comply with social, political, and environmental standards with respect to the local economy. The primary aim of CSR is to produce a positive impact on the surrounding government and populous through its business practices. Most industrial firms maintain corporate social responsibility policies in their mission statements.

Multiple approaches exist for defining and practicing corporate social responsibility. Dominant in Europe and Canada are Anglo-Saxon approaches, which utilize very heterogeneous policy standards. Philanthropic approaches are more common throughout the rest of the world. Many organizations disregard philanthropic approaches, however, because the donation of money to charities does not help build skills necessary to promote a self-sufficient economy.

Businesses must practice effective accounting standards to ensure corporate social responsibility is met and appeases the stakeholders. Communication is essential in this process, and allows for the thorough auditing and reporting of such CSR aims. Guidelines exist throughout Europe to ensure policy is met, which include ethical and financial standards.

Research has demonstrated that CSR is associated with a number of benefits beyond just profitability. Such benefits include human resources, risk management practices, and brand differentiation. These benefits vary depending on the nature of the organization and such benefits are often difficult to measure.

A growing interest in motivational theories of CSR has led to an increasing body of literature in this regard. Both individual and corporate factors may influence motivation to engage in CSR practices. Much of the research related to CSR motivation relates to consumer behaviors and the desire to purchase products from a company based on its CSR efforts. The research is somewhat equivocal in this regard, although tends to favor CSR practices over not engaging in standard CSR policy.

Some critics of CSR argue that the purpose of a business is not to serve the public, but to maintain a profit. The implementation of CSR standards may result in questionable motives and practices with respect to implementing public programs and charities. Furthermore, an emerging concept in the business world, known as ethical consumerism, suggests that the rise in global population places pressure on businesses to meet environmental policies and consumers on this factor largely make decisions alone. Although most researchers agree that the increased social awareness and education surrounding the impact of the industrial economy’s practice on the environment, CSR may not be good for the industry as a whole.