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CSR Philosophies, Essay Example

Pages: 14

Words: 3951

Essay

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 19th 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

Study/
publication
Number of participants Methodology/
Methods
Findings Limitation
(Argandona & von Weltzien Hoivik 2009) n/a n/a Unique definitions for CSR unlikely

 

CSR is mainly an ethical concept

Comparing different models of CSR is neither possible nor desirable
Carroll (2008) n/a n/a Provides analysis of historical construct of CSR and its influential issues, including organizational behavior public management, and international business. Conceptual/theoretical. No empirical evidence.
Freeman & Liedtka (1991) n/a n/a Suggests reasons why concept of CSR should be abandoned and is not useful. Supports Friedman’s argument. Conceptual/theoretical. Contrary to common held views of CSR in modern business.
McWilliams, Siegel, & Wright (2006) n/a n/a Provides multiple perspectives on CSR and new framework for strategic implementation. Proposes agenda for new research. Conceptual/theoretical. Lacks empirical evidence.
Smith (2003) n/a n/a Differentiates between CSR for business and normative cases and makes case for CSR as profitable strategy. Fails to account for problems associated with implementation of some CSR strategies. Theoretical/conceptual in nature.
Vanhamme & Grobben (2009) 125 Dutch consumers Between-subjects experimental design regarding CSR involvement. Use of CSR claims in crisis situations is more effective for companies with long CSR history. Does not fully account for consumer scepticism. Self-selecting sample. Limited sample due to small CSR history in some companies.
Wood (1991) n/a n/a Defines CSR and reformulates CSR model to an integrative framework to guide future research. Redundant and somewhat outdated. Theoretical/conceptual and lacks empirical evidence.

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

Study/
publication
Number of participants Methodology/
Methods
Findings Limitation
(Friedman 1970) n/a n/a Friedman is one of the first to move against social responsibility. Claims CSR is counter to a free trade society. Not an empirical study. Solely theoretical in nature
Wartick & Cochran (1985) n/a n/a Traces evolution of CSR model and focuses on multiple challenges regarding social responsiveness. Examines social issues of management and its relationship to CSR. Strictly theoretical/explanatory. No empirical evidence and not necessarily research-based.
(Carroll 1991) n/a n/a Provides a model to improve corporate social responsibility and moral management of a firm. Suggests a balance can be struck between CSR and profitability. Once again, not based in empirical research. Solely theoretical in nature.
(Frederick 1994) n/a n/a Outlines a conceptual business transition in business and society scholarship, from philosophical concept of CSR to social responsiveness. Lacks empirical evidence, solely theoretical.
(Carroll 1999) n/a n/a Discusses history of CSR and evolution of construct. Fewer definitions available and more empirical research now existent. Lacks empirical evidence, solely theoretical.
(Lantos 2001) n/a n/a Reviews the development of CSR concept and discusses its four components. Suggests that much confusion has arisen due to failure to distinguish among different types. Lacks empirical evidence, solely theoretical.
(McWilliams & Siegel 2001) n/a n/a Theoretical proposal of supply/demand model of CSR. A firm’s level of CSR depends on its size, level of diversification, research and development, advertising, government sales, consumer income, labor market condition, etc… Lacks empirical evidence, solely theoretical in nature.
(Jensen 2001) n/a n/a Sets a definition of CSR as an extended model of corporate governance and accounts for voluntary approach to CSR. Bases definition on social contract factors, reputation, and reciprocity. Lacks empirical evidence. Solely theoretical.
Joyner & Payne (2002) 2 U.S. organizations Structured qualitative interviews Provides evidence for two successful firms that have implemented CSR strategies and values to their benefit. Small sample size, self-selecting sample. No empirical evidence, qualitative in nature. No causal results.
(Jackson 2003) n/a n/a Provides theoretical understanding of CSR from its multiple levels. At one level, self- and co-regulation rule CSR definition. At another, it challenges the idea of liberal market economy. Lacks empirical evidence, solely theoretical.
Garriga & Mele (2004) n/a n/a Aims to clarify CSR territory mapping problem and places CSR theories into four groups: instrumental, political, integrative, ethical. Theoretical in nature but may provide practical problems. No empirical evidence of these designations.
(Prior, Surocca & Tribo 2008) Archival data from 593 industrial firms from 26 countries between 2002 and 2004. Utilizes earnings management formula to compute expected accruals. Tests robustness using income smoothing formula. Return on Assets formula to assess value of assets among firms. Multiple regressions run to detect significant differences. Found a positive impact of earnings management practices on CSR, which holds for different robustness checks. Also demonstrates combination of earnings management and CSR has negative impact on financial performance. Reduced number of years on which findings are based. Fails to look at endogeneity issues. Does not consider possibility that other types of variables could intervene in relationship between earnings management, CSR, and financial performance. Competing theoretical arguments as well.
van Marrewijk (2003) n/a n/a Provides overview of the contemporary debate on CSR concepts and definitions. Proposes that “one-size-fits-all” concepts of CSR should be abandoned. Theoretical and lacks empirical evidence. Future research problems based on multiple approaches to studying CSR.
Valor (2005) n/a n/a Explains model of CSR and movement towards greater corporate accountability. Explanatory in nature. Theoretical/conceptual in nature. Provides no empirical evidence of research support.

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

Study/
publication
Number of participants Methodology/
Methods
Findings Limitation
Baron (2001) n/a n/a Addresses issue of CSR by distinguishing among corporate redistribution as motivated by profit maximization, altruism, and threats by activism. Private politics and CSR have direct effect on costs of the firm. Theoretical, no empirical evidence.
Maignan & Ralston (2002) GDP of four countries ANOVA regarding profitability related to CSR implementation. Compares extent and content of communications regarding CSR principles, processes, and motivations. Businesses in four countries do not display same eagerness to utilize CSR. Correlation, small sample size, lacks theoretical foundation and fails to account for multiple business types and motivations.
Husted (2003) n/a n/a Develops a framework to compare alternative modes of CSR governance and identifies key drivers that affect governances choice, including costs. Accounts for just cost as a key motivator for CSR implementation, while failing to account for other factors. Theoretical.
Hemingway & Maclagan (2004) n/a n/a Suggests that in so far as CSR initiatives represent individuals’ values, CSR becomes more greatly practices and corporation is not seen as agent. Theoretical, lacks empirical evidence.
Graafland (2006) 111 Dutch firms Regressions to test correlations among stakeholder motivations and views on CSR. Intrinsic motives induce stronger involvement in CSR than extrinsic motives. Correlation, no post hoc measurements to determine causation. Instruments not validated.
Becker-Olsen, Cudmore, & Hill (2006) Study 1

28 m/f respondents

Study 2

28 m/f respondents

Study 1

randomized, between subjects ANOVA

Study 2

Qualitative ratings of perceptions regarding firm

Low-fit initiatives negatively impact consumer beliefs, attitudes, and intentions no matter what the firm’s motivation. High-fit initiatives that are profit-motivated have same impact. Focuses on several firm-specific factors but lacks individual differences. Fails to account for some historical contexts of CSR. Not all results tied to theory.
Basil & Weber (2006) 6,065 respondents from national survey. Multiple regressions of survey data to examine differences in support for corporate social responsibility based on personality traits. Individuals motivated by a concern for appearances, egoistic enhancement motivation, and individual values, make purchases in support of corporate social responsibility. Correlation in nature and does not provide post-hoc assessment of causative factors. Fails to account for larger corporate values influencing individual motivation.
Jenkins (2006) 24 European countries with firms using CSR strategies Qualitative data derived from semi-structured interviews Evidence that stakeholder theory may provide a framework in which SMEs and CSR can be understoond. Requires strong leadership from highly motivated individuals. Qualitative and not causal in nature. Small, self-selecting sample.
Ven van de & Graafland (2006) 111 large and small Dutch firms and five stakeholder groups. Multiple regressions to correlate positive strategic and moral view to CSR, and implementation of stakeholder-related aspects of CSR. Results show that a majority of firms share a positive view of CSR in multiple dimensions. Managers share unique views, but a strong correlation exists between CSR performance and moral view on CSR. Study is correlational in nature and does not provide cause and effect result. Small, potentially self-serving sample. Lacks strong theoretical basis.
Aguilera et al., (2007) n/a n/a Provides a multilevel theoretical model to understand why organizations are increasingly engaging in CSR. Integrates variety of motivational factors. Theoretical framework, no empirical evidence.
Jamali & Mirshak (2007) n/a n/a Provides multicultural overview of motivational factors related to CSR. Proposes three-dimensional model of corporate performance. Theoretical, lacks empirical evidence.

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

Study/
publication
Number of participants Methodology/
Methods
Findings Limitation
Esrock & Leichty (1998) 25 Fortune500 companies Randomized sample, simple descriptive statistics 90% of random sample had Web pages, while 82% of sites addresses at least one corporate social responsibility issue. Small sample, no inferential statistics used. Failed to account for company type and lacked theoretical basis.
Clark (2000) n/a n/a Key differences revealed whereby effective communication methods are largely absent from CSR literature. Proposes communication management approach, which is linked to stakeholder analysis. Literature review, qualitative in nature. Lacks theoretical basis or empirical evidence.
Frankental (2001) n/a n/a Considers paradox of CSR and multiple contrasting views of consumer purchasing behavior related to CSR. Suggests CSR is mostly a PR construct to improve business. Does not account for multiple individual motivations regarding CSR and lacks empirical evidence.
Mohr, Webb, & Harris (2001) 167 respondents Qualitative semi-structured interviews Consumer purchasing behavior ranges from unresponsive to highly responsive relative to CSR strategies implemented. Doesn’t provide substantial addition to body of research. Lacks theoretical basis.
Sen & Bhattacharya (2001) n/a n/a Both company-specific factors, such as CSR issues, and individual communicative factors, serve as key moderators of consumers’ responses to CSR Qualitative/lacks empirical evidence.
Snider, Hill, 7 Martin (2003) top 50 multinational firms on Forbes50 Qualitative analysis of website data. Provides implications for CSR among managers of top 50 firms. Suggests stronger firms hold well-documented CSR strategies, which are present on Websites. Qualitative, does not include other, smaller firms. Lacks empirical or theoretical support. Biased sample.
(Wagner, Lutz & Weitz 2009) Study 1:

537 undergraduate students enrolled in marketing classes at a large public university

Pretest:

226 undergraduate students

Study 2:

611 undergraduate marketing students

Pretest:

294 undergraduate marketing students

Study 3:

336 students

Pretest:

151 undergraduate marketing students

Study 1:

structural equation modeling (SEM)

Pretest:

ANOVA

Study 2 and 3;

2X2X3 full-factorial experiment/design

Pretest:

ANOVA

Study 1:

Proactive communication strategy leads to higher levels of perceived hypocrisy than reactive strategy

Inconsistent information increase perception of hypocrisy, therefore CSR statements can be counterproductive

Perceived hypocrisy damages consumers’ attitudes toward firms by negatively affecting CSR beliefs and provides evidence for the mediating role of hypocrisy during

information processing

Study 2:

Varying CSR policy statement abstractness acts to reduce the hidden risk of proactive communication strategies and can improve the effectiveness of a reactive strategy.

Study 3:

Inoculation communication strategy reduces perceived hypocrisy and minimizes its negative consequences, regardless of whether the CSR strategy is proactive or reactive.

Considers one context, retailing, and consumers living in the United States

Framework is limited in that it assumes a recursive, or unidirectional, nature of selected interrelationships among the variables of interest; potential non recursive effects and additional dependencies still need to be examined

External validity of the suggested dynamics of corporate hypocrisy perceptions needs to be strengthened by follow-up field research

(Morsing & Schultz 2006) n/a n/a When companies want to communicate with stakeholders about CSR, way vary substantially. Three communication strategies emerge, however. Managers need to move from informing and responding to involving stakeholders. Managers also need to expand role of stakeholders in corporate CSR processes. Lacks empirical evidence, theoretical in nature.
(Moreno & Capriotti 2009)   A specific tool was developed to monitor the treatment of CSR/CC/SD issues on corporate web sites. Content analysis was applied to the complete spectrum of enterprises within the IBEX-35 Web has become an essential instrument for the communication of CSR/CC/SD issues, although its use is limited to certain content

 

Disparity between the volume of information and its dispersion

 

Communication is primarily unidirectional/expositive

 

Companies do not sufficiently use eternal criteria to guarantee the corporate behaviour they report

 

The IBEX-35 company sample represents the companies on the Spanish Stock Exchange that have the most capital. Thus, its results cannot be extended to other top companies or to smaller firms
Du, Bhattacharya, & Sen (2010) n/a n/a By engaging in CSR, companies can generate favorable stakeholder attitudes and better support behaviors, but also strengthen relationships. Effective communication is essential to this process. Theoretical/conceptual in nature. No empirical support.

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

Study/
publication
Number of participants Methodology/
Methods
Findings Limitation
Lewis & Unerman (1999) n/a n/a Relates ethics to CSR polices and ties these into varying cultural perspectives on ethics. Argues in favor of reasoned form of relativism. Lacks empirical evidence, theoretical in nature.
Blowfield & Frynas (2005) n/a n/a Multi-component analysis of CSR development in the new business world. Provides emerging themes of CSR for future research from a worldwide perspective. Lacks empirical evidence, summary of ther research articles.
Branco & Rodrigues (2006) n/a n/a Provides proposition for resource-based perspective on CSR throughout the world. CSR tied into a local economy’s resources and ethical standards. Theoretical, lacks empirical evidence. Does not account for common research-based perspectives on CSR despite varying resources and ethics.
Doh & Guay (2006) n/a n/a Provides evidence of divergent CSR perspectives between Europe and North America. Suggests CSR and economic performance are not mutually exclusive. Varies by institution. Fails to account for convergence in institutional environment for policy-making. Lukewarm support of some CSR strategies throughout world. Lacks clear understanding of institutional differences in policy-making.
Waldman et al., (2006) 561 firms in 15 countries Longitudinal cross-sectional examination of leadership variables associated wth CSR values. Cultural dimensions of institutional collectivism and power distance predict social responsibility values on part of top management team members. CEO visionary leadership and integrity also uniquely predictive of such values. Fails to account for changing worldwide perspectives of corporate social responsibility over time and multiple perspectives of CSR based on current population.
Visser (2006) n/a n/a A critical perspective of CSR has emerged, as well as a broader worldwide scope and content of mainstream CSR due to enhanced empirical research. This has contributed to maturation of concept of CSR throughout the world. Failure to critically engage with role of government produces a bottom-up approach to CSR analysis.
Collier & Esteban (2007) n/a Literature review Employee attitudes and behaviors are effected by organizational culture and climate, dependent on CSR policies and values. Motivation and commitment affected by extent to which individuals adapt to CSR policy. Theoretical, lacks empirical evidence. Highly focused on recent research and fails to account for historical contexts.
Ringov (2007) 463 firms in 23 countries Theoretical propositision, and least squared regressions models Proposed that countries with higher levels of power distance, individualism, and masculinity have lower levels of social and environmental performance. Power distance and masculinity have significant negative effect on social and environmental performance. Regressions model does not provide causal evidence of contributing factors of social and environmental performance.
Campbell (2007) n/a n/a Provides institutional theory of CSR with propositions of situations that govern the need for CSR behavior. Theoretical. Fails to account for varying worldwide perspectives, ethics, and resources.
Basu & Palazzo (2008) n/a n/a Proposes model of organizational sensemaking explaining how managers react and adjust to CSR policies. Theoretical, lacks empirical evidence.

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.

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