Marketing in a Global Environment, Research Paper Example

Corporate social responsibility is a concept of high importance and interest in the modern management and marketing literature, because it is the way of connecting business and social needs, and making businesses more sensitive and responsible in relation to the effect their corporate or industrial activities produce on the local communities and surrounding environments. Though the business, especially industrial ones, have been producing a grave adverse impact on the environment and people’s health since the onset of the Industrial revolution, the formal recognition of the business need to function more responsibly towards the world (including people, the environment, and the global eco-system) only after the climate change and environmental situation aggravation was officially acknowledged by the global research and political community in the second half of the 20^th century. Hence, since that time, CSR has been viewed as a way of bringing the business and social needs into alignment, and of guiding businesses in the adoption of more environmentally, economically, and socially friendly behavior modes.

The article of Windsor (2001) sets the context of CSR analysis from the historical, developmental perspective; it is titled The Future of Corporate Social Responsibility, and is primarily dedicated to the theoretical analysis of the ways in which CSR emerged as a key concept of business and society relations, and how it evolved in the course of history. Windsor (2001) emphasized that the renewed interest to CSR is dictated by the emergence of anti-responsibility trends in the recent academic literature, and the managerial views considering best business practices instead of the focus on social interests. Hence, Windsor (2001) undertook a developmental history analysis of CSR from the Progressive Era until modernity. In the author’s viewpoint, there are three competitors of CSR in the present-day vision thereof: the economic perspective on responsibility, the global corporate citizenship, and the stakeholder management practices. Moreover, Windsor (2001) assumed that in the global context, the fundamentals of CSR remain the prevailing psychology of the manager, and the normative framework dictating the guidelines for its shaping.

Paraphrasing the Background

One of the central theories on which Windsor (2001) based his analysis is the CSR research of Bowen (1953) aimed at establishing the extent to which the business interests may merge with social ones. Hence, Windsor (2001) assumed that Bowen’s question might have presupposed a certain possibility of business deviation from social interests and needs, which had to be taken into account when taking CSR of a business enterprise for granted. Windsor’s (2001) article thus represented the modern attempt to replicate the study of Bowen, and to find out to which extent businesses have succeeded in merging their interests with those of the larger society up to date, and which unity perspectives expect businesses and societies in the near future.

Windsor (2001) derived the argumentation from considering three periods of CSR existence as a concept – the rise and extension, decline and absorption, and revival. The emergence and rise of CSR was attributed to the Progressive Era, the works of Adam Smith and the dominant laissez-faire market philosophy. When analyzing the history of CSR development, the author also noted the realm of research streams and directions in which CSR is presented as a meaningful construct, including “business ethics, corporate social performance, environmental protection, global corporate citizenship, international policy regimes, public policy (i.e., business-government relations), and stakeholder management theory” (Windsor 2001, p. 229).

The Progressive Era shaped the preliminary understanding of the CSR concept, in the opinion of Windsor (2001). According to the author, Adam Smith’s philosophy of pursuing the economic self-interest for the sake of subsequent achievement of the general public welfare is enjoyed tremendous success, and the private contract doctrine was the basis thereof. That era gave rise to such concepts as responsibility and responsiveness, mainly in the form of business apologetics and sophisticated conflict management practices in favor of particular influential interest groups (Windsor 2001, p. 229). In connection with those developments, Windsor (2001) also claimed that CSR emerged during the Progressive era and contributed to the awareness of such business responsibilities as post-game philanthropy, pre-game legal constraint, and in-game moral conduct (p. 230).

Methodology

The methodology applied by Windsor (2001) in his article is that of evolutionary historical analysis of the CSR concept from its inception to modernity. By analyzing the early writings on CSR, the theoretical frameworks for CSR analysis, and opinions of management researchers, Windsor (2001) critically analyzed the modern stance towards CSR and the theoretical and practical alternatives to the concept of responsibility. On the basis of his findings about the past and present state of the CSR concept, Windsor (2001) made a series of forecasts on the future of CSR evolution and development in both management practice and theory.

Major Findings

Though the fundamentals of CSR emerged during the Progressive Era, Windsor (2001) still credited Bowen, Levitt, and Friedman for the formulation of the responsibility concept. Bowen is reasonably considered the father of CSR because of his extensive research on the business responsiveness, stewardship, social audit, and corporate citizenship, as well as the germinal forms of the stakeholder theory (Windsor 2001, p. 230). Levitt contributed to the development of CSR by his criticism thereof, and the research on the threats of CSR to business, while Friedman warned against the threats of discretionary social responsibility of the modern managers, and proposed the need to design the framework based on both legal and moral rules of the business game, that is, CSR.

Figure 1. Relationship among the CSP Framework, CSR1 Pyramid, and Stakeholder Theory

Source: from Windsor (2001, p. 232).

Another specific focus of Windsor (2001) in terms of the theoretical CSR paradigm formulation is the research of Carroll who viewed CSR in shifts (origin of notion, expansion in literature, and proliferation of responsibility definitions) (p. 231). In Carroll’s viewpoint, the 1980s were the turning point in empirical CSR research, to which he applied his four-dimensional pyramid model of responsibility (see Figure 1). Windsor (2001) also provided a detailed overview of the current theoretical CSR paradigm that included the corporate social performance (CSP) framework of Wood (1991), the pyramid of corporate social responsibilities of Carroll (1991), and the stakeholder theory of the firm of Freeman (1984) – see Figure 1.

As one can see, the competing paradigms for CSR research are presented in Figure 1. According to Windsor (2001), Wood reworked the categories of Carroll’s pyramid into the notion of CSR1 principles, or in other words, motivators. The four-dimensional pyramid of Carroll is positioned below the CSR1 principles, and stakeholder relationships are presented in the form of a crosswalking matrix from responsibilities to outcomes following the social outcomes (Windsor 2001, p. 233). Following Carooll’s CSR theory, economic obligations coexist with other obligations and are kept to on the basis of managers’ moral actions. Hence, Windsor (2001) admitted that Carroll posed little focus on the moral conditions of CSR, while the reformulation offered by Kang and Wood (though rather complex and hard to grasp) can still be credited with distinguishing after-profit responsiveness and before-profit responsibility. Kang and Wood, in the opinion of Windsor (2001), focused much more intensely on the moral dimension of CSR.

Another point of Windsor’s (2001) interest in the analyzed article is the analysis of competing paradigms for CSR. According to Windsor (2001), the modern management research has yielded three major alternatives to CSR: “a revived and extended economic conception of responsibility”, “a global corporate citizenship philosophy”, and “stakeholder management practices” (p. 235). Within the framework of economics of responsibility, Windsor (2001) outlined the theories of Manne, Wallich, Friedman, Sternberg, Jensen, McWilliams, and Siegel as formative. For instance, Manne and Wallich were among the pioneers of the economic insight into CSR, and they assumed that responsibility is costly for businesses, so voluntary and legal responsibility should be distinguished, and companies should involve in voluntary CSR to the extent dictated by the individual willingness to do so, while the minimum legal obligations were mandatory for observing. Hence, the economic focus on CSR and its illumination in the modern research literature celebrates the revival of the Friedman viewpoint on the business responsibility’s prime interest in the pursuit of financial profitability, not the public good. Sternberg assumed that stakeholder rights are secondary to the business owners’ rights, while Jensen made an explicit emphasis on the primacy of value maximization as opposed to a new and unverified stakeholder theory (Windsor 2001, pp. 235-236).

Another competing alternative to CSR is that of corporate citizenship. Windsor (2001) expressed a negative opinion about that concept because of its fictional and elusive nature. Corporate citizenship was first introduced by Carroll and Bowen who suggested that philanthropy incorporated it as an aspect. Corporate citizenship is also viewed highly favorably because of its practical nature as compared with CSR more widely used in management theory than in practice. However, in the opinion of Windsor (2001), corporate citizenship was a managerial and philanthropic ideology consistent with governmentally advocated voluntarism. The author considered corporate citizenship as a logical outcome of two intertwining circumstances: rising social expectations of corporate benefits in the age of governmental outbacks, and strategic management directed at value creation in all functions and activities of a business entity (Windsor 2001, p. 238).

The concept of corporate citizenship looks empowering, but as Windsor (2001) emphasized, it is a dual concept that should be treated with caution. On the one hand, the ultimate power of society is reaffirmed regarding the imposition of corporate responsibilities, and strategic alignment of business activities with wider social needs is associated with a large number of profits and benefits for the business. However, following this paradigm, one should also adopt the innovative vision of a corporation as a citizen, which further complicates the operation of legal issues related to legitimizing the political influence and activities of business executives of that company (Windsor 2001, p. 239). The prime threat of corporate citizenship seen by Windsor (2001) is that it emphasizes the companies’ rights more heavily than it focuses on the reaffirmation of their responsibilities, thus substituting the concept of responsibility by a vaguer, less relevant concept.

Speaking about the role of corporate philanthropy, Windsor (2001) admitted that it partly meets the business judgment rule, and that citizenship plays its role in administering the moral judgment in the business environment. The concept of corporate citizenship may be strategically seen as the strategic investment in the firm’s social and natural environments, which may further lead to the boost of sustainable growth and profitability. However, the problem is with the fictional nature of corporate citizenship. First, it portrays the domestic enterprise as an equivalent to an ordinary citizen, which makes the company equal in its legal, moral, and other obligations and rights to every single person in a state, which is not adequate for the size of the firm and the positive or adverse impact on the world that it may produce. A similar situation is observed in cases with multinational enterprises that are seen as the citizens of the world, the notion virtually absent in constitutional, legal, and international regulations. Thus, the concept of corporate citizenship equaling a business to an individual faces a range of conceptual challenges that may further hinder the formulation of correct sets of companies’ rights and obligations.

In this context, trying to resolve the dilemma with corporate citizenship and its implications, Windsor (2001) proposed an alternative framework – that of progressive responsibilities. According to it, the more the company is, the more responsibilities it has, and the more obligations it has to meet in terms of social, environmental, economic, and other impact it produces. Windsor (2001) compared that concept for businesses with a similar system for individuals – graduated income tax liabilities have been designed for people who earn more, so that the rich would pay more taxes to the state, while the poor would pay less (p. 242).

The third alternative mentioned by Windsor (2001) is the one of stakeholder management practices. The author admitted that the practice emerged at the Stanford Research Institute, and many researchers such as Blair, Clarkson, and Carroll considered it a much more definite and transparent concept than that of responsibility. These researchers regarded stakeholder theory as a much more feasible path to corporate social performance improvement, and its ability to translate into business action in response to the pressures from various involved stakeholders. The attractiveness of stakeholder theory is seen in its prime focus on the empirical interests and practices; nevertheless, it has also faced much criticism of being non-focused, non-specific, and unable to determine any specific business strategy (Windsor 2001). The author also outlined such problems with stakeholder theory as the definition of stakeholdership’s scope, and the paradoxical status of nature in the debate about stakeholder rights and status. Moreover, the relationship between stakeholder management practices and wealth creation is not yet well understood, with some authors claiming their non-compatibility, and others insisting on the possibility of uniting stakeholder interests and the organizational prosperity.

Recommendations and Conclusions

After analyzing the competing paradigms for CSR and their legitimacy, Windsor (2001) assumed that CSR was the earliest notion in business and society studies, and is still in common use as a widely accepted “core construct” in management (p. 245). The author proceeded to outlining the prospects of the CSR concept in the near future, taking into account the analysis of trends and evolutionary changes that both practice and theory of CSR have undergone within the past century. Windsor (2001) emphasized that the future of CSR primarily depends on the pressure of globalization; in his opinion, in the present-day context of globalization, the CSR concept has evolved to cover the behavior of multinational enterprises. Hence, serving the poor in developing economies is often seen as a profitable business and not the matter of CSR. The solution to the current challenges met by CSR and its achievement in the real-life managerial practices is seen by Windsor (2001) in the education of more moral and accountable managers able to incorporate the concepts of CSR and corporate citizenship in the daily activities of their enterprises.

The article of Windsor (2001) has numerous implications and high significance for the CSR research in global marketing. First, the author explored the future prospects of CSR in terms of theory and practice by taking a historical perspective, and analyzing its whole development course. Moreover, Windsor (2001) produced a set of valuable observations in terms of modern CSR specificity, and emergence of more manager-friendly paradigms of CSR with emphasis not on responsibility but on performance, and seeing the responsiveness to the social needs only as a tool of wealth creation. Hence, the author’s findings are highly valuable in terms of understanding the modern form of CSR, and estimating its future directions of development and evolution, as well as factors shaping it.

References

Windsor, D. (2001). The future of corporate social responsibility. The International Journal of Organizational Analysis, 9(3), pp. 225-256.