Corporate Social Responsibility – A contested view in academia
The concept of Corporate Social Responsibility (CSR) is as old as business itself and a prominent notion in management discourse; however researchers still do not share a common definition or set of core principles. Nevertheless, there is a consensus that the concept of CSR symbolizes different meanings to different individuals across different country contexts.
Prominent researchers such as Theodore Levitt (1958) and Milton Friedman (1962) are notable opponent of CSR and state that the social responsibility of the business is exclusively to increase the profits of a firm’s shareholders, while obeying the law. Their viewpoints are largely grounded on economic and legal arguments and argue that social problems are not the business concern and it should rather be resolved by the free market system. On the contrary, the proponents of CSR, such as Bowen (1953), Keith Davis (1963), Freeman (1984), and Carroll (1999) argue that CSR requires ‘consideration of issues beyond the narrow economic, technical and legal requirements of the firm’. In general they assume that businesses have a wider responsibility to society; because businesses benefit from the support of society, they, in turn, have a responsibility to contribute to the welfare of society.
Inevitably in current context, CSR play a key role in positioning a business in its environment. Just as a number of strategic tools describe how a company is strategically positioned, the ethical reputation that a business has, is also thought to be important in its overall strategic positioning. So society’s view of a company, and hence its willingness to engage with the company, is partly dependent upon its ethical reputation over many years. CSR actions and measures are considered to be one important way of influencing this.
Looking around, Innovative leading organisations consider CSR as a creative opportunity which primarily strengthen their business while contributing to wider society at the same time. They view CSR as central to their overall strategies, helping them to creatively address key business issues. Companies such as Starbucks, Nestle, Walt Disney, Google, and Apple, are well-known for their best CSR reputations. These companies have carefully mapped their stakeholder value chain and taken care to involve them in their CSR initiatives. For instance, their CSR actions include donating money to charities, helping non-governmental organizations, donation of staff time or excess inventory, providing staff expertise to local good causes etc.
Strategy for CSR
A strategy simply implies something that is planned, and purposeful; a plan of action that is designed to achieve long-term or overall goal. In a similar vein, CSR strategy is a series of stages that intend to achieve a particular outcome or strategic end. For instance; what does company need to do to ensure its CSR strategy that creates business value? So, CSR strategy involves making choices; company needs to think carefully that how they can save or make money for its business, and at the same time meet the challenges of a specific societal need, and create shared value. Once these choices have been made, the responsible people for implementing CSR strategy will have a basis for CSR decisions. This is what known as CSR Strategy. However, CSR strategy must not be implemented on personal views of CSR person, or department rather it should reflect the values and beliefs of the company’s owners, the shareholders, in CSR matters.
Strategic is a term used to signify a certain motive. For a business, something that is strategic is concerned with the long-term success of the business and its strategic positioning. By taking Strategic CSR approach, companies can determine; how they should utilize resources aptly while being socially responsible and can also strengthen their competitive edge. Thus, companies need to be careful while making CSR as a part of overall company’s plan i.e. they should ensure that profits and maximizing shareholder value must not overshadow the need to behave ethically towards their stakeholders. For instance; balancing the economic value with that of societal value; managing their stakeholder relationships (especially those with competing values); developing sustainable business practices and deciding the organization’s capacity for philanthropic activities
So what does strategic CSR look like? One well-known medical supplies company, support nurses and doctors in their training and research. Because it will be nurses and doctors who, once qualified and in senior positions, will be able to select suppliers for their hospitals and other health facilities they work in. If they have benefitted from the company’s funding as trainees, they may be well-disposed to the company for all of their working lives.
Thus, when CSR is strategic, it is more likely to be better planned and more effectively configured and co-ordinate with other business operations. Better targeted, CSR is likely to be more effective and efficient than ‘ad hoc’ or unplanned CSR.
Author Sonia Sethi, a NuSocia CSR Insights Author, is a lecturer cum Ph.D. Scholar in the field of CSR at Islamia College University, Peshawar and working to contribute in building a knowledge base in the field of CSR. She looks forward to views and comments on the blog, from academicians and practitioners in the field of CSR.