Literature Review

Corporate Social Responsibility and Ethics


Contents Page

Introduction

1.0 Criteria for Selection of Articles

1.1 Defining Corporate Social Responsibility (CSR) and Ethics

1.1.1 Defining Corporate Social Responsibility (CSR)

1.1.2 Ethical Considerations – the HR Perspective  

1.1.3 The Ethical and Social Responsibility – the Marketing Perspective

1.1.4 A Brief Overview of the History of SCR

1.1.5 A Brief Conclusion so Far

1.2 Dynamic and Working Models – Measurement of SCR and Social Audit

1.2.1 Working Model and Measurement of SCR

1.2.2 Dynamic Model and Social Audit

1.3 Ethical CSR vs. Altruistic CSR vs. Strategic CSR

Conclusion

Bibliography

Introduction

The aim of the following literature review is to identify the most important and knowledgeably important academic and practical works throughout the past decade upon the concept of Corporate Social Responsibility (CSR) and Ethics.

The report should gradually flow thought the history of the concept, definitions, academic and practical view of various writers, including the appraisals and criticisms as well as real live examples if applicable. Moreover, draw certain linkages towards the other paradigms. Finally, the conclusions and recommendations should be taking place upon the development and current stance of the concept and its future respectively.  

The initial literature research has reviled many sources of the information, directly and indirectly focused upon the subject, therefore, the author hope to cover the subject from different perspectives and angles, so that achieving high degree of comprehensively and depth of the analyses.  

1.0 Criteria for Selection of Articles

Aiming to find the most relevant material as well as achieving the widest possible scope, the following criteria were selected in commencing the literature research:

  • Academic journals on CSR and ethics as well as related subjects/concepts, for instance Marketing, Advertising, HRM, etc;
  • Newspapers and magazines – mainly for the live case scenarios and analyses;
  • Journals/Magazines/Newspapers issues for the past 8-10 years;
  • Library – books and textbooks.

However, in order to save time as well as increase the scope of the research, it was suggested to place a particular focus upon the electronic sources of information, which were targeted by using the key knowledge portals/electronic databases as follows:

http://www.athens.ac.uk

http://www.nader.org/

http://

http://www.essential.org/monitor/focus/focus.index.html

http://www.emeraldinsight.com

http:www.anova.com

http://

http://

http://

http://www.economist.com

 

During the course of the research it was reviled that it is much more efficient and effective to work with electronic sources of information, nevertheless, some of the hard copy sources were used due to their value to the research purposes and as the means of cross-checking and guide lines.

The only major problem facing the researcher was the amount of the obtained information and therefore experienced physical difficulty in regard to the reading and analysing of the materials. The subject has proven to be very broad along with strong linkages to other concepts making it difficult to establish the core line without losing the focus upon the secondary (in terms of importance) implications of the paradigm.

In order to solve some of the above problems and attract the maximum possible structural approach towards the review, the articles on the matter were presented by three types:

  • Research articles;
  • Journalistic articles;
  • Working papers;
  • Quotations/citations;
  • Books’ extracts.

1.1 Defining Corporate Social Responsibility (CSR) and Ethics

Ethical standards and social responsibility can be viewed from very different perspectives. However, the author is planning to choose Corporate Social Responsibility (CSR) as a ‘backbone’ of the project and any relevant considerations, issues or concepts more like a ‘ribs’. Selection of such a unusual description has a purpose to illustrate that non of the concepts, hypothesis, theories, etc. can be looked at purely on their own but as a part of the larger framework (‘the body’).

1.1.1 Defining Corporate Social Responsibility (CSR)

One of the early advocates of CSR, Wood D. (1991) highlights that corporate social responsibility theorists argue that management should incorporate ethics into strategic goals because it is the ‘right’ thing to do. At a time, it was obviously the right thing to say (looking at the current development of the paradigm and its practices), however, was lacking the solid ground.

More recent authors such as Susan Key and Samuel J. Popkin (1998) argue that ‘integrating ethics into the strategic management process is not only the right thing but also the profitable thing to do’, which is perhaps a very clear and motivating explanation for any business organisation, i.e. to speak the language of benefits and profits.

Waddock and Graves (1997) have tied corporate social performance to increased financial performance, and Frooman (1994) found that unethical behaviour leads to decreases in stock price.

The studies upon the causes of corporate failures and disasters commenced by Allinson (1993) and earlier by Arthur (1984) suggest that incorporating ethics in before-profit decision making can improve strategy development and implementation and ultimately maximise corporate profits.

Moreover, Kang (1994) suggests that to both enhance financial performance and limit liability, ethical criteria need to be included as part of strategic management in before-profit rather than after-profit decision making such as philanthropic contributions.

Following the opinion of advocates of CSR, any large organisation is essentially a social institution as well as economic enterprise. Therefore, any business affairs must be carefully weighted in terms of possible social impacts as the results of such activities, ‘balancing carefully conflicting responsibilities to various stakeholders’ (Geoffrey P. Lantos, 2001).

The above leads to the definition of CSR proposed by (Bloom and Gundlach, 2001) in the view of the obligations of the firm to its stakeholders, i.e. people and groups who can affect or who are affected by corporate policies and practices. These obligations go beyond legal requirements and the company’s duties to its shareholders. Fulfilment of these obligations is intended to minimise any harm and maximise the long-run beneficial impact of the firm on society.

Bloom and Gundlach (2001) summarise by stating that CSR entails the obligation stemming from the implicit “social contract” between business and society for firms to be responsive to society’s long-run needs and wants, optimising the positive effects and minimising the negative effects of its actions on society.

 

Generally speaking, over the past decade, a growing number of companies have recognised the business benefits of CSR policies and practices. This was further fuelled by the growing evidence coming from empirical studies that CSR is causing a very positive effect upon the monetary performance of any business organisation, attracting positive publicity and creating a certain competitive advantage. Obviously, all these positively contribute towards the shareholder value.

The understanding provided as a result of research conducted by Walter Schiebel and Siegi Pöchtrager (2003) “outlines that companies also have been encouraged to adopt or expand CSR efforts as the result of pressures from customers, suppliers, employees, communities, investors, activist organisations and other stakeholders. As a result, CSR has grown dramatically in recent years, with companies of all sizes and sectors developing innovative strategies”.

It is possible to trace the obvious improvement over the course of two years by looking at earlier definition of CSR provided by the Journal of Consumer Marketing (2001) is that an organisation’s obligation to maximise its positive impact and minimise its negative effects in being a contributing member to society, with concern for society’s long-run needs and wants. CSR means being a good steward of society’s economic and human resources.

 

Walter Schiebel and Siegi Pöchtrager (2003), further explore this view by saying that many companies are choosing to make an explicit commitment to corporate social responsibility (CSR) in their mission, vision and values statements. Such statements frequently extend beyond profit maximisation to include an acknowledgement of a company’s responsibilities to a broad range of stakeholders, including employees, customers, communities and the environment.

This brings us to the concept of so-called “values-based business approach”, which views company’s strategy as a set of core values, which are independent of specific strategic goals and play a role of the directing force in determination of company’s ‘mission and vision as well as its day-to-day policies and operations’ (Walter Schiebel and Siegi Pöchtrager, 2003).  

The following definition by Andrews, quoted in Hartman (1998) takes more radical human and social perspective, stating that the intelligent and objective concern for the welfare of society that restrains individual and corporate behaviour from ultimately destructive activities, no matter how immediately profitable, and leads in the direction of positive contributions to human betterment, variously as the latter may be defined.

Join now!

Overall and attempting to run a conclusion upon all of the presented in the above definitions and considerations on the subject, it can be truly said that there is no common definition. However, each company responds in its own unique way, depending upon its core competencies and stake-holder interests – of course, this is happening at a very different degree of success, depending upon the company’s expertise and efforts.  

Moreover and obviously, country and cultural tradition also have a major impact upon the companies’ response. In the words of Walter Schiebel and Siegi Pöchtrager (2003) social responsibility is ...

This is a preview of the whole essay