csr complete-wongjiayi example
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CORPORATE SOCIAL RESPONSIBILITY OF LARGE CORPORATIONS WONG JIA YI
1.0 INTRODUCTION
This literature review employs insights to the studies and findings done by previous prominent
researchers on the topic of corporate social responsibility (CSR). In this literature review, the
main sources consulting are including books, journals and dissertations that related to CSR.This
topic is an extensive study and encompasses numerous concepts and related notions.
Nevertheless, the main objective of this literature review is to recapitulate the studies into three
main parts. Initially, history and terminology regarding CSR will be reviewed. Subsequent,
imperative changes and development of CSR have also been identified, illustrated by three well-
known models: Frederick’s model, Mohan’s model, and Carroll’s CSR pyramid. Thirdly, two
approaches are employed to clarify the growth of CSR in large corporations which are economic
approach and stakeholder theory.
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2.0 HISTORY AND TERMINOLOGY
The concept of CSR is actively discussed since 1950s. This view is agreed by Sriramesh et al.
(2009) and along with Maignan and Ferrell (2004) who recognized one of the earliest definitions
of CSR which is the Bowen’s definition. According to Bowen (1953, p.6), CSR defined as “the
obligations of businessmen to pursue those policies, to make those decisions, or to follow those
lines of action which are desirable in terms of the objectives and values of our society.”
Since then, profuse researches have been done on CSR and various definitions have been
discovered including Carroll (1979), McWilliams and Siegel (2001), and Whetten et al. (2002).
From readings, it is noteworthy that definition of CSR has been altered from the broad term
society that narrowed down to stakeholders. (deBakker et al., 2005) This is confirmed by Table
1, showing the evolution of CSR definition. In addition, Clarkson (1995) made a similar
observation which revealed that the term society is broadly defined, inclusive and obscured. The
same author further mentioned that responsibility of business is not toward society all in all but,
toward those who affected by the business, which is the stakeholders.
Furthermore, the newest concept of corporate citizenship (CC) is again a subject of debate
among CSR scholars. The term emerged since 1990s and one of the leading scholars, Post (2000)
defined the terms in deeper framework. (Table 1) As stated by Sriramesh et al. (2009), the term
of CC overlaps largely with the concept of CSR. The author noticed that the parameter of CC is
identical to what CSR comprises. Additionally, another scholar Matten et al. (2003) described
CC as a successor to CSR. As a contrary to the above-mentioned, Whitehouse (2003, p.299)
identifies that “Corporate citizenship should be viewed, not as a replacement for CSR, but as a
complement to it.” Nonetheless, the authors’ views aforementioned are subjective.
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3.0 EVOLVING NOTION OF CORPORATE SOCIAL RESPONSIBILITY
Form readings, transformation of CSR definition is undoubtedly related to the development of
CSR studies. Ample evidences show that CSR has evolved from 1950s until today.
3.1 Frederick’s Model
A leading scholar, Frederick, 2006 (cited in Lawrence and Weber, 2008) has developed four
evolving phases of CSR, as illustrated in Figure 1. The first phase is referred to as Corporate
Social Stewardship, which parallel to the Stewardship principle that contributed to the
explanation on how CSR began in the studies by Lawrence and Weber (2008). It is arguable that
the phases in Frederick’s model also included in Mohan’s model, however in different time
frame.
3.2 Mohan’s Model
Empirically illustrated by Mohan’s model cited in deBakker et al. (2005) as described in Figure
2, the latter model is begun with Business Ethics, and then Corporate Social Responsiveness in
year 1975.(cf. Frederick’s model) Nevertheless, both of the authors agreed that the new term of
Corporate Citizenship is begun since 1990s.
When looking at the two models, there is a missing gap in Frederick’s model. Frederick omits
the findings of the year 1970s to 1980s. In opposition, Mohan’s model fills the blind spot. The
author emphasises the CSR concepts throughout the years. Nonetheless, the emergence of the
numerous concepts is too complex and becomes a myriad. This implies that there are no
universal standard definitions of CSR. Various researchers use different terms in their studies
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and thus lead to different findings. For instance in deBakker et al. studies, the author did not use
the search terms, CC and corporate philanthropic in order to avoid conceptual ambiguity.
3.3 Carroll’s CSR Pyramid
Carroll’s CSR pyramid (1991) provides further explanation of CSR development as shown in
Figure 3. The model is often quoted in literature. (E.g. Sriramesh et al., 2009; Maignan and
Ferrell, 2004) However, the model is fit to the circumstances in 1990s and obsolete for today
global world. Therefore, by the same model, Carroll integrated the concept of stakeholders in
year 2004. Empirical evidences support the usefulness of the model. (CSRQuest, 2009) On
contrary, Visser (2005) argued that Carroll’s model has limitations that not appropriate for all
circumstances, as the author use Africa context as debate.
The models aforementioned are useful and essential to explicate the development of large
corporations in pursuing CSR. In the past, corporations are emphasised on environmental and
social CSR that concerns the society as a whole. Pragmatically illustrated by Coca-cola (HIV
program) and Nike (Nike’s Reuse-A-Shoe program) that supports this view. (Kotler and Lee,
2005) Nowadays, large corporations has transformed to practices global citizenship. Hockerts
and Morsing, 2009 building on Wood (1991) analysis, presenting a more updated detail, that
adds on global issues. Empirical examples also provided by the same author such as Novo
Nordisk that implementing DAWN program which takes considerations of global stakeholder
issue.
From the readings, hence, growth of CSR in large corporations comprises various factors and
issues. In this literature review, the two main issues which are economic approach and
stakeholder theory will be discussed in later sections.
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4.0 ECONOMIC APPROACH
The main role of business is to maximize profits. This conventional fact is supported by Adam
Smith, 1863 (cited in Lantos, 2001) and Nobel laureate economist Milton Friedman (1970).
Therefore, the concern of profits creates a debate between CSR and Corporate Financial
Performance (CFP). A study by Aupperle et al. (1985) stated there was no relationship between
social responsibility and profitability. Nevertheless, this study is published in 1980s, which is
obsolete and no longer relevant.
There are other more recent studies that in contradiction, which showed positive relationship
between CSR and CFP. (Pedersen and Neergaard, 2007; Kotler and Lee, 2005; Baue, 2002)
Overall, there is no conflict between CSR and maximizing shareholder value, and hence
encouraging large corporations to pursuing CSR. For instance, Chiquita adopting CSR that
practising pallet recycling program, are saved more than $3 million annually and lead to good
financial performance. (Kotler and Lee, 2005)
Nonetheless, the studies and surveys can be questioned in that the costs and benefits are hard to
measure as it is differ among companies and industries. The methodology and approaches used
in the studies may vary as well, which could have confounded the results. Furthermore, even
though empirical researches show the relations between two variables, there is a possible
confusion between the correlation and causation. It is arguable that whether CSR activities
contributed to superior financial performance or vice versa.
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5.0 STAKEHOLDER THEORY
Likewise abovementioned, corporation’s objective is to maximize profits. This implies that the
organisation is responsible to the shareholders. Originator of stakeholder theory, Freeman (1984)
stated, however, corporations must also attend to the interests of stakeholders. The reason is
business depends on the stakeholders to operating and for its continued survival, which referred
to as resource-dependence theory. Hence, corporations engage in CSR activities to satisfy and
benefit all stakeholders, in order to obtain their supports to the business. (Maignan and Ferrell,
2004) Nonetheless, all this tends to demonstrate that contrary to business ethics and altruistic
moral.
5.1 Business Ethics
Another Friedman’s view is if the organization pursuing philanthropic contributions to maximize
the firm’s market value, it should not be given the label of social responsibility, but as another
corporate strategy. (Baron, 2003) Consequently, there is ambiguity and vagueness that CSR
practices should maximize the firm’s value to shareholder, or overall emphasises on the benefits
of all stakeholders, in altruistic motive. Therefore, every corporation have different perspectives
on CSR and seems paradoxical (Campbell, 2006), and this lead to the development of CSR
practices in the large corporations. Some corporations perceive CSR as strategy that integrated to
management framework in these days. (Katsoulakos and Katsoulakos, 2007; Burnell, n.d.)
Moreover, large corporations today shifted to corporate citizenship such as ExxonMobil, Ford,
Nike, Nokia and Toyota. (Lawrence and Webber, 2008)
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6.0 CONCLUSION
This literature review intends to provide the review of the empirical works done by eminent
researchers and scholars in the topic of CSR. Numerous authors have different scrutiny and
perspectives on the issues of CSR, and thus created questions and arguments. Consequently, the
concern of this literature review is to recapitulate their views and clarify the issues, which
emphasises on three parts aforementioned. In nutshell, Table 1 in Appendix provides a summary
of this literature review that presents a clearer picture of the researches conducted.
WORD COUNT: 1497
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7.0 REFERENCES AND BIBLIOGRAPHY
Books
1. Baron, D.P., 2003. Business And Its Environment . 4th ed. New Jersey: Pearson Prentice
Hall.
2. Bowen, H.R., 1953. Social Responsibilities of the Businessman. New York: Harper &
Row. p.6.
3. Carroll, A.B., 1979. A three-dimensional conceptual model of corporate social
performance. Academy of Management Review, 4, pp. 497-505.
4. Clarkson, Max B.E., 1995. A Stakeholder Framework for Analyzing and Evaluating
Corporate Social Performance. Academy of Management Review, 20 (1), pp. 92-117.
5. Freeman, R.E., 1984. Strategic management: A stakeholder perspective, Englewood
Cliffs, NJ: Prentice Hall.
6. Kotler, P. and Lee, N., 2005. Corporate Social Responsibility: Doing the most good for
your company and your cause. New Jersey: John Wiley & Sons.
7. Lantos, G. P., 2001. The boundaries of strategic corporate social responsibility. The
Journal of Consumer Marketing, 18 (7), pp. 595-639.
8. Lawrence, A.T. and Weber, J., 2008. Business and Society: Stakeholders, Ethics, Public
Policy. 12th ed. New York: McGraw Hill.
9. Matten, D. et al., 2003. Behind the mask: Revealing the true face of corporate citizenship.
Journal of Business Ethics, 45 (1-2), pp. 109-120.
10. McWilliams, A., and Siegel, D., 2001. Corporate social responsibility: A theory of the
firm perspective. Academy of Management Review, 26 (1), pp. 117-127.
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11. Pedersen, E.R. and Neergaard, P., 2007. The Bottom Line of CSR: A Different View. In
Hond, F.D. et al., ed. Managing Corporate Social Responsibility in Action: Talking,
Doing and Measuring. Hampshire: Ashgate, 2007, pp. 77-91.
12. Post, J.E., 2000. Meeting the Challenge of Global Corporate Citizenship. Center
Research Report. Chestnut Hill, MA: Boston College Center for Corporate Community
Relations. p.8.
13. Whetten, D.A. et al., 2002. What are the responsibilities of business to society? In A.
Pettigrew, H. Thomas,&R. Whittington, ed. Handbook of strategy and management.
London: Sage. pp. 373-408.
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Online Sources
1. Aupperle, K.E. et al., 1985. An Empirical Examination of the Relationship between
Corporate Social Responsibility and Profitability. The Academy of Management Journal ,
[online]. 28 (2), pp. 446-463. Available from: http://www.jstor.org/stable/256210 [cited
18 October 2009].
2. Baue, W., 2002. Business Ethics' 100 Best Corporate Citizens Outperform S&P 500.
[online]. Available from: http://www.goodcorporatecitizen.com/beinggood.html [cited 18
October 2009].
3. Burnell, S.H., n.d. Corporate Social Responsibility: The Business of Every Company.
[online]. Available from: http://www.forbescustom.com/DiversityPgs/CSRBusinessof
EveryCompany.html [cited 18 October 2009].
4. Campbell, J.L., 2006. Institutional Analysis and the Paradox of Corporate Social
Responsibility. American Behavioral Scientist , [online]. 49 (7), pp. 926-937. Sage.
Available from: http://abs.sagepub.com/cgi/content/abstract/49/7/925 [cited 7 October
2009].
5. CSRQuest, n.d. Carroll’s CSR Pyramid. [online]. Available from:
http://www.csrquest.net/default.aspx?articleID=13124&heading=[cited 18 October
2009].
6. deBakker, et al., 2005. A Bibliometric Analysis of 30 Years of Research and Theory on
Corporate Social Responsibility and Corporate Social Performance. Business & Society,
[online]. 44 (3), pp.283-317. Sage. Available from: http://bas.sagepub.com/cgi/content/
abstract/44/3/283 [cited 6 October 2009].
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7. Friedman, M., 1970. The Social Responsibility of business is to increase its profits. New
York Times Magazine. [online]. pp.32 -33. Available from: http://www.goodyear.com.my
/social_responsibility.html [cited 6 October 2009].
8. Hockerts, K. and Morsing, M., 2009. A literature Review on Corporate Social
Responsibility in the Innovation Process. Copenhagen Business School (CBS), Center for
Corporate Social Responsibility. [online]. pp. 4-7. Available from:
http://www.designforum.fi/files/dff/Projektit/Literature_review_on_CSR_driven_innovat
ion.pdf [cited 27 September 2009].
9. Katsoulakos, T. and Katsoulakos, Y., 2007. Strategic management, corporate
responsibility and stakeholder management integrating corporate responsibility principles
and stakeholder approaches into mainstream strategy: a stakeholder-oriented and
integrative strategic management framework. [Online]. 7(4), pp.355-369. Emerald.
Available from http://www.csrquest.net/uploadfiles/4CR%20C2.pdf [cited 20 October
2009].
10. Maignan, I. and Ferrell, O.C., 2004. Corporate Social Responsibility and Marketing: An
Integrative Framework. Journal of the Academy of Marketing Science, [online]. 32 (1),
pp. 3-19. Sage. Available from: http://jam.sagepub.com/cgi/content/abstract/32/1/3 [cited
7 October 2009].
11. Sriramesh, K. et al., 2009. Corporate Social Responsibility and Public Relations:
Perceptions and Practices in Singapore. [online]. Available from:
http://www.allacademic.com/meta/p91926_index.html [cited 27 September 2009].
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12. Visser, W., 2005. Revisiting Carroll’s CSR Pyramid: An African Perspective. [online].
Available from: http://www.waynevisser.com/chapter_wvisser_africa_csr_pyramid.pdf
[cited 15 October 2009].
13. Whitehouse, L., 2003. Corporate Social Responsibility, Corporate Citizenship and the
Global Compact: A New Approach to Regulating Corporate Social Power? Global Social
Policy, [online]. 3 (3), pp. 299-318. Sage. Available from: http://gsp.sagepub.com/
cgi/content/abstract/3/3/299 [cited 7 October 2009].
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8.0 APPENDIX
Phases of Corporate Social Responsibility
CSR 1
1950s – 1960s
Corporate Social Stewardship
Corporate philanthropy – acts of charity
Managers as public trustee – stewards
Balancing social pressures
CSR 2
1960s – 1970s
Corporate Social Responsiveness
Social-impact analysis
Strategic priority for social response
Organizational redesign and training for responsiveness
Stakeholder mapping and implementation
CSR 3
1980s – 1990s
Corporate / Business Ethics
Foster an ethical corporate culture
Establish an ethical organizational climate
Recognize common ethical principles
CSR 4
1990s – 2000s
Corporate / Global Citizenship
Stakeholder partnerships
Integrate financial, social, and environmental performance
Identify globalization impacts
Sustainability of company and environment
Figure 1 Evolving Phases of Corporate Social Responsibility
Source: Adapting form William C. Frederick, 2006. Corporation Be Good! The Story of Corporate Social Responsibility. (Cited in Lawrence and Weber, 2008, p.59)
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Figure 2 Developments in CSR-related Concepts
Source: Mohan, 2003. Strategies for the management of complex practices in complexorganizations: A study of the transnational management of corporate responsibility . (Cited indeBakker et al., 2005, p. 288)
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Figure 3 Carroll’s CSR Pyramid
Source: CSRQuest, 2009. Available from: http://www.csrquest.net/default.aspx?articleID=1
3124&heading=
Table 1 Summary of literature review
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Topic Statement/ Citation/ Comments/ Arguments References
Definition of
CSR (The term
broad society has
altered tonarrowed term of
stakeholders)
CSR as the obligation “to pursue those policies, to make
those decisions, or to follow those lines of action which
are desirable in terms of the objectives and values of our
society.”
Bowen (1953,
p.6)
The social responsibility of business encompasses the
economic, legal, ethical, and discretionary expectations
that society has of organizations at a given point in time.
Carroll (1979,
p.500)
Actions that appear to further some social good, beyond
the interests of the firm and that which is required by
law.
McWilliams and
Siegel (2001,
p.117)
Societal expectations of corporate behavior; a behavior
that is alleged by a stakeholder to be expected by society
or morally required and is therefore justifiably demanded
of a business.
Whetten et al.
(2002, p.374)
Definition of
global corporate
citizenship (CC)
Global corporate citizenship is the process of identifying,
analyzing, and responding to the company’s social,
political, and economic responsibilities as defined
through law and public policy, stakeholder expectations,
and voluntary acts flowing from corporate values and
business strategies. Corporate citizenship involves actual
results (what corporations do) and the processes through
which they are achieved (how they do it).
Post (2000, p.8)
The term of CC overlaps largely with the concept of
CSR, and the parameter of CC is identical to what CSR
comprises.
Sriramesh et al.
(2009)
Corporate citizenship is a successor to corporate social
responsibility.
Matten et al.
(2003)
Corporate citizenship should be viewed, not as areplacement for CSR, but as a complement to it.
Whitehouse(2003, p.299)
Frederick’s CSR
model
Comprises four simple phases that begun since 1950s.
Nevertheless, the model is not complete that omits the
findings in year 1970s – 1980s. This model is useful as
Lawrence and
Weber (2008)
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general guidelines to understand the evolvement of CSR.
Mohan’s model Mohan’s model fills the blind spot of Frederick’s model.
It is more convincing than the first model since it shows
the evolvement throughout the years. However, the
model comprises too many terms that lead to more
complicated and become myriad.
deBakker et al.
(2005)
Carroll’s CSR
Pyramid
Carroll provides a clearer hierarchy of CSR that
performed in a pyramid. The earliest model was in 1970s
and reformulated in year 1991 and 2004. This is due to
the changes and development of circumstances and
globalization.
CSRQuest
(2009)
Visser critics the Carroll’s CSR pyramid as the model didnot fit to all contexts, as he uses Africa context to support
his arguments.
Visser (2005)
Economic
Approach
The main role of business is to maximize profits and
market value.
Smith (1863);
Friedman (1970)
CSR and CFP relationship:
CSR practices did not have any relationship with the
corporation’s financial performance.
There are studies shows the positive relationship between
CSR and financial performance.
Aupperle (1985)
Pedersen & Neergaard
(2007); Kotler
and Lee (2005);
Baue ( 2002)
Stakeholder
Approach
Corporations engage in CSR activities to satisfy and
benefit all stakeholders, in order to obtain their supports
to the business – resource-dependence theory
Maignan and
Ferrell (2004)
CSR strategy that aim to maximize market value should
distinguished from altruistic or morally CSR.
Friedman (1970)
Some corporations perceived CSR as strategy that
integrated to management framework in these days.
Katsoulakos
(2007)