Background of Corporate Social Responsibility (CSR)
Nowadays, almost the businesses in the world concern about their external factors to sustain and develop their mission to society, economics, and environment. To achieve the goals of business and represent the responsibilities, entrepreneurs and leaders of companies defined corporate social responsibility (CSR) is as a method to solve issues relating to society and environment. In 1953 Bowen defined that CSR is the obligation to make decisions as long as they satisfy the value and objectives of society (Bowen 1953).Started from 1900s to 2000s CSR was an important strategy in the businesses and was a part of business in global (Moura‐Leite 2011). With the development of globalization in 2000s CRS evolved as strategy to support the target of citizenship without border and became the instructor for the European Commission to achieve the sustainability, innovation and competitiveness of EU (Gheribi 2017).
Researches and Identifications of CSR
Throughout the main milestones, Corporate Social Responsibility (CSR) is a valuable initiative evolving to be suitable with the changes of model of corporation and society globally. Especially to understanding about CSR and the impact of it to the corporations and some critical issues within CSR theory and practices by replying the question whether CSR has positive deeds and better results for businesses, which leads to corporations have become more serious about addressing CRS into corporation’s behavior and seems it as “social license” to commitment with the stakeholders. The content would be clarified by the critical literature review below by applying through: the case study of Mc Donald‘s behaviors, accountability of stakeholders and general view in terms of political and critical. They represent the CSR under different aspects of business and society in account of relationship and the impact between of them. Base on that, we are able to assess the research on critical literature review, which implied the purpose to present the corporation’s behaviors whether they are positives by the responsibility of stakeholders and encourage the innovative of CSR for corporation sustainability and social problems in the world.
Under the business case method, the review would apply the case study of business to assess the deeds of corporation by complying with CSR. That means that businesses correctly identify and minimize risks and prevent bad behavior, shareholders will gain more benefits by creating market share value in reputation, innovation and employee motivation. Moreover, some shareholders will realize that if the company costs a lot to mitigate organizational threats that limit its interests and become a reluctant business process. It has the potential to cause conflicts between economic and social goals within the company. As mentioned above, Mc Donald’s behaviors changes are outcomes of research in CSR review. For example, company did surveys research to target the CO2 target ECO actions and life cycle assessment under the customers. With the employees, they complied with the global performance training or diversity survey. On the other hands, to present their concerns about the society they addressed the public affairs and got more involvement in the society by SCA’s dialog and assure the supply chain to the supplier stability or analysis the risk in corporation to sustain the capital of shareholders (Donald 2013). This corporation put more efforts and emphasized on the CSR goals. On the other hand, in the regulatory aspect, businesses have the role of a volunteer in the legal system because it can avoid legal risks and amend the law in the future. In general, the business case approach exposes a two-sided picture in the context of increasing the value of the company by practicing CSR or is costly to comply with this type of soft law, which affects the benefits of shareholders in a limited way. The original view of the business case is factual to be persuasive in the current market and society, so the business case approach about the close relationship between CSR and shareholder value has be interested in approaching these practices effectively.
Second, the perspective of the responsibilities of the stakeholders clearly states that the CSR supports features in democratic society about transparency for stakeholders and management of business responsibility. It raises the question of the conflicting interests of stakeholders in sharing the value of an organization. Therefore, the business activities will be of interest to the parties concerned by understanding the operation of the corporation and its influence on related parties. In the discrepancy of the business case approach, the accountability of stakeholders considers the unique interests of individual stakeholders instead of sharing the same interests. Furthermore, this approach provides stakeholder groups with access, evaluation and debate with the business regarding benefits. CRS in the accountability of its stakeholders assists them in clarifying personal responsibility in the company’s mission based on the prescribed balance report to make decisions and supervision to prevent the Green wash phenomenon green-washing, meaning the company will use green advertising on their real value (Judith Wylie, Anne Marie Ward 2014). The group’s effective accountability is an empirical cause for the mutual benefit of stakeholders and businesses while the CRS applies. It is essential to have more information from an extended perspective, however, it will be criticized for suspicion of incomplete and inadequate information leading to debate about stakeholders about management and responsibility in annual sustainability reports.
An important theory is that the approach represents a substantive understanding of the responsibilities of stakeholders in the CSR process. That means there is doubt about the likelihood of stakeholder responsibilities in the democratic community. In the capitalist system, more and more industrialization has occurred, which has led to significant social and environmental impacts (Guido Palazzo, Andreas Georg Scherer 2008). It is the conflict of a praised development capitalism in the economic and political aspects of pluralistic society. Proponents with critical theoretical knowledge can understand the assurance of the relevant enterprise’s right to collect information and rely on diplomatic dialogue to propose rules such as soft law. The key theories that support in a different CSR standpoint on ordinary accounting are the concern for justice in society. There is an incomparable power between businesses and stakeholders because some companies have played a role of being responsible for their stakeholders, but only taking advantage of CSR’s reputation to exaggerate the image. Their photos on the market and social. The company that volunteered in corporate social responsibility overcame their practical strategy, it seemed that they were shaping themselves in the laws. According to CSR from a critical theoretical perspective, businesses should rely on civil society groups to tailor their agendas to justice and a balanced report to increase voice for stakeholders less powerful. Initiative to approach showing the obligation of businesses to society effectively. It is necessary to revise corporate social responsibility and social environmental reporting in the company’s operations to emphasize the responsibility of environmental sustainability and concern to their community. (Judy Brown, Michael Fraser, 2006).
Research value and implications
Corporate social responsibility has stimulated good behaviour in justice and concern for future generations by not only sustaining business ethics but also managing risks to prevent catastrophic change of climate, resource scarcity, human rights violations, financial crisis and corporate failure. Following a study by the Kenexa Institute of High Performance in London, it was announced that CSR-applying businesses would outperform those of companies no more than 19 times (Institute, 2011). Furthermore, CSR is a method of persuading companies to benefit their wealth and benefit related societies. According to James Epstein-Reeves – an expert on corporate social responsibility research, he emphasized positive changes in business operations to CSR’s commitment. First, CSR encourages many corporations to research and develop their products to become community-friendly with the environment and community health such as eco-laptops or possible product lines decompose. Based on CSR, the company will save resources and energy in production and performance, resulting in lower capital constraints, improving profitability to meet the goals of shareholders in the organization. The advantage of committing CSR to beating competitors is the competitive industry’s significant decision, which is a way to differentiate the company’s brand. Moreover, the overall of the competition will benefit customers and society as a consistent chain of influence of economic and social sectors. This is one of the main features to engage customers and employees in the company when compared to the strategy of starting or promoting the brand. CSR is using it to ensure the long-term survival of the company under the impact of globalization and climate change. However, there is a disadvantage when the CSR accreditation organization is overstated for financial goals, resulting in a loss of company profits. Sometimes businesses will spread when running an important CSR strategy with its values and goals. The relationship between financial performance and social responsibility needs to be strengthened to enhance the value of the organization by innovating sustainable CSR programs. The reason is that business managers in the form of social groups do not work in the CSR system because of inconsistent participation. Although CSRs are not within the laws of the country, they are recognized as a standard of economic globalization. Moreover, in the management position of a corporation, it is difficult to devise a strategy to adjust capitalism and responsibilities of stakeholders. CSR accounts need to be regrouped to enhance both the positive social and financial participation of the organization in order to be sustainable in the long run.
CSR is a perfect solution for businesses if the board and managers arrange these programs as an initiative for core strategies to make a profit. It is necessary to combine both of the above to prevent criticism and the nature of the responsibilities of real stakeholders by focusing on philanthropy, improving operational efficiency and tissue transformation of business model according to research of Harvard University on successful business (V. Kasturi Rangan, Lisa Chase, Sohel Karim, 2015). Actually, cage companies are implemented to implement CSR, but they are important additions to create opportunities for development and integration of internal and external environments. In the future, by accessing the three approaches above, we can say that it will be an effective operation for the organization to revise business models related to society, environment and platform. Internally, it must be aligned with the core purpose of cooperation to prevent risks in volatility. Moreover, CSR is a solution to the shortage while the economic market is within the political framework of the judicial system of organizations involved. CSR is a special type of soft law that binds internationalization and globalization in response to supporting NGOs effectively and effectively in the mechanism of self-commitment to social and environmental responsibility school.
- Bowen, H. 1953. Social Responsibilities of the Businessman. New York: Harper and Row Press.
- Donald, Mc. 2013. Corporate Mc Donald . https://corporate.mcdonalds.com/content/dam/gwscorp/scale-for-good/2012_2013_csr_report.pdf.
- Epstein-Reeves, James. 2012. Six Reasons Companies Should Embrace CSR. February 21. https://www.forbes.com/sites/csr/2012/02/21/six-reasons-companies-should-embrace-csr/#4ff7611f3495.
- Gheribi, E. 2017. ” Corporate social responsibility in gastronomy business in Poland on selected example.” European Journal of Service Management 13-20.
- Guido Palazzo, Andreas Georg Scherer. 2008. “Corporate Social Responsibility, Democracy, and the Politicization of the Corporation.” Academy of Management Review.
- Institute, Kenexa High Performance. 2011. Kenexa study finds tangible link between CSR and bottom line business success. Jun 14. http://www.onrec.com/news/news-archive/kenexa-study-finds-tangible-link-between-csr-and-bottom-line-business-success.
- Judith Wylie, Anne Marie Ward. 2014. “CSR REPORTSGOODNESS OR GREENWASH?” In ACCOUNTANCY IRELAND.
- Judy Brown, Michael Fraser. 2006. “Approaches and perspectives in social and environmental accounting: an overview of the conceptual landscape.” In Business Strategy and the Environment, 103-117.
- Moura‐Leite, R. and Padgett, R. 2011. “Historical background of corporate social responsibility.” Social Responsibility Journal 528-539.
- V. Kasturi Rangan, Lisa Chase, Sohel Karim. 2015. The Truth About CSR. https://hbr.org/2015/01/the-truth-about-csr.
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