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The Pursuit of Strategic CSR

Rethinking Capitalism in developing Countries

Written by Elin Bornefalk, Andreas Hult

Paper category

Master Thesis

Subject

Business Administration>General

Year

2012

Abstract

Master Thesis: The concept of corporate social responsibility There is no uniform definition of corporate social responsibility. This depends on the demographic, political, and moral (ethical) background of the individual or organization providing the definition (Campbell 2007). In other words, when it comes to corporate social responsibility and corporate social responsibility, there are endless explanations of their meaning, so it is difficult to understand the true meaning of corporate social responsibility and its meaning in practice (Grankvist 2009). Criticism has always been directed at the concept of corporate social responsibility. The reason for this is that it only includes the social aspects of the short form of corporate social responsibility. Critics believe that this is an imperfect place that needs to be misunderstood. As a result, the use of this concept is shifting to the more inclusive term sustainability, which includes social issues and environmental aspects. However, CSR is used in a wider range and is the most commonly used term (Granqvist 2009). All in all, the concept of corporate social responsibility deals with social, environmental and economic responsibilities on a voluntary basis, which goes beyond the scope of the law in a business environment (Heslin & Ochoa 2008).  Social responsibility deals with issues related to how the company runs its business. In a certain way, it portrays a good social corporate citizenship while taking into account the health and well-being of other members of the society, whether they are employees, workers of subcontractors, or as business partners or consumers Relationship (Grankvist 2009). Environmental responsibility involves how to run a business in a sustainable way that will not have a negative impact on the world in the long run (Grankvist 2009). Obligations to its stakeholders and shareholders. Ensure the stability of financial capabilities and provide returns for investors' investments (Grankvist 2009). Together with these three aspects, another dimension often mentioned in the literature is the ethical aspect of corporate social responsibility (Carrol 1991). The ethical dimension influences strategy and decision-making. Moral responsibility is about meeting moral expectations and social obligations. Ethical decision-making is based on a set of core values ​​that help guide the company's decision-making, for example when it comes to environmental sustainability or social issues (Granqvist2009). Previous studies have found that responsible behavior and ethical views within companies and the values ​​of founding entrepreneurs/owners/managers of SMEs usually reflect the company’s attitude towards corporate social responsibility. 3.2 The evolution of the concept of modern corporate social responsibility For a long time, practitioners and academic circles have been introducing the corporate social responsibility pyramid of Carrols (1991) when they talked about corporate responsibility to society. Carrol (1991) through his corporate social responsibility pyramid proposed that economic responsibility is the basic foundation of corporate social responsibility, followed by legal, moral, and charitable (discretionary) responsibilities. This model has a good foundation in the past, but we cannot escape the fact that society and attitudes towards CSR have changed. In addition, this way of looking at CSR has been criticized for many years, especially Lantos (2001) and Porterand Kramer (2006). Survival is not something that must be expressed in the concept of corporate social responsibility. Lantos (2001) further criticized and pointed out that even ethical CSR should be an obligation of the enterprise, which means that no organization should cause social harm. However, these incitements to cooperation are important, so the strategic CSR views have gained more recognition and attention in the past few years (Porter & Kramer 2006). For decades, corporate social responsibility has been a topic of endless debate, whether it is good or bad for the company, people have been arguing. Friedman (1996), one of the well-known critics, believes that, for example, the only social responsibility of a company is to increase profits, and calls altruistic corporate social responsibility an illegal role of the company. Altruistic corporate social responsibility is a concept proposed by Lantos (2001) that combines strategic corporate social responsibility to further develop the concept of charitable responsibility. This is to distinguish CSR activities with non-profit motives and CSR activities with profit motives. Altruistic CSR stands for non-profit CSR activities, while strategic CSR stands for CSR activities with profit motives. In recent years, inspired by the way of thinking of Lantos (2001), Jamali (2007) has developed a new corporate social responsibility pyramid, not only in terms of corporate social responsibility strategies and altruistic views, but also in that moral responsibility should be the obligation of public enterprises aspect. With these ideas and the pyramid of Carrol (1991), Jamali (2007) established a model that divides the pyramid into mandatory corporate responsibility and voluntary corporate social responsibility. The latter is divided into strategic responsibility and altruistic responsibility. Unlike the CSR pyramid of Carrol (1991), this model shows the mandatory and voluntary behavior of the company, rather than the hierarchical steps of responsibility. Read Less