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CSR and CSV

The Managerial Interpretation of a Blurry Line

Written by R. Akundwe, V. Salihagic

Paper category

Master Thesis

Subject

Business Administration>General

Year

2018

Abstract

Master Thesis: Defining CSR CSR has been a hot topic for a long time. A more modern way of looking at this concept began in the 1950s, when Howard R. Bowen published his book "The Merchant's Social Responsibility" in 1953. Bowen claims that the largest companies can influence the social life around them only by the power of their actions and decisions. He defines social responsibility as follows: "It means that businessmen are obliged to pursue those policies, make those decisions, or follow those courses of action that are desirable in terms of the goals and values ​​of our society" (Carroll, 1999: 270) . The concept of CSR has been discussed since the 1950s, and over the years, it has led to many different definitions and views on the concept. Therefore, the concept of CSR is very broad, without clear boundaries or definitions. Today, the vocabulary surrounding corporate social responsibility covers a range of different concepts, such as sustainability, accountability, and corporate citizenship, just to name a few (Frynas & Yamahaki, 2016). Therefore, the concept of corporate social responsibility is more like a general term, emphasizing responsible actions taken by enterprises (Frynas & Yamahaki, 2016). As Marrewijk (2003:96) quoted, social responsibility "means something, but not the same, to everyone." Governments, NGOs, and companies are all biased towards corporate social responsibility and focus on how this concept aligns with their specific interests (Marrewijk, 2003). The same problem is also obvious in academia, and the academic community's views on CSR vary according to the disciplines in which it is analyzed. Each of them has their own biases, methods and normative agenda to guide them in understanding this concept (Sheehy, 2015). For example, if you look at the business community, one of the more traditional and long-term perspectives on corporate social responsibility comes from a study done by Carroll (1999), which describes corporate social responsibility related to the following four types of responsibilities: economic, Law, ethics and charity. The description can be seen as a pyramid, where the economic part is at the bottom, followed by the legal, moral, and charitable parts. Carroll (1999) believes that “CSR companies should strive to be profitable, abide by the law, be ethical, and be a good corporate citizen”. The general view of corporate social responsibility is understood as giving back to society and taking responsibility (Wojcik, 2016). 2.7 Distinguishing between CSV and CSR Although many scholars and business practitioners have put forward various arguments, there is still a lot of confusion and debate about the difference between CSV and CSR. According to an interview conducted by Michael Porter in 2012, Moore (2014) proposed that corporate social responsibility “fundamentally means acquiring resources from enterprises and investing these resources in becoming good corporate citizens: Donate to social causes, report on social and environmental impacts, and involve employees in community work". On the contrary, some people suggest that CSV "is designed to change the way the core business operates-strategy, people, process, and rewards to achieve triple bottom-line returns." As mentioned above, the main difference is that CSR activities are separated from business, while CSV integrates social and environmental issues into the business itself, thereby driving economic value (Moore, 2014). According to several academics, some companies still consider CSR activities as a representative of social and environmental issues to reduce profits (Bosch-Badia, Montllor-Serrats, and Tarrazon, 2013). As mentioned earlier, different from corporate social responsibility, CSV deals with social problems in a way that creates economic profits for the company, while also solving related social problems (Porter & Kramer, 2011). In addition, some people claim that CSV is not for good deeds, nor is it a charitable cause like organizing CSR activities. Consistent with this, it can be said that the basic and driving concept of CSV is that there are a large number of business opportunities that can meet social needs and create final product value for the company and society (Moore, 2014). In addition, corporate social responsibility practices are mainly driven by external pressures. For example, if a stakeholder group starts lobbying to eliminate hunger-related problems in third world countries, the company will suddenly invest in programs to help eliminate hunger in order to improve Its legitimacy. In summary, we concluded that CSV should be about expanding and sharing the value created between the company and related society, rather than just creating value for society like CSR. Nevertheless, it is important to be critical in the way we deal with the differences between these two concepts. This is because some people think that CSR can also involve business cases, so it is not entirely accurate to say that CSR only contributes to society (Abdulrazak & Amran, 2018). Read Less