Corporate Social Responsibility

The rise of socially responsible and transparent business principles

Corporate Social Responsibility (CSR) has grown to become a matter of increasing concern and relevance in today’s business economy, wherein the vision to promote transparent business accountability to major stakeholders as well as sustainable business practice within the operating environment, is now of unprecedented importance. Whilst discussions and definitions pertaining to CSR are diverse and not always coherent, matters of business accountability and sustainability are not only inherent but consistently paramount; for they bring to light a series of common themes and concepts, known as the ‘Triple Bottom Line,’ that have considerable and demonstrable resonance for contemporary business practice. This paper will examine the ways in which CSR has developed over time by providing a narrative on the nature of business accountability and sustainability and of the elements of the Triple Bottom Line that influence the legitimacy, validity and effectiveness of CSR in contemporary business practice.

Often associated with the term ‘enlightened self-interest,’ CSR is a business model that aides how a business and or organisation plans, establishes and maintains its relationship with its key stakeholders.[1]  Put simply, it is the relationship between business and society; namely an organisation’s defined responsibility to the society in which it operates and the key stakeholders therein.

Whilst definitions of CSR are numerous, one quote I find particularly relevant when discussing the application of CSR for best business practice, is the following:

Corporate social responsibility is a commitment to improve community well-being through discretionary business practices and contributions of corporate resources.[2]

Reference to ‘commitment’ is here crucial, for it emphasises a business’ choice to implement the best practices possible in order to be considered socially responsible whilst working toward the betterment of ‘community well-being,’ be it economic or environmental. Perhaps the key point to be taken from this particular definition is that CSR is the development of competencies and capabilities required to better link business approach with the needs, wants and varying circumstances of its stakeholders.[3]

Given that contemporary society is developing and transitioning in perpetuity, organisations have had to find a way to respond to the resulting evolution of the interface between their business models and the society in which they operate.[4] In the past decade, CSR has developed as a corporate concept; as an integral facilitator of innovation and social renewal.[5] Whilst the longstanding primary relationship feature between a business and its society is an economic one, rapidly increasing widespread global public concern about the social and environmental impacts of economic growth, has led to the revision of many government, corporate and non-for-profit organisations’ business models and practices.[6]

Looking back, the concept of CSR perhaps first found validity in the 1920s, with the rise of business moguls who sought success through greed and absolute control.[7] Subsequent decades have seen war; the rise of democracy; social activism; the galvanisation of heightened public awareness by way of the internet and perhaps most significantly, a shift in power and efficacy from the public to the private sector: with 37 of the world’s top 100 largest economic entities rooted in the hands of CEOs and corporate boards instead of presidents and parliaments.[8] Emerging therefore is an image of a global society in transition.[9] With an enormous concentration of wealth and power now in the hands of corporations, the global community have seemingly come to consider businesses as being the facilitators of solution instead of governments; as being the body of power held accountable to solve current and ongoing social, economic and environmental issues.[10] The concept of accountability will be expanded upon latterly in the paper. The simple fact is the future of economic development, is becoming more and more intrinsically linked with the development of social and environmental (natural) capital.[11] In order for organisations to cope with their newfound roles and responsibilities in our evolving contemporary society, CSR and all that it encompasses, has found validity.

Two key themes arise from the analysis of CSR; sustainability and accountability. Sustainability as a desired outcome of applied CSR, found its importance in the 1980s.[12] It means ‘capable of being upheld or defended’[13] and has grown to become a delineating keyword in an overwhelming array of social and environmental causes. Globalisation, pollution and the development of technologies have all brought the concept of sustainability to the forefront of corporate governance.[14] It has thus become a term that encompasses an array of business concerns; in particular worker’s rights, consumer protection, corporate governance, the impact of business behaviour on hunger, poverty and human rights and perhaps more focally, the impact of all of these on business profit and economic development.[15]

It is perhaps important at this point to introduce the term, ‘The Triple Bottom Line.’ A metaphor commonly used to yield qualitative results on a company’s sustainable efforts, it measures an organisation’s impact on the world on a social, economic and environmental level.[16] Measured on either a positive or negative scale, the Triple Bottom Line exposes an organisation’s success or failure to create value for its stakeholders and greater society.[17] Considered therefore to be reflective of more than good corporate citizenship and business ethics, sustainability has over time, come to be a fundamental principle of smart management; for if you take into consideration its growing needs and obligations, sustainability measurable by the Triple Bottom Line theory, firmly establishes itself as the ’S’ in CSR, rendering it a necessary organisational application in today’s globally business economy.[18]

The second key theme upon which CSR is founded, is accountability. In order to be sustainable, organisations must prove their accountability, their responsibility, to their stakeholders. As aforementioned, as more and more demand is placed on organisations to ensure any negative social, environmental and economic impact is kept to a minimum, businesses must meet society’s demands by operating in a way that reflects their ability to do so.[19] Generally held to mean ‘the ability to give an account of something to somebody who has interest in it,’[20] corporate accountability may be considered the ‘R’ in CSR; referencing an organisation’s duty to report positive information to its stakeholders. However not only is does it pertain to a company’s relationship with is stakeholders, but it must be also seen as an integral process of implementing all aspects of triple bottom line sustainability.

The successful application of CSR can greatly affect an organisation’s reputation by differentiating them from their competitors as being socially responsible.[21] Whilst as discussed earlier, ‘social’ is to be considered to pertain to an organisation’s sustainability and ‘responsibility’ to its accountability, ‘corporate’ refers to an organisation as a whole, as a singular entity and the image it projects.[22] The purpose of public relations with reference to CSR is to shape an organisation’s deliberate communications with its stakeholders and general publics to solidify a favourable reputation. It is

…An instrument of management by means of which all consciously used forms of internal and external communications are harmonised as effectively and as efficiently as possible, so as to create a favourable basis for relationships with groups, upon which the organisation is dependent.[23]

It furthermore is considered to

…Affect an entire organisation…It does so in a proactive way by deploying and managing strategies with the aim of reducing the gap between how the various internal and external publics of an organisation view it and how the organisation would like to be viewed by those publics.[24]  

In order to prevail, an organisation must rely on its public relations’ proactive, symmetric strategies both internal and external, to successfully influence and persuade target publics that its operations are not only socially responsible, but that the corporate body will be able to uphold their accountability for any impact of said operations.[25]  The objective for public relations in this instance is therefore to foster and maintain a sense of organisational transparency; to nurture a sense of trust within its target publics and prove that the organisation is managing to successfully uphold CSR as a management model. In a world where the global marketplace offers consumers more option to make independent, self-interested choices based on criteria beyond price and accessibility, an organisation’s ability to promote fair and sustainable business practices is paramount to success.[26]

Increasingly, companies and major organisations are doing all they can to address and implement CSR principles. They are doing so by adapting and conducting discretionary business practices and investments, that support social expectation and improve community well-being;[27] some examples of which are in the revision of policies and development programs, the evaluation of individual programs’ environmental and social performance outcomes and the publication of annual sustainable development reports.[28] In so doing, companies are beginning to display differing levels of understanding of and commitment to CSR. Thus far, a number of differing levels of corporate attitude toward CSR principles based on varying degrees of strategic rationale have been displayed:[29]

  • Self-protective: Denying practices, outcomes and responsibility
  • Reactive: adopting a policy-based compliance approach
  • Responsive: progressively entrenching societal issues into core management processes
  • Defining: promoting wide-scale implementation of and participation in CSR principles and practices.

Among the many companies to have successfully applied CSR as a management model by adopting a reactive, responsive and defining approach is IBM. Since its founding 100 years ago has sought to implement a number of CSR principles to its business practices. IBM asserts that ‘to achieve long-term success, you have to manage for the long term.’[30] Each year the company releases a CSR report wherein they summarise and evaluate their CSR activities and applications over a 12 month period. Furthermore, IBM has made the commitment to apply their technology to assist in solving societal needs, including community economic development, education, health, literacy, language and culture.[31] This commitment to the application of CSR principles is

…fostered throughout the company, led by senior management, which is ultimately responsible for our economic, environmental and societal performance…the IBM board, its committees and our CEO regularly review performance and accountability.[32]

Their values are to commit to and achieve

  • Dedication to every client’s success
  • Innovation for the company and their society
  • Trust and personal responsibility in all relationships

Looking back over this paper and the principles of CSR analysed, it is clear to firmly establish IBM as a pioneering advocate of CSR. By way repeated and public statements of commitment to societal, environmental and economic and technological development, IBM has acknowledged their consequent commitment to applied Triple Bottom Line sustainability and transparent accountability. In so doing, they have not only fostered and maintained, but strengthened and nurtured a relationship and thus their reputation, founded on mutual trust, with their stakeholders and members of their global community.

On the other hand, bad corporate citizens may be considered to include tobacco companies, sweatshops, weapons manufacturers and environmental polluters.[33] Of the latter, companies who have quite famously failed to apply CSR principles to their organisational output, instead adopting a self-protective approach to the impacts they have caused (namely oil spills and chemical leaks) are[34]

  • Enron: demonstrated dishonourable business mismanagement and falsified financial performance
  • Exxon Valdez: failed to address stakeholders in a timely fashion following the 1989 oil spill. When the CEO did finally address the media, he blamed them for exaggerating his company’s ‘public relations disaster.’

As our global economy and social well-being (as defined earlier in this paper) continue to evolve whether for better or for worse, so too does the need for and definition of CSR. As such, arguments for and against the application of CSR as a management model are in constant debate. Arguments in support of CSR are founded upon ethical and instrumental rationales. Whilst ethicists argue that organisations are ethically obligated to behave in a socially responsible manner because it is morally correct, instrumental arguments in favour of CSR pertain to the rewards that socially responsible behaviour will bring;[35] i.e. strengthened reputation, improved working environment, enhanced productivity and increased economic return.[36] An argument against CSR is the efficiency of being able to turn policy into action and at what cost.[37] Consider also if stakeholders have conflicting requirements and desired outcomes to the organisation; i.e. mining and resource companies who must consider indigenous communities amongst their major publics.[38] Another argument against CSR is that if it is merely a matter of ‘enlightened self interest, why would anyone need to devote any effort to understand it or urge others to pursue it?’[39]

In keeping with the three objectives of this paper outlined at the beginning, it remains to be said that a business cannot operate without its stakeholders and its greater community, just as the greater community cannot function effectively without business.[40] That said the current economic and financial crisis around the world has led to the revision of corporate strategic decisions on a large scale, to the extent that the application of CSR amongst the business community has created a whole new raft of pressures for organisations in what is now a demonstrably complex trading economic environment.[41] Roles, responsibilities and functions within organisations have had to adjust in order to seek a corporate vision that goes beyond older conventional, economic business strategy and perspective.[42] Overall CSR is regarded positively, yet this does not guarantee integration into existing business methods; for in contrast to existing and ever-increasing pressures placed on organisations, CSR as a necessary function is at times not deemed an urgent requirement and is instead branded as being ‘too vague and complicated’ for justifiable implementation.[43] Although CSR focuses on creating long-term sustainable businesses that reflect and benefit from a more socially-aware management approach,[44] the debate on CSR, its validity and necessity, despite its solid foundation, is still young.[45]

BIBLIOGRAPHY

Australian Centre for Corporate Social Responsibility (ACCSR), 2011. Defining Corporate Social Responsibility, ACCSR, South Yarra, Australia. Accessed May 28th, 2012. http://accsr.com.au/html/definecsr.html

Hawkins, David E. 2006. Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability. Palgrave MacMillan, Hampshire, United Kingdom.

Henriques, Adrian & Richardson, Julie. (eds.) 2004. The Triple Bottom Line: Does it All Add Up? Earthscan, Camden, London. United Kingdom

IBM, 2012. ‘Responsibility at IBM,’ http://www.ibm.com/ibm/responsibility, retrieved 28th May 2012

Idowu, Samuel O. & Filho, Walter Leal. (eds.) 2009.  Professionals’ Perspectives of Corporate Social Responsibility. Springer, Heidelberg, Germany.

Jones, Marc. 1999. Department of Business, Macquarie Business Research Papers, ‘Social Responsibility in Large and Small Firms.’  Macquarie University, Sydney, Australia.

Jonker, Jan &de Witte, Marco. (eds.) 2006. The Challenge of Organising and Implementing Corporate Social Responsibility. Palgrave MacMillan, Hampshire, United Kingdom.

Jonker, Jan &de Witte, Marco. (eds.) 2006. ‘Finally in Business: Organising Corporate Social Responsibility in Five’ in Management Models For Corporate Social Responsibility. Springer, Heidelberg, Germany.

Kotler, Philip, & Lee, Nancy., 2005. Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. John Wiley & Sons. Inc., New Jersey, United State of America.

Savitz, Andrew W. & Weber, Karl. 2006. The Triple Bottom Line. How Today’s Best-Run Companies are Achieving Economic, Social and Environmental Success, and How You Can Too. Jossey-Bass, San Francisco, United States of America.

Tench, Ralph & Yeomans, Liz. (eds.) 2009. Exploring Public Relations. Pearson Education, Essex, United Kingdom.


[1] Ralph Tench & Yeomans, Liz. (eds.) 2009. Exploring Public Relations. Pearson Education,Essex,United Kingdom. pg 97

[2] Philip Kotler & Lee, Nancy., 2005. Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. John Wiley & Sons. Inc.,New Jersey, United State ofAmerica. pg 3

[3] Jan Jonker &de Witte, Marco. (eds.) 2006. The Challenge of Organising and Implementing Corporate Social Responsibility. Palgrave MacMillan,Hampshire,United Kingdom. pg 7

[4] Jan Jonker &de Witte, Marco. (eds.) 2006. ‘Finally in Business: Organising Corporate Social Responsibility in Five’ in Management Models For Corporate Social Responsibility. Springer,Heidelberg,Germany.  pg1

[5] Australian Centre for Corporate Social Responsibility (ACCSR), 2011. Defining Corporate Social Responsibility, ACCSR, South Yarra, Australia. Accessed May 28th, 2012. http://accsr.com.au/html/definecsr.html

[6] Jan Jonker &de Witte, Marco. (eds.) 2006. The Challenge of Organising and Implementing Corporate Social Responsibility. pg 32

[7] Andrew W. Savitz & Weber, Karl. 2006. The Triple Bottom Line. How Today’s Best-Run Companies are Achieving Economic, Social and Environmental Success, and How You Can Too. Jossey-Bass,San Francisco,United States of America. pg 44

[8] Ibid pg 54

[9] Jan Jonker &de Witte, Marco. (eds.) 2006. The Challenge of Organising and Implementing Corporate Social Responsibility. pg 15

[10] Andrew W. Savitz & Weber, Karl. 2006. The Triple Bottom Line. How Today’s Best-Run Companies are Achieving Economic, Social and Environmental Success, and How You Can Too. pg 56

[11] Jan Jonker &de Witte, Marco. (eds.) 2006. The Challenge of Organising and Implementing Corporate Social Responsibility. pg 1

[12] Andrew W. Savitz & Weber, Karl. 2006. The Triple Bottom Line. How Today’s Best-Run Companies are Achieving Economic, Social and Environmental Success, and How You Can Too.  pg x

[13] David E. Hawkins 2006. Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability. Palgrave MacMillan,Hampshire,United Kingdom, pg 1

[14] Ibid pg 9

[15] Ibid pg 13

[16] Andrew W. Savitz & Weber, Karl. 2006. The Triple Bottom Line. How Today’s Best-Run Companies are Achieving Economic, Social and Environmental Success, and How You Can Too.  pg xiii

[17] Adrian Henriques & Richardson, Julie. (eds.) 2004. The Triple Bottom Line: Does it All Add Up? Earthscan,Camden,London.United Kingdom, pg28

[18] Andrew W. Savitz & Weber, Karl. 2006. The Triple Bottom Line. How Today’s Best-Run Companies are Achieving Economic, Social and Environmental Success, and How You Can Too.  pg xiv

[19] Jan Jonker &de Witte, Marco. (eds.) 2006. ‘Finally in Business: Organising Corporate Social Responsibility in Five’ in Management Models For Corporate Social Responsibility. pg 3

[20] Adrian Henriques & Richardson, Julie. (eds.) 2004. The Triple Bottom Line: Does it All Add Up? pg 27

[21] Ralph Tench & Yeomans, Liz. (eds.) 2009. Exploring Public Relations. pg  101

[22] Ibid pg 254

[23] Ibid pg 252

[24] Ibid pg 253

[25] Adrian Henriques & Richardson, Julie. (eds.) 2004. The Triple Bottom Line: Does it All Add Up?  pg 83

[26] Samuel O.Idowu & Filho, Walter Leal. (eds.) 2009.  Professionals’ Perspectives of Corporate Social Responsibility. Springer,Heidelberg,Germany.  pg 208

[27] Philip Kotler & Lee, Nancy., 2005. Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. pg 208

[28] Samuel O.Idowu & Filho, Walter Leal. (eds.) 2009.  Professionals’ Perspectives of Corporate Social Responsibility. pg 73

[29] Ibid pg 74

[30] IBM, 2012. ‘Responsibility at IBM,’ http://www.ibm.com/ibm/responsibility, retrieved 28th May 2012

[31] Ibid

[32] Ibid

[33] Jan Jonker &de Witte, Marco. (eds.) 2006. ‘Finally in Business: Organising Corporate Social Responsibility in Five’ in Management Models For Corporate Social Responsibility. pg 32

[34] Ralph Tench & Yeomans, Liz. (eds.) 2009. Exploring Public Relations. pg 399

[35] Marc Jones, 1999. Department of Business, Macquarie Business Research Papers, ‘Social Responsibility in Large and Small Firms.’  MacquarieUniversity,Sydney,Australia. pg4

[36] David E. Hawkins 2006. Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability. pg 256

[37] Samuel O.Idowu & Filho, Walter Leal. (eds.) 2009.  Professionals’ Perspectives of Corporate Social Responsibility. pg 43

[38] Jan Jonker &de Witte, Marco. (eds.) 2006. ‘Finally in Business: Organising Corporate Social Responsibility in Five’ in Management Models For Corporate Social Responsibility. pg 35

[39] Marc Jones, 1999. Department of Business, Macquarie Business Research Papers, ‘Social Responsibility in Large and Small Firms.’ pg 4

[40] Samuel O.Idowu & Filho, Walter Leal. (eds.) 2009.  Professionals’ Perspectives of Corporate Social Responsibility. pg 2

[41] David E. Hawkins 2006. Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability. Pg 7

[42] Ralph Tench & Yeomans, Liz. (eds.) 2009. Exploring Public Relations. pg 97

[43] Ibid pg 2

[44] David E. Hawkins 2006. Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability. Pg 257

[45] Jan Jonker &de Witte, Marco. (eds.) 2006. The Challenge of Organising and Implementing Corporate Social Responsibility. pg 3

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