Corporate Social Responsibility and Sustainable Development

Corporate Social Responsibility and Sustainable Development

Corporate social responsibility is the practice of initiating or participating in activities that have immense socioeconomic impact on the lives of the local residents served by an organization. Companies apportion a part of their earnings to solve some of the community’s challenges including access to education and healthcare. CSR is adopted by corporations all across the globe as a way of connecting with the market and improving its public image.

The Impact of CSR on Sustainable Development

The report sought to determine if CSR resulted in sustainable development. There has been a spirited argument against the practice as some experts believe that charity activities by organizations are a marketing process aimed at improving the brand’s visibility but do not have any noteworthy implications in the lives of the market. The corporations exploit the community’s concerns and present short term remedies that minimally impact the living standards of society.

Evidence of CSR Leading to Sustainable Development

The study focuses on evidence that supports the idea that CSR results in sustainability. Multiple instances of the use of the practice by companies to achieve economic growth have been examined. For instance, the case of Hindustan Unilever where the company trained local village women on door-to-door sales and end chain retail. The individuals were provided with microfinance facilities in addition to basic services such as healthcare and associated insurance coverage as well as schools for their children. The project was immensely successful as it not only ensured the proliferation of the brand and improved sales but also lifted the community out of poverty and unemployment. The report focuses on examining the positive effects of CSR, highlighting evidence of the practice to ensure well-rounded community development. The study confirms the hypothesis that corporate social responsibility results in sustainable developments.

Abstract

The study explored corporate social responsibility and its property to result in sustainable development. CSR was examined as the prospect of organizations to engage in activities beyond their operational and legal mandate to improve the living outcomes of communities they serve. The report sought to investigate the prospect of corporate social responsibility in creating sustainable development, provide an evidence-based technique for examining the effect of CSR in increasing organizational performance using real-life illustrations, and investigate varying corporate contexts and understand their applications of CSR. The study utilized a qualitative research design to assume a well-rounded approach to examining the research problem. The methodologies utilized include descriptive analytical research and interviewing. The study determined that when appropriately implemented, corporate social responsibility results in sustainable development.

Keywords

Corporate social responsibility, sustainability, charity, marching gift program, initiatives, social enterprise, sustainable development.

Chapter 1. Introduction

1.1. Background

Weber (2016, p.241) defines corporate social responsibility as the tendency of organizations to engage in activities that further societal benefit without expectation of immediate reward. The concept is borne out of the need for corporations to take part in actively developing the community within which they operate. Commonly referred to as CSR, corporate social responsibility is an avenue for business entities and non-governmental organizations to engage the public by sponsoring activities that result in better cultural outcomes. Ideally, businesses are developed to create and expand value (Du, Bhattacharya, and Sen, 2013, p.12). They are inherently predisposed to further their agenda and realize maximum profitability under the existing legal framework. Corporations exploit the available resources to meet a specific need and outperform their competition. They actively pursue interests within their operational environment, seizing every available opportunity at their behest to exceed their proverbial “bottom line”.

CSR provides a framework with which firms can attempt to address some of society’s most pressing needs. Through corporate social responsibility, companies use part of their proceeds to engage in exercises that endear them to the community in which they operate. Corporations endeavor to create a well-crafted public image projecting the ideals with which they intend to be identified. Through intense marketing, the corporations spend billions of dollars every year in a bid to achieve a well-developed persona. The elaborate advertising approaches gear towards presenting the firms as reliable and in synch with the community’s values. Corporate social responsibility offers such a forum. The entities overcome their innate inclination to attach a return on investment mindset, instead choosing to perceive such activities as a charity and expecting no profit.

However, while there is a general consensus that CSR is primarily intended to result in better community outcomes, many scholars believe that corporations are better placed to realize an economic benefit from the practice. The school of thought posits that corporate social responsibility is an approach through which companies endeavor to gain a better standing within the community thus, increase their visibility and consequently, record more sales. The scholars suppose that firms use CSR as a front for enlightening the market on the brand with the belief that the improved relations translate into better financial prospects. There is much debate on if corporate social responsibility in itself results in an improved financial situation and ensures operational sustainability is arguable as there appears to be no finite disposition on the issue. Nonetheless, the practice is rampant and practiced all over the world, indicating that, albeit poorly documented, there must be some theoretical or practical gain that organizations realize that promote its continued adoption in the contemporary business framework. Therefore, to some extent, CSR is utilized as a business strategy where corporations distinguish their modus operandi from that of their competitors, hence, realize a better financial position.

CSR acts as a type of private business regulation where firms deliberately endeavor to uphold high standards and engage in practices that promote societal progress without any legal obligation. The exercise is practiced as a way for organizations to demonstrate that they identify with the issues that plague their market base and that they actively work towards minimizing their adverse impacts. CSR reveals that the establishments are in touch with their customer base and that they recognize the unique challenges that affect the consumers beyond the commercial context. Working towards ensuring a better socioeconomic environment vastly improves the firm’s profile. Customers are predisposed to exhibit brand loyalty knowing that proceeds from their expenditures go towards ensuring the continuing of a select social enterprise which in turn, improve their collective welfare.

While some local and international regulations require entities to engage in some activities that may be regarded as corporate social responsibility, CSR remains largely voluntary. The entities make a deliberate effort to engage in the process as a means of addressing select unique problems without any legal mandate. Many organizations, more so those with a humanitarian development inclination adopt CSR as an organizational policy.

The approach is adopted by the institutions as a key major practice with relevant sections established to ensure its perpetuation. To be successful and sustainable, the practice is aligned with the business’s objectives and sufficient prerequisite planning placed in ensuring continuity of the practice. From the two arguments, one concludes that organizations engage in corporate social responsibility for ethical or strategic reasons. From a planning standpoint, firms partake in the practice with the belief that they stand to reap long-term gains. The cordial customer relationship gradually translates into larger trade volumes and consequently, higher profits. Firms conduct CSR exercise to attain shareholder trust and confidence due to the ensuing positive public relations. Additionally, the high ethical standards assumed by the organizations reduce legal and business risk and minimizing the potential for liabilities the firms may realize.

According to Saeidi, Sofian, Saeidi, Saeidi, and Saaeidi, (2015, p. 341), CSR practices encourage firms to impact the environment positively hence, ensure the welfare of customers and by extension, stakeholders. The exercise champions the use of safe and sustainable techniques that have limited adverse effects on the consumer’s health as well as the surrounding flora and fauna. Companies deliberately adopt green initiatives not only to minimize operational costs and streamline their processes but also to conserve the environment. They purposely limit pollution and the emission of harmful effluents as part of their commitment to ensuring better living outcomes for the community they serve. Ethical considerations also commonly inspire participation in corporate social responsibility adventures.

1.2. Project Aims and Objectives

The report will examine the prospect of corporate social responsibility in creating sustainable development,

The project will provide an evidence-based technique for examining the effect of CSR in increasing organizational performance using real-life illustrations, and

The study will investigate varying corporate contexts and understand their applications of CSR.

1.3. Research Questions

i. How can corporate social responsibility to create sustainable development?

ii. What are some of the real-life illustrations exploring the impact of CSR in improving corporate outputs and performances?

iii. What is the usefulness of CSR and its viability in improving social well-being and preferring better commercial?

iv. What are the different organizational contexts to determine those whose CSR initiatives would register the projected benefits?

1.4. Significance

The report seeks to determine the importance of corporate social responsibility in creating long lasting and perpetual development. Understanding the subject will result in increased interest in the subject by industry insiders and researchers, hence, spur an increase in social enterprising.

1.5. Justification

Corporate social responsibility is a common industrial practice. Companies spend billions every year ostensibly to improve the welfare of their market base. Therefore, it is imperative to determine if the practice actually results in sustainable development. The study examines if CSR actually results in perpetual socioeconomic growth.

1.6. Structure Outline

1.0 Introduction

i. The chapter offers a brief insight into the topic being explored.

ii. The introduction provides an outline of the report foreshadowing the methodologies, reviewed literature, and the expected outcomes of the research expedition.

1.1.Background

i. The segment provides a histological basis of the research problem.

1.2.Purpose

ii. The section outlines the outcomes the researcher intends to accomplish.

1.3.Outline the Research Aims

iii. The section includes a brief description of the structure and the aims of conducting the research.

1.4.Objectives

i. The section outlines the primary objectives of the report.

1.5.Research Questions

i. The section contains the research question the report intends to answer.

2.0. Methodology

i. The chapter discusses the data collection, synthesis and presentation techniques employed in the course of the report.

ii. Some of the topics explored include sampling, deliverables/outputs, limitations, and future opportunities.

3.0. Discussion

i. The chapter discusses the results attained from the process.

ii. Some of the topics include corporate social responsibility and its characteristic to create sustainable development and the the impact of CSR in improving corporate outputs and performances

4.0. Conclusion and Recommendations

i. The section summarises the key themes explored in the literature.

ii. Recommendations for the explored outcomes and considerations for future research are also extensively studied.

The chapter included a brief summary of the research problem. The segment outlined the objectives and aims that the study intends to accomplish. The next chapter is the literature review. The section discusses the secondary resources utilised in the development of the report. Conceptual frameworks that offer theoretical insight into the research problem are also included. A systematic review of the studies will be provided.

Chapter 2. Literature Review

2.1. Introduction

The chapter contains a review of literature discussing the prospect of engaging in corporate social responsibility as a means of developing the community’s propensity to attain economic sustainability. The section will elaborate on the different scholarly works used in the development of the literature. The chapter will contain a thorough review of the theoretical frameworks associated with the practice of corporate social responsibility and its exploitation by corporations to attain self-sufficiency.

2.2. Background

First, it is imperative to note that the study of CSR and its application in the contemporary marketing environment is often dissected into two major perspectives. The practice is championed consciously by corporations as a means of paying the proverbial debt to society. Secondly, CSR is examined as the process of organizations consciously choosing market-friendly practices to ensure society suffers the most minimal harm from their activities. Therefore, there are two distinct schools of thought both of which have been extensively documented and will be detailed in this report.

The articles utilized in the study examined different aspect of the research problem. The report by Jamali and Mirshak (2010, p. 244) provides an insight into the concept of CSR as it examined theoretically and as it is adopted in practice. The study examines corporate social responsibility as an intricate exercise with complex constituents which cannot always be exhaustively examined in theory. Corporations engage their resources in planning and coordinate with other key players to implement such strategies. They employ contingencies aimed at streamlining the processes and limiting the prospect of failure. However, the practical implementation is often immensely different from planning process as conceiving the exact situation on the group is incredibly complicated more so in the developing countries where the socioeconomic and political situations are immensely fluid.

The study focuses primarily on third world countries. As such, its scope is limited as the factors that affect the application of CSR in developed nations are immensely different. The studies differ from Steenkamp (2017, p.40) who offers a global perspective into the practice. Steenkamp (2017, p.43) examines corporate social responsibility as a branding exercise explored by companies as a means of examining advertising their brand identities. Steenkamp’s (2017, p.44) assertions differ from those made by Jamali and Mirshak (2010, p. 247) and Visser (2008, p.199) as they suppose that CSR performs a branding function rather than a humanitarian purpose in developed nations. Steenkamp (2017, p.47) argues that in most first world countries, CSR activities are focused on supporting available relief efforts many if which service less advantaged areas in the thirds world. Many of them do not engage directly in imitating new projects, but rather, encouraging older ones. These dimensions are in sharp contrast with those made by Visser’s (2008, p.197) study, corporate social responsibility in developing countries and Jamali, and Mirshak (2010, p. 248) who maintain that a majority of CSR efforts are developed from scratch and directly fashioned to assist the people in the immediate environment of the business thus, result in sustainable development.

The disparity in disposition is caused primarily by the different contexts in which the studies are based. Visser (2008, p.200) and Jamali and Mirshak (2010, p. 251) base their findings on corporations operating in India, Africa, South East Asia, the Americas and other third world regions while Steenkamp (2017, p.49) explores the global market as a whole.

Visser’s (2008, p.204) article is its biased assumption that all companies are genuine in their engagement in CSR activities to further their economic and social progress if the community. The article’s focus is also myopic as it avoids offering balanced insight into the application of CSR in different economic classes. Steenkamp’s (2017, p.53) study’s biggest limitation is its general analysis of the research problem. The article focuses on the use of CSR to achieve sustainable development all across the globe, covering different market clusters. However, it fails to offer an in-depth insight into how each socioeconomic class affects the application of CSR. There is general consensus that the potential for corporate social responsibility to result in sustainable development depends on the economic status of the market, a perspective that Steenkamp (2017, p.58) completely fails to acknowledge.

Alvarado-Herrera, Bigne, Aldas-Manzano, and Curras-Perez’s (2017, p.243) study addresses the shortcomings of Steenkamp (2017, p.53), Visser (2008, p.199), and Jamali and Mirshak (2010, p. 245) studies. The report provides a standardized format with which the concept of corporate social responsibility and sustainable development can be analyzed across different markets. The article examined the prospect of CSR and how different parties seem to have varying opinions regarding its efficacy in achieving economic progress. Alvarado-Herrera et al. (2017, p.245) maintain that consumer perception is the primary determinant of the approach in CSR. Markets where a majority of residents face a similar socioeconomic problem will tend to appreciate CSR activities that address their challenge than those which do not. Developing countries suffer from many economic and social shortcomings including poverty, disease, and lack of education. Therefore, by initiating activities that solve some of these problems, consumer perception of the company will shift in the favor of the corporation. The same CSR efforts may not be as effective in first world countries where a majority of people do not face such challenges. The most pronounced limitation in Alvarado-Herrera et al.’s (2017, p.248) study is the shallow nature with which it examines the research subject.

2.3. Different Organizational Contexts

The study on corporate social responsibility in the mining industries by Yakovleva (2017, p.314) offers new perspectives by studying corporate social responsibility as observed by mining industries. The article discusses how context affects the choice and nature of corporate social responsibility activities. The report offers several examples of organizational structures and how they approach the subject of CSR. For instance, service-oriented Industries tend to prefer exercises similar to their operations as part of their social responsibility obligations. Medical institutions offer free screening, treatment, and even medication as part of their CSR sensibilities as such a process not only aligns with the organization’s agenda but is also aligned with its brand identity which is centered on beneficence.

The study further illustrates that a fast-food restaurant may be more predisposed to offering aid in form of leftover foodstuffs than for instance, than constructing hospitals. Yakovleva (2017, p.317) focused on the mining sector and CSR is implemented in the industry. Mining companies often have limited contact with society at large as many of to tend to be situated away from human settlements. Aside from members of staff, the firms often rarely interact with the public as their end products are raw materials in need of further processing before it reaches the end consumer who is often an entirely different entity from the miner. Nonetheless, these firms have a pronounced impact on the physical environment. Yakovleva (2017, p.324) notes that many of them release toxic effluents which pollute the local atmosphere, water sources, and soil, resulting in poor health outcomes for the community. As such, most companies prefer reclaiming the land after the resources have been deleted. Mining companies have also been noted to build social amenities including schools, hospitals, and recreational centers as a way of giving back to the local residents. The study offers an insightful analysis of how different industries exhibit social responsibility efforts. The article’s primary strength is its intent and evidence-based approach to addressing the subject. The study’s primary weakness is a poor connection between the concepts of CSR and practical sustainable development (Yakovleva, 2017, p.337).

2.4. Theoretical Frameworks

Several conceptual dispositions have been developed over time to explain the CSR phenomenon. Scholars have postulated several theories in an attempt to explain the practice and offer insight into its rampant adoption in the modern marketplace. Businesses inherently exist to make a profit. They center all their operations on the need to achieve better financial stability by engaging in practices that limit their level of obligations and maximize productivity often at any cost. As Epstein (2018, p.204) explains, corporations strive to meet legal provisions while endeavoring to exploit all available loopholes to reap the maximum economic benefit. However, in the pursuit of their objectives, they must always recognize that they do exist within a social setting and as such, must be sympathetic to their ways of life. Corporations must understand that their improved financial well-being might very well spell poorer health and general welfare outcomes for local residents. Their struggle for profit maximization and liability reduction may cause them to assume sub-par practices that may endanger the public (Garriga and Melé, 2014, p. 51). As such, they often face a moral dilemma. Additionally, they may also appreciate the dedication of the market to provide consistent patronage, hence, may roll out CSR initiatives. The study will explore three theories in relation to the integration of CSR into the operations strategies and models for companies in the current business environment. They include social responsibility theory, the triple bottom line, and the stakeholder theory.

2.41. Social Responsibility Theory

The concept emphasizes that as much as businesses have a responsibility to make money, they are ethically expected to interact with the local community in a way that improves the welfare of the public through charity. According to the theory, their actions ought to be in line with the group’s social ideals and must actively champion the society’s well-being. The theory categories corporate operational obligations into four groups including philanthropic, legal, ethical, and economic responsibility. The study by Carroll and Shabana (2010, p.85) examines the concept of CSR. The report demystifies the social responsibility theory, noting that it contains four major aspects, critical to the achievement of distance development. The study notes that corporations have an ethical, philanthropic, economic, and legal duty to improve the market in which they operate. The most pronounced limitation of the report is its poor connection of CSR to suitable development. The article offers an insightful outlook on the concepts that constitute corporate social responsibility but loosely connects it to market progress.

2.41 (a) Economic Responsibility

According to Matten and Moon (2011, p. 408), companies have an economic duty to their owners to make money in order to survive and sustain their operations. Firms that fail to register profits risk stakeholders investment and limit their potential to engage their communities outside the company’s formal framework. Higher revenues allow the corporations to allocate more funds towards their ethical, philanthropic, and legal responsibilities (Kolk and Van Tulder, 2010 p. 44). The social responsibility theory defines legal obligations as an organization’s duty to abide by the established regulatory framework. Scholars argue that in the context of CSR, legal mandate must be observed as a proactive duty rather than adherence after the fact.

2.41 (b) Ethical Responsibility

As a result of sustained intense lobbying by business interests, laws regarding the ethical obligations of companies have been slackened in most economic jurisdictions. The morality of any business practice is no longer defined by the values it champions but rather, the degree of physical harm that it inflicts on consumers. Matten and Moon (2011, p. 409) posit that firms have strived to create an environment suitable for business by eliminating the restrictive red tape requiring their adherence to a select moral code. Ideally, the most primary responsibility of any commercial enterprise is to their shareholders. They are fundamentally created to make a profit and to result in better financial outcomes of their founders. All other requirements and needs are secondary. Many organizations often observe this rule dismissing the importance of ensuring the customer’s well-being for the perpetuity of the business (Matten and Moon (2011, p. 411). They engage in unsavory business practices aimed at increasing their margins, often at the disadvantage of the customers. In many instances, such undertakings are protected by law, thus, the customer cannot seek redress. A common example is waste disposal. In most economic zones, laws regarding pollution are nondescript and general allowing for firms to exploit them (Grayson and Hodges, 2017, p.54). Therefore, organizations must often make deliberate efforts to engage in conservation efforts.

According to Moon (2012, p.294), the firms must exercise their duty to ensure the personal safety and security of those around them. They must endeavor to avoid contaminating the basic facilities used by locals for survival. As many environmental laws are not often adequately enforced, it is up to the institutions deliberately observe environmental decency. Organizations must integrate strong ethical values among their employees which must permeate every aspect of the institution. Corporate moral values differentiate companies from their competition (McWilliams, 2015, p.2). Entities with firm ethical standpoints tend to attract customers than those without. A recent example is the Apple Inc. vs FBI case. Today’s contemporary discerning smartphone user is growing increasingly concerned about their security online. The devices may have opened up the user to a world of endless opportunities but so have they been introduced to much graver threats. Unlike previous criminals, the modern delinquent is far more tech savvy. They utilize any psychological and behavioral weaknesses go gain access to a person’s most intimate virtual space harnessing any data that they find useful. What makes them far more dangerous than the average wrongdoer is the fact that they can cause extensive harm almost undetected. In a world incredibly governed by technology, passwords and logins are becoming more important than ever. Instead of securing one’s belongings with locks and gates, people are turning to technological innovations for more impregnable options.

Mobile devices are increasingly used as a means of access control to these systems. With the help of the handheld devices, users can access their Bank accounts, make financial transactions, make audio and video contact with others, and send and receive text and photo content (Kolk and Van Tulder, 2010 p. 48). The phones have become a crucial component in ensuring seamless continuity of the user’s day to day activities to the point that their absence can result in poor outcomes. Their growing centrality in people’s lives makes them incredibly important to those who wish to cause them harm. Hackers exploit every vulnerability in the behavioral patterns of the individuals to gain unauthorized access and cause malicious damage including banking information and personal information. There have been numerous cases of unwanted entry into the devices and subsequent criminal activity including instances where user’s identity have been stolen and their saving accounts emptied. In response to such cases, mobile phone manufacturers and operating systems service providers have been increasingly improving access control methods to ward off unwanted access. They have suggested several measures and redundancies including the incorporation of passcodes, fingerprints, and security questions.

One such manufacturer is Apple Inc. The company is revered for integrating superior security techniques, one of which is an impenetrable cloud functionality, and a factory reset function in the event that a wrong passcode is entered in ten consecutive attempts. In May 2016, the company faced one of its most prominent ethical dilemmas yet. Following the tragic San Bernardino shooting, the Federal Bureau of Investigation requested the company to develop a master access template for the agency to access the perpetrator’s phone. Froomkin and McLaughlin (2016, p. 26) establish a new phase of the crypto wars documents the titanic battle that ensued between the most valuable company on earth and the United States’ premier law enforcement agency. The shooter, Rizwan Farook, used the iPhone 5c model which had a trial limit after which, its fail-safe feature would erase all content. The bureau deemed the phone critical to solving the case and preventing further attacks by understanding the networks and patterns of communication between them. Apple Inc. prides itself on a strong tradition of customer information safety and privacy. Therefore, by giving the FBI unprecedented access to their phones, they would be effectively neglecting their ethical obligat