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Criticism, Theories and Analysis of Corporate Social Responsibility

1.0 Introduction

As defined by Maignan, “ corporate societal duty entails all activities undertaken by a corporation to carry through committednesss to corporate societal duty and support societal causes. ”[ 1 ]Despite its important laterality in the present concern environment, the construct of societal duty dates merely a few decennaries. Precisely, the term corporate societal duty came into usage in 1970s after the formation of many transnational corporations. “ In the present epoch of transnational corporations and globalisation every bit good as increased media qui vive, the wider population is much witting about the operations of corporate concerns ”[ 2 ].In relation with this facet, the issue of destructive and unethical patterns which dominated the concern sector is under acute focal point in recent yearss.

1.1 Corporate Social Responsibility

As outlined by Spence “ corporate societal duty policy is aimed at to constitutional ego modulating mechanism that enables the concern to supervise and guarantee efficient conformity with the spirit of jurisprudence, international norms and ethical criterions. ”[ 3 ]With the increased competition in the concern sector in recent yearss, there has been every demand for each concern to follow with the outlooks of its clients every bit good as that of the wider population. Based on this facet, the chief aims and end of corporate societal duty is to heighten duty and answerability by the concerns for their actions and promote positive and admirable impacts to the environing community.

“ With this in head, corporate concerns have developed admirable consciousness sing the public assistance of the consumers, environment, employees, communities, and stakeholders alongside all members of the populace sphere. With the development of corporate societal duty, concerns proactively promote the public involvement through the engagement in community development and growing. ”[ 4 ]

Research carried on the patterns of many transnational corporations every bit good as local concerns has shown that the construct of CSR is deriving impulse. Businesss intentionally and voluntarily include the public involvements in their corporate determination devising. In this respect, the construct of corporate societal duty has non merely been a favour to the populace but is turning to be compulsory for the success of any concern.

Criticisms against CSR

Even though CSR is deriving the attending that it needs still many economic experts who have gained involvement in the field of CSR have expressed opposing position points sing the relevancy of CSR to the concern For case, Milton Friedman the profound American economic experts wrote in his celebrated 1970 New York Times Magazine “ merely societal duty of concerns is to increase net income. ‘[ 5 ]In relation with this phenomenon, corporate societal duty has been perceived as a powerful and effectual watchdog over the transnational corporations. When corporations are encouraged to concentrate their aims into CSR they are diverging from their chief end and that is net income. Such a motion may non hold a direct impact but in the long-run when corporations are concentrating on CSR they might impact the economic system negatively as the net income generated is minimum therefore the overall wealth of the economic system is worsening.

Corporate Social Responsibility Theories

Since the outgrowth of the construct of corporate societal duty there have been many theories for and against the execution of CSR. Theses theories include the followers:

Corporate Citizenship theory: this construct refers to the corporation ‘s functions and duties towards the society. In a manner it describes the corporate as citizens of the society that have duties towards it. For illustration in 2003, the tribunal instance Nike V Kasky, “ which A revolved around Nike ‘s public defence of its actions, through letters to the editor, imperativeness releases, and other public commentary, to claims it was utilizing sweatshop labour. ”[ 6 ]

Stakeholder Theory: “ is a theory of organisational direction andA concern ethicsA that addresses ethical motives and values in pull offing an organisation. ”[ 7 ]This theory constitutes that corporations non merely runing for net income but besides sing the environmental and societal impact of their operations

Stockholders Value Theory: This construct constitutes that corporations have a fiducial responsibility to maximise the net income and wealth of its stockholders. Such a theory has a negative impact as it does non see other philanthropic factors and society ‘s reactions towards such a corporation.

Factors Influencing Corporations Prosecuting in CSR

Based on research conducted by assorted bookmans and research workers sing the subject of corporate societal duty, different concerns have been identified to hold varied motivations towards the issue. Basically, the demand to place the concern with mention to other concern has been the most superimposed factor. In this respect, research has shown that concern patterns corporate societal duty so as to pull and retain more clients. With the present addition of competition in the planetary concern, it has been noted that each concern is doing usage of any available scheme so as to entice more clients. With the acceptance of assorted CSR enterprises, concerns are able to entice public attending therefore being able to better their public presentation. Based on this penetration, net income maximization has been a major motivation which has enhanced concerns to set about ethical and sustainable societal patterns

Reputation Enhancement ; Recently, corporations have non merely been concentrating on merchandising their merchandises and services but on their repute and value.

For illustration Shell- “ in 1995, as the limelight turned on Shell. That twelvemonth the company stood accused of complicity in the executing of Ken Saro Wiwa and eight other militants in Nigeria, every bit good as being hounded by Greenpeace over the determination to drop the Brent Spar oil platform. Shell temporarily lost the assurance of investors and the populace ”[ 8 ]

Shell so spent 20 million on its PR in order to reconstruct its image and repute. Shell published a statement on its rules about values and unity and the statement was supported by a study release in 1998 by the environmental consultancy Sustainability. This study was accompanied by planetary run ads that portrayed Shell concentrating on environmental issues and besides sing the community in its determinations. This move has successfully restored the Shell trade name image.

PR and Marketing Purposes: A batch of corporations have been utilizing CSR as their selling scheme in order to alarm the populace about their operations and derive the attending of future consumers. When companies are being noticed by the populace as a corporate socially responsible organisation this would increase its hereafter investings.

For illustration BP- BP acquired a solar company for a little per centum of its disbursement on oil outgo in order to look as an conservationist ‘s corporation and place itself as a corporately societal responsible company.

Penetrating a New Market: If a company wants to come in a new market, it has a high hazard of neglecting, in order for corporate to pull off their hazard holding CSR means that the company is cognizant of the issues environing the environment and therefore makes it easier for the company to perforate the market.

Competition and Market placement: Investing in CSR means that the company is a leader in the market as its operating harmonizing to the ethical ordinances. Many transnational corporations every bit good as local concerns have involved in intensive CSR enterprises so as to derive a competitory advantage. This is apparent through the legion AIDSs and contribution given different companies to help communities. In order to place itself Cadbury bought Green & A ; Blacks conveying a message to the populace about its ethical beliefs and besides allowed it derive control of a niche market and increase net income.

For illustration: Body Shop- “ a maker and retail merchant of of course inspired, ethically produced beauty and cosmetics merchandises ” The organic structure store aims at representing their corporate societal duty by prosecuting ethical trade plans to better the on the job conditions of its employees. Recently they created a run “ For Me, For You ” Particular Edition Shea Lip Care Duo which capitalized on its success as being known for its lip balm which aimed at halting Home force the financess raised were donated to non-charitable organisations to back up adult female and kids. ”[ 9 ]Body store created a niche market through the image it portrayed to the populace.

Contributions: CSR has besides been a manner of sharing the accrued net incomes acquired by large corporations with the community. Research has shown that many transnational corporations are gaining one million millions of money yearly. This is in mention to the wider populations which are populating in poverty state of affairs. CSR enterprises are Acts of the Apostless of charity which are aimed at bettering the public assistance of the people. For case, research carried on the operations of transnational corporations in hapless states has shown that they involve in extravagancy societal undertakings. This phenomenon is fundamentally aimed at bettering the public assistance of the people. On the other manus, concerns pattern societal and environmental developments so as to authorise the people with the basic accomplishments to develop themselves. In this position, research has shown that concerns set abouting societal developments are taking at bettering the potencies of the people. In relation with this phenomenon, it has been realized that, the dependence of hapless communities can merely be achieved through guaranting sustainable developments.

1.2 Approachs for CSR- How to integrate the CSR scheme

There are assorted signifiers that corporations can prosecute in order to be perceived as socially responsible.

Community-based development attack involves the cooperation between organisations with the community with the purpose of breaking their public assistance. In this respect, corporations involve in assorted undertakings which are aimed at bettering the public assistance of the community. The corporations may set up assorted larning establishments, H2O undertakings, and other activities aimed at profiting the populace.

The issue of instruction has been outstanding with assorted corporations whereby they have been able to prosecute in preparation and authorising the populace with accomplishments and cognition to assist them in hereafter. An illustration of this undertaking has been identified in “ Flower Valley under the enterprise of Shell Foundation ‘s. The patterns of Mark and Spenser have besides been admirable in their motivations of constructing trade motivations with the community. Enlightenment of the community on the issue of HIV/AIDs has besides been dominant among many corporations as portion of their societal duty ”[ 10 ]

Philanthropy has besides been an outstanding attack to corporate societal duty among many corporations. This include fiscal contributions and assistance to the communities. In relation with this construct, transnational and local organisations give fiscal contributions and assistance to local organisations and communities in hapless countries. Despite the benefits accumulated from this attack to the communities, it has gained a batch of unfavorable judgment from different groups and bookmans. “ This is fundamentally based on the fact that it merely aids the community in short-run and fails to give the appropriate accomplishments and cognition to the people to help in bettering their state of affairs. With continued acceptance of philanthropic gift, communities will go dependent on assistance and therefore decline the state of affairs instead than assist in work outing their state of affairs. Nevertheless, Philanthropy has been of great significance to the corporations in that it has helped in constructing its image among the public therefore being able to run into its aims. ”[ 11 ]

As discussed earlier in support to stockholder value theory, with this attack which is based on the fact that, corporate success and societal public assistance is mutualist. The concerns have been apt to developing sustainable and worthy schemes therefore are able to integrate the community into the concern involvements. With respect to making shared value, concerns involve in intensive development of educated work force, sustainable resources, and healthy relationships so as to vie efficaciously.[ 12 ]

When companies need to place themselves in the market they need to, accent on the costs and restrictions in carry throughing with externally set societal and environmental criterions With mention to this attack, chances for competitory advantage are the chief motivation of the concern in heightening corporate scheme.

Benchmarking is besides a widely adopted attack to corporate societal duty. This attack has loosely been adopted by concerns to out vie their oppositions in the industry therefore heightening their public presentation and profitableness. “ Basically, benchmarking entails analysis and reappraisal of rival CRS initiatives alongside rating and mensurating the impacts of the policies adopted by other concerns to the society and environment ”[ 13 ]. The perceptual experience of rival CSR scheme has besides been of brilliant consideration in the concern sector in recent yearss. In relation with this phenomenon, concerns have been really witting about the CSR enterprises of their oppositions. “ Research has shown that this attack to CSR has gain relevancy in recent yearss due to its impacts to the corporate scheme. Businesss are able to pull a comparing between the CSR enterprises of their rivals and therefore make up one’s mind on the appropriate steps to set about ”[ 14 ]

2.3 Reasons for the Rise of CSR

The present rise and development of ethical consumerism has been developed and enhanced by the issue of globalisation and increase in engineering. In recent yearss, the populace is more cognizant of their rights and freedoms with regard to the corporate concerns. As contrasted to earlier old ages, people at present are more witting about the impacts of concern ‘s actions to the environment and the society. Importantly, the increased competition among concerns has besides led to gap of the consumers ‘ cognition on their rights every bit good as the concerns duties. In respect to this phenomenon, competition in the concern sector has enabled consumers non merely to look at the issues of monetary values and quality but besides the ethical consideration of the concern. This has significantly influenced the development of corporate societal duty.

The construct of globalisation has besides had important influence on the planetary concern and the issue of CSR. In this instance, globalisation has led to increased cooperation and interactions among planetary communities. With this in head, each concern has been put under force per unit area to guarantee pattern of ethical actions which are in correlativity with social norms and ethical motives. This phenomenon has been widely demonstrated by foreign corporation runing in different states. In this position, the concerns are entitled to lodge to the patterns followed by other concerns within the part of operation. Based on this penetration it has been made clear that concerns adopt CSR enterprises due to act upon and force per unit area from their oppositions.

With respects to research, the media has been in the head in foregrounding the unethical patterns of concerns. This phenomenon has led concerns to alter their actions and maintain societal ethical patterns. For case the issue of pollution has been widely covered by most of the media therefore conveying shame to the involved concerns. With respect to this phenomenon, concerns have been able to alter their unethical and unwanted patterns to follow with the outlooks of the wider population

In add-on, sweetenings of corporate and concern Torahs and ordinances in present yearss have besides influenced the extent to concern engagement in CSR. In this instance, concerns are made to follow with the set Torahs and ordinances set by the provinces and establishments in their countries of operations. Governments are in the present witting about the construct of corporate jurisprudence and the issues moralss in the concern. With respect to concern Torahs and ordinances, concerns are made to purely run to the outlooks of the people every bit good as protecting the involvements of all stakeholders. At present, the issue of pollution has been outstanding the globally therefore naming fro pressing steps. In this instance, concerns are made accountable for their impacts on the environment. For case, concerns which have caused injury on the environment are forced to counterbalance fro the amendss.

3.0 Analysis

3.1 Turning importance of CSR

As indicated by Waddell ( 327 ) , CSR is of great importance in the concern and societal sphere. Research carried upon assorted groups sing the construct of corporate societal duty, has shown a positive attitude and perceptual experience of people towards the issue. This is so because ; it has led to order and conformity of moralss in the concern sector. With attachment to the construct of corporate societal duty, concerns have significantly changed their behaviours and engaged in more admirable patterns. For case the issue of pollution to the environment has been expeditiously countered.

3.2 Impact of Positive & A ; Negative CSR on companies ‘ public presentation

CSR has been an of import scheme in reenforcing the public presentation of a concern. This has been on the facet of gross whereby concerns have been able to duplicate their gross revenues from practising efficient CSR enterprises. It is of great importance to observe that, by practising ethical concerns processes, a concern is able to entice the attending of clients and the general populace. With respect to this construct, consumers feel motivated to cover with companies which involve in ethical patterns. In this instance, the gross revenues volumes and profitableness of the different concerns are enhanced therefore bettering the overall public presentation of the concern. Despite that CSR enterprises are dearly-won in the short-run ; they lead to handsome returns to the concern in the long tally. Through the constitution of loyal and trustworthy clients, the concern is able to concentrate on sustainable gross revenues projections and net incomes in future. Additionally, corporate societal duty besides leads to the constitution of sustainable relationship with the community.

Businesss have besides experienced negative impacts from the construct of corporate societal duty. To get down with, the whole procedure of set abouting CSR enterprises in dearly-won strains the fiscal resources available to the corporations. This facet has widely affected little and medium corporations which are non able to afford the high costs involved in set abouting the assorted activities involved in CSR. In respect to this state of affairs, concerns have been made to run on losingss.

3.3 Detailed Analysis of corporate that implements CSR in Kuwait- NBK-ZAIN & A ; EQUATE

Research carried on the corporate pattern in Kuwait has shown a significance pattern of corporate societal duty. In this respect, the concern competition in Kuwait has been really stiff in recent yearss therefore taking to the promotion of CSR. Additionally, public consciousness on the demand for concern to pattern moralss has besides contributed to CSR. To get down with, EQUATE is one of the most profound organisation with have intensively operated to the facet of CSR. An overview and in-depth analysis of the company construction and public presentation has shown a high sense of ethical public presentation. With mention to the corporate mission and vision of EQUATE, the demand of set uping diverse and extremely qualified work force is outstanding. With this in head, the corporation is aimed at run intoing first criterions in all its activities.

EQUATE has continuously been involved in constitution of safety plans all over the old ages. This has been chiefly with the motivation of guaranting that the public assistance of the staff in all company ‘s operations is safeguarded. From another position, the human resources direction of EQUATE hour angle besides been admirable in that it offers the best considerations of all members. In respect to the human resources direction, EQUATE ensures that all staff are empowered with the necessary forte services and competitory compensations therefore being able to increase their degree of motive. Handsome bundles to employees have besides been prioritized by EQUATE therefore guaranting that employees get the optimal compensation for their services.

Significantly, EQUATE has been categorized as the first company in Kuwait to offer full wellness insurance to its employees. This is a societal development that has ensured the wellness of employees and their households. This issue of wellness is a cardinal factor in the sustainability and continuity of the human society and ought to be enhanced. This has been efficaciously been shown by EQUATE. The company has been able to offer interesting occupations to the society therefore guaranting that they are given an chance to better their public assistance. In add-on, the construct of community authorization and enlightenment on of import life issues has besides been fostered by EQUATE. Based on this phenomenon, the CSR enterprises undertaken by EQUATE has lead to important betterment of its public presentation.

NBK has besides been involved in admirable patterns in the market which has led to its present place. To get down, NBK- has been involved in ethical concern patterns which have led to act upon to other corporations within the banking industry in Kuwait and other parts of Asia. Apart from ethical concern patterns, NBK has involved itself in intensive sponsorship and contributions to the hapless communities. For case, the corporation has started and funded many educational plans which had impacted positively on the people.

NBK has besides been involved in different human resources development and considerations. For case, “ it has placed the support of the health care sector on its precedence list, it has an NBK specialized Children ‘s infirmary that exceeded KD 4 million. ”[ 15 ]. In 2008, it launched a public safety consciousness run “ Think Twice ” . This twelvemonth long run involves administering power salvaging visible radiation bulbs, and besides collaborated with “ Green Target Company ” to originate recycling in the state. to offer interesting occupations to the society therefore guaranting that they are given an chance to better their public assistance. In add-on, the construct of community authorization and enlightenment on of import life issues has besides been fostered by NBK. On this phenomenon, the CSR enterprises undertaken by NBK have lead to important betterment of its public presentation.

3.4 CSR Internationally- General Motors, BP, Coca-Cola

On the other manus, research and analysis carried on the globally has shown that transnational corporations involve in intensive CSR enterprises. Precisely analysis of multinationals like General Motors, and Coca Cola has shown important sense of CSR. To get down with General motors has been involved in sponsorships and contributions to the hapless communities. In this instance, General Motors has been really witting about the public assistance and involvements of the populations of the parts of operation. Various community undertakings like schools, dikes, infirmaries among other societal comfortss have been established with the enterprises of general motors.

Coca-Cola has besides been involved in intensive CSR enterprises which are aimed at bettering the public assistance of the general populace. From another position, the human resources direction of Coca-Cola is extremely efficient in that it offers the best considerations of all members. In respect to the human resources direction, Coca-Cola ensures that all staff is empowered with the necessary forte services and competitory compensations therefore being able to increase their degree of motive. Handsome bundles to employees have besides been prioritized by Coca-Cola therefore guaranting that employees get the optimal compensation for their services. Coca-cola has besides been involved in ethical concern patterns through proper pricing and quality.

On the other manus, Coca-cola has been take parting in excessive contributions and sponsorships which are aimed at bettering the public assistance of the people. This has been efficaciously been shown by Coca-Cola. The company has been able to offer interesting occupations to the society therefore guaranting that they are given an chance to better their public assistance.

3.5 Comparison between the corporate in Kuwait and Global corporate that implement the CSR

Based on the research and analysis of the CSR of Corporate in Kuwait and the Global corporate, important differences and similarities have been identified. The CSR of Kuwait has been widely carried to heighten the concern public presentation and run into the demands of the corporate members. For case, EQUATE CSR initiatives a fundamentally internally oriented aimed at guaranting the public assistance of the employees is safeguarded. On the other manus, NBK CSR is to a broad extent internally oriented similar to that of EQUATE. Nevertheless, the corporate in Kuwait are besides involved in extended societal developments and sponsorship which are aimed at bettering the public assistance of the communities around. On the other manus, Global corporate CSR enterprises are strictly aimed at bettering the public assistance of the wider populace. The facet of internal issues of the concern is non the major facet of CSR as compared to that of Kuwait Corporate.

The full above corporate have taken the enterprise in seeking to accommodate CSR in their operations. But most of them have non been able to prolong the ideal CSR. Below are the demands to hold an efficient CSR which are difficult to accommodate and even though in Kuwait CSR construct is on the rise there ‘s a batch of consciousness that needs to be done.

Requirements for an Ideal Corporate Social Responsible Corporation

Operate under the Social Accountability International SA8000. It ‘s really hard for companies to be certified by SA8000 as an audit will hold to analyse the company ‘s operations and see if they meet the standards.

Social Accountability Requirements:

Child Labor: This identifies what conditions and paperss are required from the company that recruits immature workers and what environments it should supply.

Forced and Compulsory Labor: Under this standard it explains that a company shall non utilize force or power over its employees for them to work. Meaning that corporate are non allowed to keep back any portion of the forces ‘s wages or paperss ( passports ) .

Health & A ; Safety: The Company is required to supply a safe working environment for its employees. If the company operates in a biohazards environment it should fit the employees with the necessary equipments and garments to see safety.

Freedom of Association & A ; Right to Collective Bargaining: All employees are allowed to organize labour brotherhoods or any organized trade brotherhoods to dicker on their behalf.

Discrimination: The company shall non prosecute favoritism engaging e.g. against race, nationality, sexual orientation and gender. The company must non let any behaviour that ‘s considered against opprobrious e.g the usage of violative gestures.

Disciplinary Practices: The Company must run in a manner that it does non utilize any indecent or penalties that are non respectful towards employees.

Working Hourss: The Company shall follow with criterions and Torahs of working hours and public vacations. If overtime is required so the employee must be compensated for it.

Wage: The company must supply a minimum pay to its plants to guarantee that it meets their basic demand, and in the instance of tax write-offs it shall merely be imposed for disciplinary actions.

Management Systems: The company must admit in composing the company ‘s policy for societal answerability and labour conditions and they must expose the SA8000 criterions in a viewable topographic point in the company where it can be revised.[ 16 ]

All of the above standard ‘s are mentioned in the SA8000 which is a certified societal answerability, and if the company is being certified by the SA8000 it indicated that they are operate in a corporate societal responsible mode.

4.0 Recommendations to foster the CSR consciousness in Kuwait

With respect to the analysis of the state of affairs of Kuwait and the construct of CSR, the undermentioned recommendations are made from the corporate concerns runing in the part. To get down with, the concerns should be more witting about the well-being of the community around instead than fundamentally concentrating on the internal issue of the organisations. For case, the issues and involvements of the wider population should be prioritized so as to guarantee full societal and environmental development. As demonstrated by Coca Cola and General Motors, corporate concern in Kuwait should re-channel their focal point to turn to the issue of the wider population. Additionally, the issue of moralss and morality should besides be to the full addressed by the concerns so as to guarantee acceptableness of the concern operations. On the other manus, the construct of prioritizing of public involvement should besides be reflected in the budgetary

5.0 Decision

Ultimately the extended and intensive research every bit good as analysis of the construct of CSR has shown that it is of profound important to the concern set ups. The chief purpose of implementing corporate societal duty has been to place the concern among the consumers and the general populace. Based on research, it has been noted that, concerns involve in societal undertakings so as to entice the attending of the consumers. In this respect, corporate societal duty has been categorized as portion of the selling communicating schemes of concern which are aimed at positioning the concern. Businesss which have deeply adhered to the pattern of corporate societal duty have been able to efficaciously place themselves in the market therefore being able to increase their gross revenues and profitableness. With this in head, there is great need fro all concern to alter their patterns and follow the pattern of CSR.

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