Category: Social Responsibility

Abstract

The 21st century is being insulated by a concept that originated in the 20th century called corporate social responsibility. Today, due to globalization and internationalization of businesses, most MNCs are under great pressure to embrace socially responsible behavior in their global operation. As this need arises, one is left to ask how well are MNCs able to develop and implement CSR policies in cultures that are diverse and largely heterogeneous from theirs.

Other questions may include: Why is there much greater emphasis for CSR policies than earlier and why are most businesses voluntarily embracing the concepts of CSR? With wide adoption of CSR and companies jostling to design them, what are the overall effects of the policies on the performance of the business? How well can the CSR policies get integrated into the company’s strategy?

Which are some of the dominant themes that guide the CSR policies today? These questions may seem to be ordinary but their relevance and implication to the business world cannot be bypassed or assumed. Therefore, this paper tries to generate detailed information through investigation and analysis of these concepts and largely give precise insights into the concept of CSR specifically in modern economy.

Use of scientific data and information is what guided the research since it is only from such data objective information can be generated. What became true after the research is the fact that CSR as field still need more research work especially due to dynamism being experienced in the business arena. On overall, it was evident that CSR has become an integral necessity in most business and that success and growth of a business today depends on implementing a workable and sustainable CSR.

Introduction

The history of corporate social responsibility (CSR) dates back to almost one and half centuries where organizations discovered that, their role was not only obliged to profit making but also to the development of the wider society. Generally, CSR can be classified into four eras that defined the breadth and growth of the field. Murphy establishes that the period preceding 1950 was largely characterized as, ‘philanthropic’ era whereby most companies got involved in donating to charities^[1].

Prior to the period 1953-67 classified as ‘awareness’ era, there was greater recognition of the larger responsibility of the business and subsequent involvement in various community affairs. During the period 1968-73 termed as ‘issue’ era, most businesses started to pay a lot of attention to the specific issues such as urban decay, racial discrimination, and pollution problems.

Lastly, there was ‘responsiveness’ era which took place between 1974-78 and beyond, in which business entities began to view management and organizational actions more seriously with aim of addressing the issues to with CSR^[2].

In 1953, Bowen published his book, ‘Social Responsibilities of the Business’, setting ground for the beginning of modern literature on corporate social responsibility.

At that time, the author observed that numerous, larger business entities acted, and operated as critical centers of power and decision making where at the same time, actions implemented by the businesses in many ways touched the lives of people involved. In the Book, Bowen raised many questions, for instance, he asked, “what responsibilities to society may businessmen reasonably be expected to assume?”^[3]

In exploring the concept of social responsibility (SR) what exactly did Bowen mean? Defining the concept, the author noted that it refers to, “the obligations of businesspeople to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society^[4].

Therefore, the concept of corporate social responsibility can be seen to have a relatively long history prior to its current usage and understanding. As a result, the aim of this research will be to explore the concept of corporate social responsibility with much emphasis on topical issues.

These include, why modern businesses are increasingly engaging in corporate social responsibility issues; what constitute socially responsible behavior for the business as opposed to the management of corporate image management; and what are the predominant themes arising from the definition of corporate social responsibility and their conceptual value added.

Other issues include how viable can CSR framework be linked to the business strategy and which approach highlights can be considered for CSR across the six dimensions of a firm strategy; how can a model that bridges the gap between CSR definitions and strategy be developed; and lastly what is the impact of CSR on profitability, the benefits and criticisms against CSR. Relevant data and information will be generated from relevant scientific literature.

National culture and social corporate responsibility

GeertHofstede asserted that, “culture is more often a source of conflict than of synergy; cultural differences are nuisance at best and often a disaster”^[5]. The author of the famous five cultural dimensions notes that people working in the international business are confronted with dilemmas on how people in those specific countries behave. Although humans generally assume that almost all people are the same, it generally becomes disastrous when certain ideas and styles are implemented in a particular country, leading to clash of cultures.

In developing the five-cultural dimension model, Hofstede studied each country and produced a score for the country based on power distance index (PDI), individualism (IDV), masculinity (MAS), uncertainty (UAI) and lastly, long term orientation (LTO) where every country appeared to be culturally different from the others based on these factors^[6].

According to Ibrahim Nabir and Parsa Faramarz, concentration on the aspect of social responsibility by organizations is an issue that continues to confront many businesses. For instance, they view social responsibility as, “a process in which managers take responsibility for identifying and accommodating the interests of those affected by the organization’s actions”^[7].

The authors note that there have been many actions and debates among many researchers which in turn have spurred the need for more diverse literature in the field of corporate social responsibility.

Unfortunately, the diverse literatures touch little on the concept of national culture and the way it affects or influences corporate social responsibility (CSR). The observation made by the authors is that numerous existing literature and field data indicate that there is a significant impact of national culture on, managerial values, attitudes, styles, and perceptions depending on the operational environment^[8].

In a detailed study carried out on national cultures of USA and France, the two authors categorize the work done by Bedeian where it was found out that, “it is a well-established fact that different cultures possess different organizational norms and behavior standards and that they recognize these as legitimate forms of influence”^[9].

In another study of American and Australian students undertaking business courses, Dowling and Nagel found out that there existed certain differences between these two groups specifically in their work-related attitudes, a situation that made them to conclude that,” national culture has an impact upon the ethical beliefs and conduct of managers”^[10].

Why modern business are getting involved in corporate social responsibility

Carly Fiorina in 2003 noted that,

” for many years community development goals were philanthropic activities that were seen as separate from business objectives, not fundamental to them; doing well and doing good were seen as separate pursuits; but I think that is changing……………..cutting-edge innovation and competitive advantage can result from weaving social and environmental considerations into business strategy from the beginning”^[11].

The above observation just indicates how social cause has become an issue in almost all quarters of life. In addition, key actors in society are more aggressive in promoting sustainable social welfare^[12].

The dynamics taking place in the business sphere where many business players are yearning and struggling to create a more competitive, productive and knowledge-based economy is in turn forcing business entities to realize that ethics and social responsibility are vital and therefore should be given the necessary attention by businesses. The same businesses are operating the conviction that success in the market place has shifted and in future, it is greatly going to depend on the confidence and respect the people have in the specific business.

Presenting as evidence is the fact that many actors in the field of business are being held morally responsible for the actions and that on increase is the fact that more individuals, firms and companies are in continuous process to improve their business practices. In this case, they are putting more emphasis on both legal and ethical behavior while at the same time accountability increasing at a faster speed.

Consumers are the key stakeholders for any business entity to survive or grow. Earlier, it was considered that only employees were the vital aspects to the company but as reality continued to dawn, many of these businesses realized that consumers could not be sidelined and therefore most businesses have made it a duty to fulfill and to be careful with their social responsibility towards their customers^[13].

With regard to environment, humans beings together with other organisms depend on the resources present in the environment for their survival and as such, humans have an almost natural moral duty to take care of the environment and have respect to the natural order of things.

When compared to other organisms, humans appear to have the role or responsibility of taking care of everything in the universe on behalf of the others. As a result, from the period of creation, although human was given insurmountable authority, the same is expected from him to protect the environment and not at all to disrupt the forces of nature^[14].

In modern world, businesses have appeared to be benefiting immensely by utilizing environment to produce goods and services to meet the needs of the business to prosper; and as a gesture to show appreciation to the environment, businesses are obliged to design and establish corporate social responsibility policies with aim to preserve and maintain the balance of nature^[15].

Further, Roa observes that modern businesses need to establish and implement corporate social responsibility policies emanate from the fact that most of these businesses are discovering that they need to establish good conducts and form positive images among the various people of the community. Because of such established association, there is likelihood that competitive advantage will be accrued on the part of the business.

From this recognition many businesses worldwide are being motivated to respond favorably since such responses of being responsible has resulted into business improving in terms of financial performance and profitability, improved accountability and assessments from the investment community, enhanced employee commitment, decreased vulnerability through stronger relationships with communities and improved reputation and corporate image building.

What constitute socially responsible behavior for the business?

Today, corporate social responsibility is being undertaken more on voluntary basis rather than as a legal obligation. Although some legality are intertwined in some CSR, the dynamism and increasing stakeholders demand for businesses to be more responsible is acting out to be the firm premise upon which most businesses are forced to incorporate and implement corporate social responsibility.

Francoise Quairel-Lanoizeelee makes precise argument by saying that CSR is connected with sustainable development. His claim is grounded in United Nations assertion that many corporations and businesses have a role, which they need to play in sustainable development, and this can be achieved by managing their operations and stimulating economic growth while in the same measure designing and implementing protection mechanisms and promoting social responsibility^[16].

A derived idea from this is that a business or firm should be seen to be part of the society where its concern for environmental and social issues needs to be reflected in their strategic management plans and policies.

When it spreads its wings into the international environment, the business is required to contribute to the solution of all vital problems concerning world politics specifically with regard to the environment, the fight against poverty, prevention of war and conflict without forgetting the promotion of human rights, good working conditions, and social stability.

Francoise Quairel-Lanoizeelee finally concludes that, “corporate social responsibility implies the conscious contribution of the firm to engage in the problems of the world community as revealed by the different declarations and statements of intent by international bodies of the United Nations”^[17].

Taking the case and argument by the European Commission, it becomes evident that for business to be regarded as socially responsible, it needs to show concerted efforts in promoting and enhancing human rights, the environment or good relationships with others key stakeholders^[18].

The modern world can be seen to be transforming the institutions of economy whereby, to be viewed as socially responsible, efforts by the business in areas such as human rights issues, environmental degradation concerns and also world conflicts have to be largely reflected in the operations of the business.

On their part, Kumar and Sharma observe that a business can qualify as a socially responsive entity when such business participates in finding solutions to social problems in the community. When the management of such business device initiatives to address the social problems then they are likely to receive considerable public approval for their actions.

Therefore, today business is supposed to facilitate or show social-responsiveness that in turn contribute to social responsibility hence an entity is largely viewed to promote two broad themes of social responsibility: involvement in activities that are geared to prevention as well as solving social problems; and organizations are seen to be the most effective problem-solving organizations in capitalist society^[19].

The two authors go ahead to construct a continuum of social responsibility in which they identify the three meanings of social responsibility. First, on one extreme of the continuum is social obligation-which constitutes business behaviors that shows and reflects a business’s responsibilities as outlined both legally and economically.

Second, the middle part of the continuum largely constitutes social reaction-which includes the behavior type that re generally demanded by various groups that are concerned with the actions of the organization. Lastly, the far extreme is composed of social responsiveness-that is, behavior that is largely a reflection of anticipatory, proactive and preventive expectations^[20].

Specifically, a business will be socially responsible when, within its limits, it is able to provide the following eight categories of socially responsible actions.

• A business should manufacture and distribute products and services that are safe, reliable and of exemplary quality;
• Fostering marketing practices,
• A business needs to be truthful and complete especially in its product advertising;
• Business employees should be effectively prepared to perform duties well and also be subjected to continuous re-training rather than laying off the employees when a new technology is adopted;
• With regard to the environment, a business is regarded to be socially responsible when it is able to implement a production technology that is able to reduce the amount of pollutants produced by the manufacturing process;
• With regard to employee relations, a socially responsible business is one that is able to provide benefits to employees while providing a satisfying and enriching job environment;
• With regard to do with employed minorities of the society, a business is seen to be socially responsible when it is able to provide and promote employment opportunities to the minority groups;
• Be able to participate in providing a clean, safe and comfortable working environment that enhances the safety and health status of the employees^[21].

Therefore, for a business to be considered as socially responsible in terms of behaviors then it has to be seen or it has to integrate the above outlined measures in its management strategies.

Predominant themes arising from the definition of CSR and their conceptual value added

The recent decades have witnesses much involvement in seeking to understand better the concept of corporate social responsibility. First, many debates continue to revolve around the role that corporate social responsibility plays in the society, and as a result, standards governing CSR have been defined differently by the ideological orientation of each society^[22].

The authors further notes that, “high performance and high integrity are good for the bottom line and that citizen require a rigorous, unwavering compliance with the law that strictly blends and adhere to capital performance with integrity to never allow that commitment to corrode those principles…”^[23].

Critics of CSR pursue their stand by claiming that CSR possess the potential to be “insulated, self-serving and self-affirming-often to the detriment of the society where it is supposed to be social, political, technical, and financial benefit…”^[24].

No fierce debate has been witnessed in CSR like that initiated by Milton Friedman in 1970, who boldly asserted that CSR was an absurdity. The period that followed witnessed those who supported and defended Milton on one side and those who criticized him on the other side. Friedman argued that companies that were publicly managed had only one responsibility-to increase profit for the organization which it him was an efficiency paradigm of organizational starling performance^[25].

He went further to claim that companies should only give wages and salaries to employees to a level they are able to operate efficiently while at the same time they should not hurry to pay taxes. Those who champion and defend this position claim that, there exists no any viable and exhaustive data, which explains or shows that there exists a positive relationship between the numerous activities of CSR and the corporate financial performance in terms of profits^[26].

The modern themes underlying the concept of corporate social responsibility can be traced to the origin of the concept itself. For instance, Arthur Page, a renowned historian and editor of the World’s Work did a detailed work of analyzing the origin and development of the CSR concept.

Working on the same works by Page, Remund did a literature examination of 180 issues of the World’s Work and noted that CSR rested on five key themes: “environmental protection, labor rights, consumer protection and education, child welfare and corporate transparency”^[27].

During this period, Page was more involved in Agitating for,” sustainability in logging practices, labor rights for African-American cotton workers, better safety measures for underground miners, greater consumer education about investment banking, an end to child labor, and more corporate transparency”^[28].

Prior to the year 2000, Crane, McWilliams and Matten noted that CSR themes were shifting from over-concentration on the theoretical orientation to empirical research and new modern themes revolved around stakeholders theory, business ethics, sustainability and corporate citizenship^[29].

Writing during the same period in the year 2000, Bryan Husted developed and outlined a contingency theory of corporate social performance (CSP) where he advanced the argument that the theory fitted well between the nature of the social and its subsequent strategies and structures. As such, modern themes of CSR revolve around corporate social responsiveness, issues management, and stakeholder management^[30].

During the 2001-2, other numerous researches were conducted that revealed the broadening themes in CSR. For example in 2001, Smith et al., examined the extent to which characteristics of diversity and stakeholder role influence corporate social orientation, and Jones and Murrell in 2001, established how a business public recognition for excellent performance has the ability to serve as a positive signal of the business performance to the shareholders.

In 2001, Zyglidopolous studied the impact of accidents on a business’s reputation for social performance, and Schwartz and Carroll in 2003 developed and presented a three-domain approach that constitute the main themes of modern CSR and in the model the authors postulated that modern CSR themes centers on economic, legal and ethical aspects^[31].

How viable can CSR framework be linked to the business strategy?

Bilson writes that,“an effective strategic social responsibility framework aligns community efforts with core business strategy, company expertise and market needs”^[32]. When a business is able to develop a strategy incorporating the three main actors outlined above, then possibilities are that the business will manage to empower the society in addition to building its own reputation and income stream.

In creating a framework that aligns the business strategic goals to the CSR, key steps have been outlined which when followed, there will be numerous success.

First, the business should develop a value proposition, on which abilities and guideline to sell corporate social responsibility needs to originate from the board. At the same time, the business needs to indicate to the board how viable the business will be socially responsible while the financial prospects and fortune of the business remains healthy and sound. Why is the board important in all these?

The board as the vital organ of the business plays and assumes a vital role that frequently has been seen to “shape and develop the value proposition, especially when performing business performance management”^[33].

Second, the business needs to engage the larger community, which will in turn lead to sustainability. Building on this premise, businesses are advised to seek by identifying the various social opportunities in which the business can get involved in, while at the same time remaining and improving long-term competitiveness of its overall business fortunes in the environment.

As such, the business needs to draw wider participation of the community it is responsible to without removing or divorcing the business’s expertise from the process^[34]. Therefore, the premise of this strategy I that the business while reinforcing and pursuing its strategic goals needs to modify value chain activities so that the larger society can benefit.

Third, business needs to participate in a continuous process of measuring and weighing corporate social responsibility efforts and results. First, it is a basic fact that anything that is measured is the one that will be accomplished or one that will draw sustainable efforts to accomplish it.

This fact does not run away from businesses that are involved in corporate social responsibility activities whereby they are required to establish sustainable measurability tools, which have the ability to conduct analysis in the most cost-effective, and beneficial way as far as CSR expenditure is concerned^[35].

On his part, Collings Rebecca observes that for an organization or business to be regarded as socially responsible, it has to engage in promoting and facilitating good things specifically in the eyes of its stakeholders^[36]. The process of finding out what each of these stakeholders considers, as the right thing generally has to involve carrying out dialogue with the concerned stakeholders then afterwards make changes to the existing business behavior. Again, how is behavior changes monitored?

The suggestion given is that business should create sector benchmarks and other necessary performance indicators and the commitment of the business to fulfilling them should be characterized by continuous measurements. The author note that, “it is a forensic process that involves year-on-year data collection and analysis process, that apart from addressing the weaknesses and threats in the environment it should at the same time investigate and identify strength and opportunities present”^[37].

Summarizing research on CSR strategy, WAL-MART publication outlined the basic but fundamental steps to realization of a viable CSR strategy. The advice was directed to businesses that senior leadership and management of the business has to make an authentic, firm, and public commitment to CSR efforts and also engage with them; determine top three business objectives of the company and develop CSR goals that will contribute to the achievement of those business objectives.

After the process of determining business objectives has been done, there is now need to align goals with the firm’s core competencies; integrate CSR efforts into the governance of the business and into existing management systems; and lastly, there should be establishment of clear performance metrics, or key performance indicators to measure the impact of the CSR effort^[38].

Which approach can be considered for CSR across the six dimensions of a firm strategy?

Strategy has been depicted to be concerned with understanding and addressing issues that have the ability to influence a business potential and capability to realize its mission and broader objectives. Hence, within these perspectives, a strategy is concerned with six issues.

What is business participating in order to realize long-term goals; what are the current internal and external issues that are likely to affect the business ability of realizing the established strategic issues; which markets offers the business the greatest chances to compete; what specific products and services suites the customers in the identified markets; how well is the business internally structured in terms of key resources; and which strategies can be adopted for the business to excel in the identified markets^[39].

Developing a model, Carroll in 1979 identified key responsibilities of the firm to involve: the economic responsibility to generate profits; legal responsibility to comply to various laws and treaties that the business operate within; ethical responsibility to meet social expectations by avoiding social injury, respecting moral rights of people and largely doing what is right; and lastly, to foster those behaviors and activities the society deem to be right for the business.

Therefore, in building a CSR strategy that address the six dimensions, the strategy should be based on mission that integrate strategic issues, competitive advantage, business resources, customer needs, and the market forces. In essence, these aspects will interrelate and interact to produce a viable CSR model that covers the six dimensions of the business strategy.

What is the impact of CSR on profitability, benefits, and criticisms against CSR?

Studies done have indicated that there exists a positive relationship between CSR and business financial performance. Studies by Beliveau, Cottrill and O’Neil in 1994; Sen and Bhattachanya in 2001; Rochlin, Witter, Monagah and Murray in 2005 conclude that, “CSR performance can increase market clout if it relates to product quality and consumer personal preferences views on key social issues”^[40].

Further, research by Gildea in 1994 established that, when a business formulates good CSR decisions, there is high potential that the business will realize increased sales and good reputation on its management.

Their data analysis also revealed that, 34 per cent of consumers expressed their position not to make any purchases from a business that they thought was unethical, 16 per cent demonstrated that they always seek information concerning a company’s practices and ethics before making any purchase decision, and another 50per cent of consumers indicated that they were not ready at all to make purchases in any company they perceive not to be socially responsible^[41].

Although many other researchers have criticized the role of CSR claiming that it only siphon financial and other key resources of a business, the wide evidence shows that, CSR is becoming one of the determinant for a business to succeed and when a business is seen or regarded to lack CSR then it is as well as dead.

Conclusion

Globalization and internalization of businesses is bringing new challenges to both the corporate and social world. As business strives to produce goods and services using the available resources, it is becoming clear that social and environmental responsibilities are intertwined in most strategies of the business. CSR policies are becoming the new faces of modern business and those that have effective CSR gain both social and economic approval from the public.

Essentially, sustainable development, a new and widespread anthem in 21st century, is rooted in CSR hence making it a key priority for business to adopt them for survival. The overall observation that can be made I that when properly and efficiently designed and formulated CSR have the capacity to impact positively on the business in terms of financial performance and social approval.

Bibliography

Anderson, J. W., Corporate social responsibility: guidelines for top management, ABC-CLIO, NY, 1989.

Crane, A., A., McWilliams and D Matten, The Oxford handbook of corporate social responsibility, Oxford University Press, London, 2008.

Galbreath, J., Building Corporate Social Responsibility into strategy, Curtin University of Technology, Australia, 2008.

Kotler, P. and N. Lee, Corporate social responsibility: doing the most good for your company and your cause, John Willey and Sons, M. A., 2005. Web.

Kumar, A., and R. Sharma, Principles of Business Management, Atlantic Publishers and Distributors, New Delhi, 2000. Web.

Roa, F. C., Business Ethics and Social Responsibility, Rex Bookstore Inc. Manila, 2007. Web.

Rendtorff, J. D., Ethics and Legitimacy of Corporations, Copenhagen Business School Press, Copenhagen, 2009. Web.

WAL-MART, Building your CSR Business Strategy. Web.

Werther, W., and D., Chandler, Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, SAGE, CA, 2010.

Footnotes

1. A. Crane, A. McWilliams and D. Matten, The Oxford handbook of corporate social responsibility, UK, Oxford University Press, 2008, p.25.
2. A. Crane, A. McWilliams and D. Matten, P.25.
3. A. Crane, A. McWilliams and D. Matten.
4. A. Crane, A. McWilliams and D. Matten.
5. G. Hofstede, Geert Hofstede Cultural Dimensions, Itim International.
6. G. Hofstede.
7. I. A. Nabir and P. Faramarz, Corporate social responsiveness orientation: are there differences between U.S and French managers? Review of Business, 1.
8. I. A. Nabir and P. Faramarz, ibid.
9. I. A. Nabir and P. Faramarz, ibid.
10. I. A. Nabir and P. Faramarz, ibid.
11. P. Kotler and N. Lee, Corporate social responsibility: doing the most good for your company and your cause, MA, John Willey and Sons, 2005, p.1.
12. P. Kotler and N. Lee,p.2.
13. William Werther and David Chandler, Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, SAGE, CA, 2010.
14. Jerry W. Anderson, Corporate social responsibility: guidelines for top management, ABC-CLIO, 1989.
15. F. C. Roa, Business Ethics and Social Responsibility, Manila, Rex Bookstore Inc., 2007,p.201.
16. J. D. Rendtorff, Ethics and Legitimacy of Corporations, Denmark, Copenhagen Business School Press, 2009,p.151.
17. J. D. Rendtorff, p.152.
18. J. D. Rendtorff.
19. A. Kumar and R. Sharma, Principles of Business Management, New Delhi, Atlantic Publishers and Distributors, 2000,p.572.
20. A. Kumar and R. Sharma,p.573.
21. A. Kumar and R. Sharma,p.576.
22. R. L. Heath and L. Ni, Corporate Social Responsibility, Essential Knowledge Project, Institute for Public Relations, 2008, p.1.
23. R. L. Heath and L. Ni.
24. R. L. Heath and L. Ni.
25. R. L. Heath and L. Ni.
26. R. L. Heath and L. Ni.
27. Science Blog, CSR origins earlier than supposed, 2010, p.1.
28. Science Blog,p.1.
29. A. Crane, A. McWilliams and D. Matten,p.39.
30. A. Crane, A. McWilliams and D Matten,p.39.
31. A. Crane, A. McWilliams and D Matten,p.40.
32. J. Bilson, Framework for Corporate Social Responsibility, Online Article, 2010,p.1.
33. J. Bilson, p.1.
34. J. Bilson.
35. J. Bilson.
36. C. Rebecca, behind the brand: Is business socially responsible? Consumer Policy Review.
37. C. Rebecca,p.1.
38. WAL-MART, Building your CSR Business Strategy, n.d,pp.7-9.
39. J. Galbreath, Building Corporate Social Responsibility into strategy, Curtin University of Technology, Australia, 2008,p.2.
40. R. L. Heath and L. Ni,p.1.
41. R. L. Heath and L. Ni.

Introduction

Companies are concerned about the relation they maintain with their operating environment. Consumers have become enlightened; they are demanding a share of a company’s profits through corporate social responsibilities (CSRs) activities (Mitsubishi Corporate website 2010, b).

On the other hand, companies are finding it ethical to have CSRs programs in their corporate functions. CSRs are commitments that a company undertakes on behalf of the society. They take different forms like environmental conservation, education policies, health and roads construction among others. It is seen as a way of giving back to the society that has supported a business.

Mitsubishi motor company is an international automobile company ranked number six in volume and sales in Japanese motor industry. In the world, the company is rank eleventh largest automobile company. The company was founded in 1870 by Yatarō Iwasaki as a shipping company, it was then called Mitsubishi Shokai; it diversified into motor manufacturing industry in 1970.some of the company’s brands include Mitsubishi Lancer and Galant.

It manufactures both passenger and commercial vehicles. To maintain good relations with its stakeholders, the company have embarked on various social corporate responsibilities (Brown 2008). The company approach CSRs from an internal and external approach. Mitsubishi company has divided its social responsibility into three main areas; compliance, customer, and safety. To attain these broad categories of corporate social responsibilities, the company have embarked on various policies.

The case against Mitsubishi

In 2004, Mitsubishi Company had issues with the quality of various parts of its products. Mitsubishi Endeavour brand was the main brand in the period and proved unsatisfactory to the communities. The car failed the test of carbon emission per trouble code PO453: EVAP Control System Pressure Sensor: this made the emission from the product higher than the expected rate. These emissions lead to a condemnation of importation of the model in major European countries.

In the same year, the car was condemned of having vibrations and making unnecessary noise at a speed of only 30-40 mph. The comfort that the people and community wanted could not have been attained with such a noise; this was on top of batteries that were not dependable (Wisner, and Ira 1996). In the years 2007 to 2009, the company had the least satisfaction in a comparison of ten major motor companies in the world (Mitsubishi Motor Corporation 2010, c.).

The company has recalled a number of default vehicles in the United States and other parts of the world. For example in the United States, the company have recalled over 3000 cars in the wave called the eclipse saga (Gutman 2006). The company’s reputation was spoil. There was need to restore the trust and confidence of community in its products. The same model had a problem in electric engineering where it had electric shocks and reduced the reliability that people had on the vehicle.

The performance of the company in 2004 was-wanting, it did not satisfy its customers as it is expected. The defects of the vehicles lead to a population that is not satisfied with the company’s products. This led to reduction in sales and erosion of customer loyalty.

The case for Mitsubishi

In July 2008, the company made a commitment to the ministry of energy that it will check its emissions in the efforts to protect the environment. The company took an approach from internal process automation and creating efficiency to the programs that it embarked on in the society.

Internally the company has embarked on processes that reduce emissions from its production units. It has ensured that there is recycling of products and water. The company aims at developing good relations with its stakeholders and customers by ensuring it has upheld to ethical code of conduct and respects national and international business laws (Sun 2010).

In 2009, the company launched eco-cars also called i-MiEV, with the aim of protecting the environment. The car uses electric charging system, thus it will reduce over reliance with fossil fuel as its source of energy.

Carbon emission from the new model is also minimal; this minimizes air pollution. Communities at international and national level are concerned about global warming; the new invention is seen as a move to reduce the rate of global warming since it has minimal emission of green house gasses (Visser, Dirk, Manfred, and Nick 2007).

To see the dream of having a world with minimal carbon emission, the company has entered in strategic alliances with other interested parties. The alliance is called CHAdeMo, which is derived from the statement “move by changing”. Among the partners in the sector are motor manufacturing industries like Toyota Motor Company and Nissan, other players are charger-manufacturing companies.

The major approach that the company has taken as far as protection of the environment is concerned is automating and embarking on innovation to manufacture environmentally friendly cars, however, in the efforts to restore the already damaged environment, the company sponsors various tree planting and garbage collection exercises.

Volunteer employee with some support of the company manages and maintains “Pajero Forest” project. The project and families involved is responsible for maintaining three-hectare forestland located in Yamanashe preference; the project also educates people on the need to plant trees (Mullerat, and Daniel 2005).

The company’s vision 2020 on environmental conservation aims at reducing carbon emission from driving of its motor vehicles by 50% of the rate of emission that was experienced in 2000. This will be attained through adopting new technologies and innovating more ecological friendly motor cars. The electric motor production is expected to be on the rise where by 2020, the company aims at having 20% of its product being electric vehicles (Fraedrich, Charles, and Linda 2009).

All branches and sales point internal process pollution production is expected to have reduced by 20% by 2020.this will be attained by adopting better production methods and embracing the benefits of recycling. Before then, the company is developing appropriate infrastructure. Other than environmental concerns in the company, the company have other CSRs. They include;

The company have a program called “Support the next generation”, this program is targets at creating interest in children and building a culture of traffic safety at an early ages. There is a toll free number that children can call and ask about any issue they want to know about motor.

It also visits schools to interact with children. The company sponsors a program of making children books that can be used for learning traffic and motorcar developments. It also accepts learning tours in the company where in 2009; the company experienced 38,000 visitors.

The company has a program called STEP program; the program sponsors certain projects within the society. In 2010, among the recipients of the program were children sponsorship (NPO world vision) and children forest program (OISCA).

The company have a program called “eco-minded initiative” which have conducts and annual exercise of collecting old books , materials, post cards, CDs and DVDs then sell them to and the money gotten used to sponsor Sutenal Seikatsu and child’s dream fund program (Mitsubishi Motor Corporation 2010, c)

Social corporate responsibilities create a better understanding and relation between a company and the community. Mitsubishi has created better working condition that made the company go through global financial crisis of 2007 successfully (Pernille 2000).

Sales in the United States, Japan, Asia and Europe reduced between 2004 and 2010, however there is hope that the trend will be reversed as the world recovers and realizes the need for eco-friendly cars. In 2009, the company was able to recover from an operating loss suffered in 2008 of 54,883 million Yens to make a profit of 4,758 million Yens (Mitsubishi Motor Corporation 2010, a).

The company efforts in maintaining good relations with the customers is bearing fruits since there is an increased customer satisfaction and customer loyalty. Customer needs are met and the close interaction has assisted the company understand what the people want in the society.

Concluding remarks

Companies are more concerned with the relationship they maintain with their customers. Despite having problems in 2004, Mitsubishi Company has embarked on corporate social responsibility programs in an effort to restore and maintain good relations with its customers. In 2004, the company’s supply chain management allowed some defective raw materials to find their way in the company leading to low quality products. The approach taken by the company targets both internal (production processes) and external (products) processes.

To restore and conserve the environment, the company has embarked on massive public education in the need to conserve the environment. Internally it has embraced technological development and innovations to produce fuel-efficient cars and eco-friendly cars. Despite the efforts taken by the company, it is still dragging in the level of customer satisfaction. It needs to have a macro approach to environmental conservation measures (MacLeod, Lawrence, Michael , and Terry 1999).

Recommendations on areas of improvement

The company can be applauded for the efforts that it has taken in conserving the environment and ensuring communities’ safety is enhanced. However, there is more that the company can do. So far, the electric vehicles that have been produced are small private passenger’s cars.

There have been no moves to expand the technology to commercial vehicles; this means that there still is carbon emission from its products. The products although are readily available in the market, their accessibility is limited to Japanese and some American and European markets.

There has been no effort to have the products in developing countries. If the current concerns of global warming are to be won, then companies are not supposed to limit their effort in one country rather they are supposed to look for international solutions (Gyorgy, and György 2006).

The company should analyze reports on the level of satisfaction that its customers derive from its products; compare it to other companies in the same industry and make strategic changes were necessary. This should be the starting point in implementing policies that directly target certain problems (Wheeler, and Maria 1997).

The company’s quality assurance team should be more robust in their duties. Almost on yearly bases, there are defects in the company’s products making the customer un-satisfaction. The problems range from brake failures crushes defects, tires, gear systems and electric system among others. The problem can be traced in supply chain management operated by the firm that do not guarantee quality products in the firm (Michael 2009).

Reference List

Brown, Alan S. 2008. “CUSTOM MOTOR?.” Mechanical Engineering 130, no. 9: 52.

Fraedrich, John, Charles Ferrell, and Linda Ferrell .2009. Business Ethics: Ethical Decision Making and Cases. New Jersey: Cengage Learning.

Gutman, Howard. 2006. Mitsubishi Transmission Problems. FREE INITIAL CONSULTATION. Web.

Gyorgy, Szell,and György Széll. 2006. Corporate social responsibility in the EU & Japan. Indiana: Peter Lang.

MacLeod, Mary D., Jr., Lawrence L. Garber, Michael J. Dotson, and Terry M. Chambers. 1999. “The Use of Promotional Tools in the Motor Carrier Industry: An Exploratory Study.” Transportation Journal 38, no. 3: 42.

Michael, Brian. 2009. “Comparing Motor Technologies.” Air Conditioning Heating & Refrigeration News 238, no. 15: 18.

Mitsubishi Motor Corporation. 2010,a. Financial Statement Summary.

Mitsubishi Corporate website. 2010,b. Mitsubishi. Online.

Mitsubishi Motor Corporation. 2010, c. Social and environmental report 2010.

Morley, Elliot.2010. Low carbon technologies in a green economy: fourth report of session 2009-10, Vol. 1: Report, together with formal minutes, Volume 1.London: The Stationery Office.

Mullerat, Ramon, and Daniel Brennan. 2005. Corporate social responsibility: the corporate governance of the 21st century. New York: Kluwer Law International.

Pernille, Rudlin. 2000. The history of Mitsubishi Corporation in London: 1915 to present day. London: Routledge.

Sun, William. 2010. How to Govern Corporations So They Serve the Public Good: A Theory of Corporate Governance Emergence. New York: Edwin Mellen.

Visser, Wayne, Dirk Matten, Manfred Pohl, and Nick Tolhurst. 2007. The A to Z of Corporate Social Responsibility. London, England. New York: Wiley.

Wheeler, David, and Maria Sillanpää. 1997. The Stakeholder Corporation: a blueprint for maximizing stakeholder value. London: Pitman.

Wisner, Joel D., and Ira A. Lewis. 1996. “Quality Improvement Programs in the Motor Carrier Industry.” Transportation Journal 36, no. 2: 26.

Introduction

Most companies in the modern day world are facing a new role; to meet the societal expectations through what is referred to as the corporate social responsibility, (CSR). Corporate social responsibility is defined as the expectation that a company ought to fulfill with the aim of positively impacting the social environment. This is the requirement for an organization to be referred to as a good corporate citizen (Walsh & Weber, 2003).

There are different schools of thought regarding the need for and against social responsibility. The proponents of social responsibility argue that it is no longer ethically acceptable for an organization to continue making profits without caring about the impact of its actions on the very parties that help it make the profits.

They therefore propose that a company should exercise due care and social responsibility that ensures it is a good corporate citizen. The opponents of social responsibility argue that it is the duty of the government to look after the society social welfare since the organizations pay taxes to the government (Goswin & Hai, 1990).

They therefore charge the government with the responsibility of looking after the societal welfare. This essay analyzes company Q’s attitude towards corporate social responsibility. It also recommends areas of improvement regarding the company’s attitude.

Company Q’s attitude

From the information provided, the company does not support the concept of social responsibility. First, the company has closed down several stores because those stores are consistently losing money. This could be caused by several factors. One of the possible reason is that the authority does not provide adequate security to the business environment thus exposing the businesses to the risk of losing money (Goswin & Hai, 1990).

The government, has therefore, neglected its responsibility to provide a social need such as security. The company is therefore reluctant to participate in the social responsibility exercise since it feels the government needs to play its role.

The scope of CSR covers the legal, ethical, commercial, and public expectations of the company. As such, Q company seems to be flaunting some of these scopes. For instance, the community expects the grocery to stock some organic foods. This is to the welfare of the customers and the community at large. The company was compelled to introduce these organic products though in small quantities.

Corporate social responsibility also entails the company adherence to the ethical expectations. The company chooses to throw away day old food instead of donating to the food bank. This seems like an unethical act considering its lack of donating and lack of trust on its employees.

Areas of improvement regarding the social responsibility of the company

One important way of improving social responsibility, is establishing the true opinions of the company’s stakeholders. The different stakeholders, both internal and external have a role to play in determining the success of the company’s social responsibility. Most companies are using social responsibility to generate more revenues through indirect contribution to the society (Goswin & Hai, 1990).

Most activities are now advertised through the media and companies go public about their social responsibility activities. Q company therefore needs to critically evaluate the stakeholders’ view on its attitude and then devise way and means of improving its CSR. One important way is developing trust on its employees. This will definitely impact on its face internally and as a result, the employees can become its external agents to the society.

The other area of improvement on company Q is that the company should communicate to the external stakeholders about their social responsibility objectives. This would help reduced the perceived attitude about CSR. Once the company communicates this to the external stakeholders such as the suppliers, it would set a first step towards recovering the negative perception from the general public.

The company would also adopt a system where it would sell products that promote consumer welfare. This would not only act as a double bottom-line, but also communicate to the public about the company’s improved social responsibility. The other importance of such a move is that it would also show the commitment of the company in delivering quality products to the public.

In the recent past, the consumer world has experienced a tremendous metamorphosis in that consumers not only look at the prices charged for the goods and services but also the future benefits of the company in terms of their welfare.

Conclusion

The topic of corporate social responsibility has become a center stage to many organization. Over the recent past organizations are even evaluated and ranked in order of adherence to social responsibility. The society has in effect, become an inevitable group of stakeholders whose interests have risen to become part of priorities among many companies. Company Q should therefore, re-evaluate the essence of social responsibility and have an objective look at the benefits.

In addition the company should evaluate the cost benefit aspect of the social responsibility while regarding the financial and the non financial aspects of the social responsibility. The management of company Q should therefore have a holistic approach in improving the social responsibility attitude of the company.

References

Goswin, S., & Hai, Y. (1990). Attitudes Towards Corporate Social Responsibility and Perceived Importance of Social Responsibility. Journal of business ethics, 71-77.

Walsh, J., & Weber, K. (2003). Social issues and management: Our lost cause found. Journal of Management, 21(3), 859-881.

Introduction

Globalized and local entities have held the concepts of Corporate Social Responsibility (CSR) in order to achieve varied business objectives that match the current dynamic markets. This paper focuses on the different strategies used by organizations that chose to work with local communities, and their effectiveness in conducting themselves as corporate and global entities.

According to IISD (2011), CSR is the internal enactment of regulating policies, which ensures that the involved organization conforms to the legal, social, environmental, and ethical concerns of the society. Numerous organizations have realized the importance of practicing CSR in enhancing their market share and the overall public perception.

CSR involves the utilization of set standards within the company to ensure that the company acts responsibly and meets the aforementioned requirements.

Quality is one of the ways through which an organization can express its commitments to CSR (Calabrese 2004). It means that the involved organization care for its clients hence endeavours to serve them with the best. CSR is an in-built drive governed and steered with appropriate policies through viable business models.

Focusing on the different strategies used by organizations working with local communities, and their effectiveness to conduct themselves as corporate and global citizens

Viable CSR starts with mutual cooperation with communities to enhance equality, impartiality, and nurturing of the unique potentials presented by different individuals. Creating regulations that enhance adherence to ethical and human rights concerns is critical within organizations. CSR endures to achieve both internal and external compliances to the moral demands of the society.

This is achievable through stringent observation of the self-regulative policies and ratification of competitive business models within the organization. CSR strives to capture the community with ethical products and by-products that do not disfavour the community (Bidgoli 2006). It relates to the aspects of sustainable development where the industrial activities of today do not compromise the survival of tomorrow’s generation. Most organizations have formulated a unique approach to CSR as indicated in a while.

Such companies have long-term strategies to ensure their compliance with the legal, ethical, social, and environmental demands of the concerned societies. For example, GM Motors strives to provide the society with due comfort as one drives with a guaranteed safety on the roads (Schwartz 2011).

As a strategy, policies and business models that ensure the achievement of these provisions constitute the ethical and legal aspects of CSR. In this context, the organizations have developed safety mechanisms to guarantee this provision.

To improve the safety skills of a community, most organizations have organized education on issues affecting proper living. This aspect indicates the significance of CSR and its contribution to the corporate schemes (ETATS-UNIS 2007).

Providing the society with quality products is one of the ethical concerns of CSR. It is the mandate of the concerned organization to achieve value for money. Additionally, it is ethical to produce quality products that will eventually impress clients. Most organizations are in the forefront in quality provision.

Additionally, most organizations understand the benefits of quality products not only to the clients but also to the company’s growth (Stoian & Zaharia 2012). The strategies used by organizations working with local communities to embrace quality have been lucrative to the concerned entities.

The aspects of quality contribute vividly in the attainment of CSR objectives as mentioned earlier. Organizations focus on the product quality, excellence, and management quality (IISD 2011). These efforts eventually influence the company’s growth with successful results.

As another strategy, most organizations enhance the success of the society through ample impacts of CSR. The sustainable and profitable expansion of the company indicates economic sensitivity to the society. Nissan’s conformity to the international legal requirements, ethical issues within the industry, and environmental concerns form the substantial aspects in the realms of embracing CSR.

This provision contributes to the company’s CSR achievement. Most organizations trust the concerns of the public and endeavor in their capacity to ensure that the public attains their ethical rights for a sustainable development (Hunter & Piltzecker 2003). Recognizing the significance of every stakeholder in the operational context is a crucial phenomenon in most companies.

Thus, the company strives to attain beneficial management practices as it endures to conform to the demands of the CSR and dynamic world markets. It is evident that the integration of the CSR principles into the company operation enhances the aspects of compliance demanded.

Precisely, CSR endures to manage the viable business processes in order to inflict a remarkable impact on society. Another example is that Coca Cola Company has strived to achieve its objective through integration of CSR within their systems as a major regulatory factor.

The concepts of CSR demand socially sensitive regulations that hardly hinder projects meant to favor the well-being of the society. The efforts to provide striking products to customers with elegant services are major objectives of most organizations.

Nissan Motors; nonetheless, this does not compromise its goodwill for the society. Instead, the aspect has increased the humanitarian support to ensure that the company grows together with the society (Dahlsrud 2008). As a strategy, most organizations have focused on the humanitarian aids, educational support, and the environmental fortification.

For instance, as a policy of the company, Starbucks Company liaises with humanitarian organizations in order to reach varied masses globally. Its contributions to the society on charitable grounds are remarkable.

Additionally, the company emphasizes on the education of the current children for a sustainable future development (PROBST 2010). It is a business law to integrate such CSR principals within the business models in order to achieve full impact (Banerjee 2007).

CSR fronts numerous benefits to an organization that have established and ratified its principles. This is crucial in earning the public trust on operational and business grounds. One advantage of CSR in governance is the ability to develop competitive advantages over other contenders following its impacts on the society (IISD 2011).

CSR manages to enact social, ethical, economic, and environmental values in the organization. It is crucial to agree that CSR is no longer a mere provision in most organization but rather a necessity for sustainable development within the organization (Mullerat & Brennan 2010, P. 317).

Evidently, organizations have set their core CSR areas to help them realize its mandates to the public. It is crucial to agree that CSR contributes immensely to the corporate strategies and governance since it reshapes concerned organizations in the realms of their operations and service to the people.

Most organizations have incorporated the CSR principles as any other policies within their business models. This effort benefits the company in achieving its corporate objectives with limited hindrances. Organizations have varied economic, societal, and environmental strategies depending on their mission and passion for the society.

It is crucial to recognize individual/corporate strategies in order to design appropriate CSR objectives. Nonetheless, CSR has numerous benefits to both the concerned organization and society, which it serves. While considering the social objectives of CSR, the involved corporate will observe the issues relating to education, public services, rejuvenation, and workers volunteering.

Precisely, the concerned organization will observe the social aspects of the public upon ratifying the CSR principles. This provision is evident in Pepsi company following its passion to give back to the public (Egan & Mather 2005). The significance of CSR in this context is its ability to mould the company’s operations to observe the ethical and social aspects in its service delivery.

Eventually, most organizations incorporate CSR principles in their endeavors as mentioned earlier. The economic contributions of CSR relates to the issues of jobs, business principles, and product value (IISD 2011). Organization that observes CSR in this aspect will ensure that their products have the recommended value commensurate to their prices.

Contextually, General Electric Company (based in the U.S.) has observed the issues of the product value earning it a massive competitive advantage. Thus, CSR will force the concerned organization to enact business processes with positive influence on the society as indicated before (Beurden & Go¨ssling, 2008).

CSR is a self-regulating phenomenon whose benefits forces any given company to consider the concerns of its surrounding. Any responsible organization will embrace the aspects of CSR voluntarily since its benefits are bountiful. Attaining a positive public perception is a remarkable achievement for any organization aiming to expand its market territories.

As a strategy, most organizations have put varied strategies to ensure that they enact viable CSR in their daily operation (Hillenbrand, Money & Ghobadian 2013). The company has a globalized fame emerging from its competitive automobiles and participation in numerous global social events and policymaking. It is crucial to consider and understand the concepts of CSR in the Nissan’s context.

This is achievable by dividing its participation into several units that have added to the achievement of its CSR goals independently (Egan & Mather 2005). Numerous corporations have realized substantial profits in their business upon the ratification of viable CSR policies within their business models.

This incorporated the enactment of policies that considered the public interest and the current global demands in the realms of environment protection and economic intensification for poverty suppression (Borchgrave 2001).

As a strategy, most organizations have developed numerous key CSR areas to help them achieve their strategic goals in the realms of business and service provision to the society. To conform to the demands of CSR, companies have developed a philosophy that establishes a safe coexistence amid the society and nature.

In their endeavours, they strive to attain a sustainable and mobile society with limited adverse effects to the environment. Evidently, CSR endures to protect the interest of the society.

Most organizations have observed this demands hence established self-regulating policies that ensure a viable and sustainable environment (Nissan 2011). Despite the companies’ desire to attain huge returns, they prioritize the issues relating to the environment. Companies have identified three principal areas to achieve this mandate (Jakobsson & Ramzan 2008).

Firstly, most institutions endure to reduce the emission of CO2 and CO gases through the production of environmental friendly commodities. The emergence of new technologies forces organizations to reinvent vehicles that hardly utilize fossil fuels known to pollute the environment upon combustion.

This occurs besides the efforts to produce motors that hardly emit the known dangerous gases to the environment (Nissan 2011). Additionally, the company mandates to provide automobiles that would help in protecting the air, soil, and water among other lucrative resources. This will help the current and future generation in attaining a sustainably environment for other coming generations.

Establishing, developing, and championing these environmentally responsive technologies are core in this context. It is through technologies that the organization realizes its CSR through appropriate business models (Fischer 2009). Lastly, Nissan recycles numerous resources to ensure an efficient but sparing use of the available resources. This ensures little or no wastage of resources.

Most organizations have achieved their global might and business prevalence by fostering the individuality that exists amid employees and the society at large. Realizing the benefits of workforce diversity, and its impacts to the society are critical. Besides harnessing individual potentials, employees feel ethically valued hence ready to work and propel the company further (EC-COUNCIL PRESS 2011).

The diversity within the Nissan’s workforce fraternity is its driving force meant to achieve its client’s demands and attain a sustainable growth. As demanded by its CSR policies, the company has respect for diversity, creates a learning culture, embraces internal communication, and builds ambient workplaces (GEVA 2008).

These achievements have met the international standardization requirements regarding the establishment and ratification of CSR (Grünewälder, 2008).

As another strategy, numerous organizations dedicate their economic achievements to the society through ample impacts of CSR. The sustainable and profitable expansion of the company indicates economic sensitivity to the society. Nissan’s conformity to the international legal requirements, ethical issues within the industry, and environmental concerns form the substantial aspects in the realms of embracing CSR.

This provision contributes to the company’s CSR achievement. Nissan trusts the concerns of the public and endeavors in its capacity to ensure that the public attains their ethical rights for a sustainable development (Hunter & Piltzecker 2003). Recognizing the significance of every stakeholder in the operational context is a crucial phenomenon in most companies.

Thus, the company strives to attain beneficial management practices as it endures to conform to the demands of the CSR and dynamic world markets. It is evident that the integration of the CSR principles into the company operation enhances the aspects of compliance demanded. Precisely, CSR endures to manage the viable business processes in order to inflict a remarkable impact on society (Fifka 2013).

Conclusion

CSR is a critical provision in most organization meant to enact self-regulating policies. Most organizations strive to comply with the lawful, societal, ethical, fiscal, and environmental concerns in order to achieve their business objectives. CSR is voluntary requirement with its principles helping in conforming to the mentioned provisions with limited hindrance.

Contextually, most organizations have enacted CSR in numerous aspects ranging from their environmental concerns to the philanthropic passions. Organizations that chose to work with local communities employ different strategies.

The aspects of the society, environmental safety, quality, goodwill, internal governance, and promoting CSR through the value chain similarly demonstrate the concepts of CSR at the organizational level. CSR has numerous benefits, and it contributes immensely to the corporate success.

List of References

Banerjee, S2007, Corporate social responsibility: The good, the bad and the ugly, Edward Elgar, Cheltenham, UK.

Beurden, P. & Go¨ssling, T 2008, ‘The Worth of Values – A Literature Review on the Relation between Corporate Social and Financial Performance’, Journal of Business Ethics, vol. 82, is. 1, pp. 407–424.

Bidgoli, H 2006, Handbook of Information Security Volume 3, John Wiley & Sons, Hoboken.

Borchgrave, A 2001, Cyber threats and information security: meeting the 21st century challenge, CSIS Press, Washington, D.C.

Calabrese, T 2004, Information security intelligence: cryptographic principles and applications, Delmar Learning, Clifton Park, NY.

Dahlsrud, A 2008, ‘How corporate social responsibility is defined: an analysis of 37 definitions. Corp. Soc. Responsib. Environ. Mgmt, vol. 15, no. 1, pp. 1–13.

Egan, M & Mather, T 2005, The executive guide to information security: threats, challenges and solutions, Addison-Wesley, Indianapolis.

ETATS-UNIS 2007, Department of defense sponsored information security research: new methods for protecting against cyber threats, Wiley publishing, Indianapolis (Ind.).

Fifka, M 2013, ‘Corporate Responsibility Reporting and its Determinants in Comparative Perspective’, Review of the Empirical Literature and a Meta-analysis Journal, vol. 22, no. 1, pp. 1–35.

Fischer, A 2009, Creating a national framework for cybersecurity: an analysis of issues and options, Nova Science Publishers, New York.

GEVA, A 2008, ‘Three Models of Corporate Social Responsibility: Interrelationships between Theory, Research, and Practice’, Business and Society Review, vo. 113, no. 1, pp. 1–41.

Grünewälder, A 2008, Corporate social responsibility: Implementation in German companies, GRIN Verlag GmbHm, München.

Hillenbrand, C., Money, K & Ghobadian, A 2013, ‘Unpacking the Mechanism by which Corporate Responsibility Impacts Stakeholder Relationships’, British Journal of Management, vol. 24, no. 1, pp. 127–146.

Hunter, E & Piltzecker, T 2003, MCSE exam 70-296 planning, implementing and maintaining a Windows Server 2003 environment for an MCSE certified on Windows 2000: study guide & DVD training system, Syngress Pub, Rockland, MA.

IISD (International Institute for Sustainable Development) 2011, Corporate social responsibility (CSR). Web.

Jakobsson, M & Ramzan, Z 2008, Crimeware: understanding new attacks and defenses, Addison-Wesley, Upper Saddle River, NJ.

Mullerat, R & Brennan, D 2010, Corporate social responsibility: the corporate governance of The 21st century, Kluwer Law International, Alphen.

Nissan 2011, Nissan’s Approach to CSR. Web.

Schwartz, M 2011, Corporate social responsibility: An ethical approach, Broadview Press, Peterborough.

Stoian, C & Zaharia, R 2012, ‘CSR development in post-communist economies: employees’ expectations regarding corporate socially responsible behaviour – the case of Romania’, Business Ethics: A European Review, vol. 21, no. 1, pp. 380–401.

Executive Summary

In a region that is known for political instability and religious wars the United Arab Emirates (UAE) Federation is well known for its economic and political stability. This is a rare phenomenon in the Middle East.

The absence of political instability, visionary leadership along with other features has promoted UAE to be among the worlds most important business destinations.

Great multinational corporations have established their presence in UAE due to good business environment prevailing in the federation. Furthermore, big corporations such as shell, BP and many oil exploration companies have found themselves in UAE due to rich oil deposits available for exploits.

UAE is not only favorable for oil firms. Companies such as Intel, DHL have also registered there presence because of favorable economic viability. With numerous local and international firms working closely in the rapidly expanding economy, corporate social responsibility (CSR) becomes a major concern to such corporations.

Of greater significance are the CSR present and future roles within the local business setting. The paper discusses the UAE business performances in key areas of CSR that include community affairs, environment as well as consumer protection.

Each of the industry sectors performance in these key areas varies just as the performance of each major CSR areas varies. The role of Islam in the CSR progresses in countries such as UAE materializes to be of great essence.

Many enterprises appreciate the contribution of CSR to their growth and to the general development of the society. However, majority of these enterprises are not cognizant with the requirements of the CSR and how it can be integrated in their business goals.

Introduction

Despite many years that corporate social responsibility concept has been studied various definitions have been proposed though the universal definition is lacking. Nevertheless many scholars have come up with some ways in which they can define CSR.

To these scholars corporate social responsibility (CSR) refers to the continuing commitment by an organization to act ethically and contribute to economic growth while simultaneously enhancing the quality of life of the employees, their families, the local community, and the society at large.

Models of CSR suggest that businesses should take on philanthropic responsibilities, economic responsibilities, legal responsibilities and ethical responsibilities.

CSR function deals entirely with environmental issues, economic issues including marketplace as well as social issues such as the society and the government. The organizations’ argument for social responsibility is leveraged by several factors namely changing public expectations, public image, business resources and avoidance of regulations.

CSR is the economic, ethical, legal and flexible expectation that the society has of business at a particular time. It reflects the efforts of organizations in managing operations to spawn overall positive effects on the society. Companies are currently succeeding in global market competition.

To excel in a competitive market companies must increase profitability and service orientation towards stakeholders including employees, customers, suppliers, governments, communities and groups of interest.

Despite the need to invest more in time and capital to implement CSR activities, companies have realized CSR importance in shaping companies image and differentiating them from other competitors.

This paper evaluates the concept of corporate social responsibility in relation to its adoption in UAE in an effort to establish its importance and contribution to corporate strategy. The paper begins by evaluating the conceptual framework of CSR and then proceeds to relate what this concept means to the UAE business environment.

Conceptual and theoretical framework of CSR

The foundation of CSR of a business organization is on five basic elements. These elements include value creation, innovation, community sense, long-term consideration as well as opening and sensitiveness to policy makers.

Innovation means the constant introduction of new products in the marketplace to service consumers to create a competitive advantage. Community sense implies the liability an organization has to the community in regard to respect, requirements and provision of some products in terms of social, economic and education.

Value creation as an element of CSR is very important in all business considerations as it builds up trust merit in marketplace and thinks about the most important stakeholders to a business like investors, customers and employees (Karnani, 2010).

In this perspective it is imperative for an organization to create value through its operations. Indeed companies are working more for service motive rather than profit motive in an effort to enhance their competitive advantage.

All businesses have to operate under corporate governance or the set of rules and procedures that protects them from adverse market issues such as frauds. Therefore, businesses and organizations should abide by the policies set by the regulating bodies such as the government alongside other recognized governing bodies.

Moreover, businesses are widely recognized as long-term processes that should be sustained by considering the needs and expectations of all groups of interest (Katsioloudes & Brodtkorb, 2011).

Broader meaning of corporate social responsibility (CSR)

Some scholars argue that corporate social responsibility can be defined as the commitment of businesses to pursue those strategies, decisions and actions which relates to the goals and values of the society.

To some scholars, social responsibility refers to the commitment of a business or an organization beyond that which is ideally required by economics or law with respect to pursuing the long-term objectives that are favorable to the society.

Generally, the different definitions refer to ethical, behavior, the environment, sustainable development and the philanthropic ideas (Katsioloudes & Brodtkorb, 2011). CSR reflects the importance of businesses to commit and equally satisfy the expectations and moral responsibilities at the societal level.

In other words the organization and businesses must have the right conduct of accounts for the welfare of the entire local society.

Corporate social responsibility has a critical role to play in enhancing the reputation and brand image of an organization. It assists in improving sales as well as customer loyalty both locally as well as at the international levels (Karnani, 2010). It is also an important instrument used to attract and retain workers.

The CSR is purposeful devised and used to provide all business organizations with a higher capability to create sustainable development and is indeed associated with such facets of sustainability. As a result many organizations have been attracted to CSR because of its contribution to increased sustainability devoid of creating negative consequences.

Economic responsibility

The very formation of a company is based on the economic value, the effort to provide quality products and services to each and every member of the society. The profit motivation drives the incentive for entrepreneurship.

During their conceptions business and organizations entities are looked upon as the fundamental economic units in the society. Therefore, the key obligation is provide and equally distribute products that members of the society needs and desire besides making satisfactory profits out of the production and distribution processes.

As the business grows it comes a time when the idea of getting profits shifts to that of maximizing every returns or profits (Karnani, 2010). In fact, this now becomes the permanent value onwards for most organizations. All other obligations are influenced by the economic responsibilities of the organization as they become contentious considerations without them.

Legal responsibility

The major purpose of any business is to serve the society and therefore UAE organizations are not merely expected to focus on profit making. All together they are expected to abide by the stipulated laws and regulations that have been enacted by the government as the fundamental rules upon which the business must run.

To partially fulfill the social contract between the firms and the society most of the existing organizations are required to pursue their corporate strategies within the needs of the legal framework. Legal responsibilities ensure that the organizations have codified ethics which enthusiastically combine with economic responsibility to form the basis of free enterprise system (Karnani, 2010).

Ethical responsibility

Despite the fact that the UAE legal and economic obligations have an ethical base regarding justice and fair practice, ethical obligations involve those activities that are restricted by the societal members although they are not included in the governing law or rules and regulations.

These responsibilities frame those norms, principles in addition to the expectations that demonstrate concern for what stakeholders deem as fair justice in maintaining the ensuing respect and similarly protect their moral rights. Into the bargain ethical obligations can be perceived as the emerging societal values and norms a firm is expected to meet yet they may not demonstrate a higher level of performance than that demanded by the law.

Philanthropic responsibility

Philanthropic obligations include those business actions that respond to the expectations of the society and clearly demonstrates and ensures that organizations being good corporate citizens.

This means that UAE organizations are actively engaged in various programs and activities with sole aim of enhancing peoples’ goodwill and promote the welfare (Katsioloudes & Brodtkorb, 2011).

These may include firms’ contribution of finances and executive time for the sake of the community-based programs. As a result the philanthropic responsibility is somewhat discretionary on the firms’ part though the society expects the organizations to provide it.

The corporate social responsibility of an organization within the Unite Arabs Emirates thus involves the fulfillment of the organization’s economic, legal, ethical, and philanthropic obligations. Any responsible organization should and is obligated to make every effort of maximizing the accruing profits while obeying the law, acting ethically and becoming good corporate citizens.

Importance of corporate social responsibility in UAE

Corporate social responsibility is among the essential instruments with the most important role in governing any business irrespective of size. The more the organization fulfils social obligations the greater the chances to survive in a global and domestically challenging market environment.

For instance, to prosper in the current competitive environment every business should reward the public (Mesbah, 2011). Even though businesses and the society are inter-linked as well as inter-dependent, their contribution to CSR will reflect their goodwill.

In essence, corporate social responsibility widely endowed in the United Arabs Emirates tends to reduce the negative effects which might accrue to the stakeholders and creates wealth and value for them.

Businesses situated within the UAE have their own capabilities to choose their employees, customers, investors and other stakeholders so that they are always given the deemed necessary priorities. The locality, size and nature of operations of such organizations and businesses often define the stakeholders’ existence.

Their expectation is recognized when the business presents some effects on them in any manner. At this point an important tactic to apply in UAE environs is stakeholder mapping or the representation of the different relationship that the business has with the stakeholders according to their strength and relative proximity.

In spite of the approaches broadly used in UAE it is imperative to include all relationships where the organization and the society influence each other.

The organization may contemplate stakeholder involvement in order to understand its impacts and assist in articulating its mission, strategy, values, commitment and executions. Basically this in turn facilitates the process of regulatory approvals to take part in measurements and reporting to enhance the existing relationships.

The corporate social responsibility in the UAE context

Environment

A research that has been done in the UAE companies shows that there is compliance with the UAE environmental regulatory measures (Katsioloudes & Brodtkorb, 2011). The compliance with these laws remains the same across the industrial sectors.

Ideally this implies that UAE industries are fully aware of the role CSR play to the surrounding environment. Several environmental laws as well as regulations were enacted by the UAE government to oversee the corporate behavior concerning the protection of the environment.

The UAE federal government developed regulations that oversee the environmental impact assessment for new projects by major corporations. In return many corporations have shown their responsibility by conducting the requisite environmental impact assessment before they undertake any major project.

However, there is a wide variation according to UAE industrial sector. Trade, hotel and restaurant industries which are also regarded as the largest in UAE record seem to have insignificant rates of environmental assessment.

This may be due to lack of tolerance and awareness of the local as well as international standards of environmental controls. Therefore, new environmental concepts such as eco-tourism alongside the renowned eco-hotels should be promoted and adopted by these industrial players as part of there CSR (Katsioloudes & Brodtkorb, 2011).

This is the process purposely meant to improve the business or organizations CSR and consequently their performances within UAE.

Another way in which many companies in the UAE respond to the environmental responsibility is through internal sanction especially the medium sized companies.

The main reason being that the environmental impact assessment in most cases encompasses more advanced ecological management schemes whereby environmental guidelines and commitment play an integral role (Katsioloudes & Brodtkorb, 2011).

But this could require a more detailed examination into the level and scope in which these internal sanctions are implemented.

Another important aspect in the UAE environment is the impact assessment executed to the business suppliers. Basically scores of companies situated in the UAE are obliged to report any environmental impact assessment to their suppliers.

Though the pattern is uniform across the industries it is important to look into what these companies consider when conducting the assessment in the supply chain. It also important to note that, UAE has no strong regulatory framework that would provide proper enforcement in conducting fair assessment to the suppliers.

Against this backdrop of fragile regulatory framework many companies have developed templates that are essential in monitoring the environmental impact assessment to the suppliers (Katsioloudes & Brodtkorb, 2011).

In general, majority of the firms in the UAE have shown a strong commitment and compliance with both international and local environmental laws.

Nevertheless not all the firms have implemented the environmental impact assessment either to the new projects or to their supply chain or even put in place the internal procedures that avoid actions which are duly deemed destructive to the environment (Katsioloudes & Brodtkorb, 2011).

Therefore it is necessary that firms put more emphasis on issues of environmental while considering their engagement in the CSR. Companies corporate social responsibility activities should be geared towards environmental protection as well as initiatives that go beyond the rules and regulations that have been put.

Community affairs

Basically, several companies in the UAE engage in projects that promote goodwill activities to the surrounding communities. Corporate goodwill is totally distinct from Zakat (also known as Muslim charity) which is very common in the Middle East. Corporate goodwill is driven by the broader concept of corporate responsibility and citizenship (Katsioloudes & Brodtkorb, 2011).

The extent of the companies involvement in the development of the communities in which they operate is essentially a motive worth noting. For example, various companies have clear policies that are embedded on their goals and strategies on how the resources would be spent towards this endeavor.

Companies that have integrated and aligned social goals in their strategies have shown sustainable improvement in their performance.

This remains to be a clear indication that UAE companies should make more efficient their CSR processes and investments within the business strategies. In a situation where the alignment is not attained the corporate can achieve the realignment through a viable strategy dubbed as the multi-stakeholders approach.

United Arabs Emirates firms are also socially sensitive to the community development and needs through engagement in goodwill activities. Some firms are allocating their resources towards the community goals that are generally beneficial both to the public along with the businesses.

Many of these companies have come to the realization that the nature and degree of involvement in the community development is helpful in streamlining as well as directing their social initiatives (Katsioloudes & Brodtkorb, 2011). In contrast there is little realignment that currently exists between the companies’ business objectives and the community social giving.

Consumer protection

It is a requirement in the UAE that the companies conduct tests and trials that are newly launched into the market for safety and security purposes especially for those companies that are found within the manufacturing sector.

Companies in the manufacturing segment are highly expected to adopt the best practices while launching their new products both in the domestic and international markets. All the same, the UAE government would not assume that corporations will act responsibly.

There are regulatory and market requirements that are clearly put in place in the manufacturing sector to ensure high degree of safety and security tests. The regulatory measures furthermore conduct post-market surveillance for new commodities and services sold to the consumers (Katsioloudes & Brodtkorb, 2011).

Like many companies around the world, the UAE companies use consumer complaints to improve their business processes. As a key performance indicator customer complaints are in most cases taken as an important tool that arise from the stakeholder’s engagement process.

This is the process purposely meant to improve the business or organizations CSR and consequently their performances. Companies that are focusing on the constant improvement are obliged to fundamentally use other important stakeholder’s engagement tools such as the employee opinion surveys (Katsioloudes & Brodtkorb, 2011).

On the other hand stakeholder engagement tools have however been underutilized by many companies in the UAE and therefore there is the need to highlight the benefits businesses gain from using such tools. For instance such tools in most instances have been essential in promoting relevant stakeholders view by providing the CSR related key performances (Katsioloudes & Brodtkorb, 2011)

Interestingly many corporations in the UAE still use consumer complaints as the main performance indicator that is essential in their daily improvement for the business processes.

In addition loads of firms conduct tests along with trials of new products and services before they are launched into the market for safety and security purposes. In fact those firms that engage in the manufacturing sector materialize to be the best performers.

The challenges

One of the greatest challenge facing UAE as well as the firms that operate within the country is how to come up with a well defined CSR policies that articulate international practices whilst reflecting the particular customs of the country.

The best way firms can demonstrate the significance of CSR best practices according to UAE context is to prove that the business undertakings are consistent with and equally corresponding to the principles and shared teachings of the Islamic religion (Katsioloudes & Brodtkorb, 2011).

How these policies would be turned into actual performance can be fast tracked through education and constant training to all workers including the companies’ chief executive officers (CEOs).

Besides there is the need for the government to tender support not only to encourage firms to adopt the best CSR practices but also to efficiently and accurately implement accompanying CSR policies.

Conclusion and the way forward

With numerous local and international firms working closely in the rapidly expanding economy CSR becomes a major concern to such corporations. Each of the industry sectors performance in these key areas varies just as the performance of each major CSR areas varies.

Many enterprises appreciate the contribution of CSR to their growth and to the general development of the society. However, majority of these enterprises are not cognizant with the requirements of the CSR and how it can be integrated in their business goals.

It is true that many firms in the UAE are fully aware and adopt the CSR concept in their policies and practices. According to researches that have been done over ninety percent of the UAE companies both foreign and local are strongly committed to the CSR concept.

There is also an indication that there is a strong correlation between CSR practices and the companies’ performance. In deed the major drivers of the CSR are majorly the impact CSR has on the performance of the company as well as the fulfillment of the laid down rules and regulations.

Putting all these facts together the conclusion that can be drawn is that there is indirect yet strong responsiveness of CSR in the UAE. This is greatly supported by the responsiveness of the UAE firms towards the environment, consumers and the community or societal affairs.

All these responses are also supported by the strong belief in Islamic culture of giving. Islamic influences not only make such corporate responsibilities an integral part of citizens but also a necessity to the success of the businesses.

Despite such awareness it is vivid that UAE companies still lack clear understanding of the CSR concept as it promulgates in other countries such as in Europe and America. Firms in UAE have no well defined CSR policies and practices except in cases where they are required to comply with the laid down regulations.

It seems as though UAE firms lack expertise in the CSR that would be able to formulate CSR policies and practices according to the international standards. Without a doubt majority of the firms appreciate the importance of CSR but they rarely understand CSR policies and practices and how these policies should be put into operation.

Overall there are several benefits associated with CSR best practices especially to the Islamic countries like UAE. Adoption of CSR will not only make possible for UAE firms to emerge in the international scene but would also improve their profits and relations with score of other the international corporations.

The greater impact is that many foreign companies would be attracted to the country. Therefore if countries such as the UAE properly adopt and successfully implement CSR policies then there are higher chances of their businesses developing.

References

Karnani, A. (2010). The Case against Corporate Social Responsibility. Web.

Katsioloudes, M. I. & Brodtkorb, T. (2007). Corporate social responsibility: an exploratory study in the United Arab Emirates. Web.

Katzman, K. (2011). The United Arab Emirates: Issues For US Policy – Analysis. Web.

Mesbah, R. (2011). Arabia CSR Network, Embassy of Sweden and Swedish Trade Council work towards corporate responsibility in UAE. Web.

Introduction

For the last few decades, corporate social responsibility has received much attention with many organizations accepting and adopting its strategies. Many companies have acknowledged the benefits associated with the strategy. However, the pressure to adopt corporate social responsibility is considered the second most challenging decision in business today.

Corporate social responsibility, CSR, is a kind of business self-normalization incorporated into a business form. CSR courses of action operate as an integral, self-normalizing system whereby venture keeps an eye on and makes certain that it has full of zip acquiescence with the spirit of the regulation, moral values, and worldwide standards.

The aim of corporate social responsibility is to hold accountability for the firm’s actions and egg on an affirmative result by way of its doings on the environment, end-users, members of staff, the public, stakeholders and all other affiliates of the public field (Rydahl, 2010, p. 1).

Corporate social responsibility is tailored to help a venture’s undertaking and also to serve as a lead to what the firm corresponds to and will present to its clients. Progress commerce moral codes is among the kinds of functional moral values that looks at right standards and proper or ethical difficulties that can crop up in a business set up.

Ways in which corporate social responsibility contributes to sustainable competitive advantage

Incorporating corporate social responsibility actions into business functions is vital for not a doing well execution of CSR actions but as well an advanced level of by and large organizational functioning. On the whole company functioning gets better since added expenses of bringing in creative corporate social responsibility aspects are lesser as compared to extra paybacks form the consequential advanced commodities or enhanced procedures.

There are quite a number of raisons d’être that make clear this gain. For example, companies executing corporate social responsibility more proper create a center of attention and keep hold of potential and at hand quality members of staff which increase on the whole operational effectiveness.

Taking on corporate social responsibility adds to market prospects that spawn extra proceeds. Administrative concentration to societal performance perks up the company’s associations with significant stakeholder assemblages which enhance the smooth operation of business processes.

Elevated echelons of societal performance are a sign of advanced administration techniques that can be confidently interpreted into company performance. These constructive sways form within and outside stakeholder factions lead to an augmentation in sales returns and also as a cutback in clear running expenses and inherent stakeholder administration expenses (O’Brien, 2001, p. 1).

For that reason, the connection between incorporation of corporate social responsibility actions into company activities and venture performance is projected as follows. First, the extent to which a company incorporates corporate social responsibility actions into business activities certainly relates to company performance.

Best Buy Inc. has to a great extent ventured into CSR activities and the expectations are that this will also reflect on its performance in the marketplace. It has turned out to be a very popular firm in the marketplace, demand for its commodities ever rising and attraction of the best of employees.

The level to which a company can incorporate corporate social responsibility actions is in actual fact reliant on, at an individual stage, administration discernments in relation to the execution of CSR actions and, at an organizational stage, the existing assets and governing apparatus to smooth the progress of such incorporation.

Creative initiatives rising up in markets can wipe out companies that hold fast to previous existing designs. Companies as a result attain cutthroat lead by way of bringing in up-to-the-minute thoughts to face up to previous accessible designs. Due to the fact that at hand assets that a company has are not stock-still, creations are vital to tell between its commodities from challengers to continue to exist and to uphold or augment productivity (O’Brien, 2001, p. 1).

Getting involved in creative corporate social responsibility actions is one of the loads of ways companies make use of to attain such demarcation. This is because the end users are possibly to buy commodities that integrate some publicly accountable qualities by way of commodity advancements at the same time as others appraise commodities that are generated by way of publicly responsible procedure creations all others factors kept constant.

Conclusion

The approaches to effectively enacting corporate social responsibility within any organization are to link strongly with business and tactic. To generate significance, corporate social responsibility exercises have to be completely entrenched within the company’s commodities or procedures.

Ventures in corporate social responsibility should not be treated as an open cost because the whole practice connects strongly with reputation. Reputation of a company is debatably one of the most precious positive features that are worth looking after (Smith, 2011, p. 1).

The same way as in all other kinds of assurance, buying insurance for a company’s reputation in corporate social responsibility is one of the crest main concerns. I therefore agree that businesses should reduce their profits in order to implement corporate social responsibility strategies because after all such implementations will result to the much needed profits due to maintenance of the businesses’ public figure which calls for more and more consumers.

Bibliography

O’Brien, D. (2001). Integrating corporate social responsibility with competitive strategy. PDF File. Web.

Rydahl, M. (2010). When the business of business become everybody’s business. Web.

Smith, K. (2011). Should your company practice social responsibility? Web.

Introduction

This article examines the Corporate Social Responsibility (CSR) of three companies based in the United Arab Emirates (UAE) with respect to the following areas, making charitable contributions; supporting art and museums, gardens, and public places; funding public health and education; and helping orphans, and physically and mentally challenged people.

Commercial Bank of Dubai

The Corporate Social Responsibility (CSR) framework of Commercial Bank of Dubai (CBD) is divided into the following sections – sustainability, governance and transparency; environment; employees; and society and culture (Commercial Bank of Dubai 1). The CSR of CBD can be further discussed as follows.

Making charitable contributions: This issue is covered in the ‘society and culture’ section of the bank’s CSR strategy. Under the program put in this section, the bank has listed the needy that the company was going to help, as one of its objectives (Commercial Bank of Dubai 1).

Supporting art and museums, gardens, and public places: This strategy is also fulfilled as a part of the program implemented in the ‘society and culture’ section of the bank whereby the company has set to perform the local UAE cultural activities. The bank also makes the public aware of the issues affecting the environment and has gone ahead to offer credit facilities to green projects (Commercial Bank of Dubai 1).

Funding public health and education: CBD aims at promoting education among the youth through sponsoring learning related students’ activities (Commercial Bank of Dubai 1).

Helping orphans, and physically and mentally challenged people: CBD addresses this issue due to ‘society and culture’ strategy, whereby the program involves philanthropy to help the needy as well (Commercial Bank of Dubai 1).

CBD is a signatory to the United Nations Global Compact (UNGC). This shows the commitment of the company to the issues concerning human rights, environment, labour and anti-corruption. The company has also been awarded a “CSR Label” in the year 2011. In Dubai, this award is granted in recognition of the companies, which exercise the corporate social responsibilities well (Commercial Bank of Dubai 1).

Ducab

Corporate Social Responsibility under Ducab is undertaken through three sections: philanthropy, environment and employee welfare (Ducab 1). Further discussion on how CSR is carried out in Ducab is explained below.

Charitable contributions. Ducab donates funds to various missions, both locally, in Dubai, and overseas. For instance, the company has continually donated building wires to Gaza (Ducab 1).

Supporting art and museums, gardens, and public places: Ducab is actively engaged in keeping public places clean. The company does this by engaging in cleaning campaigns organised by Dubai Municipality yearly – it has been doing this for more than 13 years now (Chaturvedy 9).

It is also a member of Emirates Environmental Group, the main objective of which is to keep the environment clean. The company is actively involved in environmental management and was the first in tne UAE to achieve the ISO 14001 certification (Ducab 1).

Funding public health and education: As a part of its philanthropy project, Ducab supports health campaign. For instance, the company is recorded to sponsor a newsletter by Rashid Paediatric Therapy Centres. This newsletter is informative in areas of paediatrics, especially on issues touching children who have special needs.

The company also organises blood donation campaigns for UAE’ Thelaessemia Free Campaign frequently. This action is also carried out at other healthcare organisations; for instance, in 2009 the company’s employees donated blood to Al Wasl Hospital. The Company also supports education – for instance, it supports students attending classes at the Emirates Science Club (Chaturvedy 9).

Helping orphans, and physically and mentally challenged people: Ducab has created an allowance to cater for the needs of such people. The help may be offered due to CSR’s philanthropic arm. For instance, it undertook the repair of the Dubai Club for Special Sports (a facility used by people with special needs) (Ducab 1).

DUBAL

DUBAL aggressively engages in CSR activities through community involvement (economic, social, environment and workplace), charitable donations and corporate sponsorship (sport sponsorship, award programs, career exhibitions, industry/trade events) (DUBAL 1). A more detailed discussion of how DUBAL undertakes its CSR is discussed below.

Making charitable contributions: Contributions to charitable activities are a part of DUBAL’s CSR. The company maintains school projects and also has created a mechanism through which its employees can make similar contributions (DUBAL 1).

Supporting art and museums, gardens, and public places: DUBAL has great concerns in preserving environment. The company is engaged in the program aimed at minimization of waste. DUBAL uses technology that poses the least environmental harm.

It also partners with organisations and groups which aim at cleaning the environment and public places. The Emirates Environmental Group, for example, is involved in creating environmental awareness in the UAE and also in cleaning beaches, among other activities. DUBAL is a member of this group and is engaged in its environmental actions (DUBAL 1).

Funding public health and education: The Company encourages its skilled employees to train the students and share knowledge and experience with them. It supports the ministry of education through various initiatives. One of such initiatives is the DUBAL Clubs of Excellence which was started with the aim of developing students’ skills on environmental protection (DUBAL 1).

Helping orphans, and physically and mentally challenged people: DUBAL offers assistance to distressed communities around the world, especially to those that suffered in the aftermath of natural calamities. The company also supports community-based organisations instituted to support “disempowered people (orphans, special needs individuals, the elderly and so on)” (DUBAL 1).

Conclusion

Commercial Bank of Dubai, Ducab and DUBAL are companies in the UAE that are actively involved in CSR matters. Their interest in CSR matters has benefited the community and environment.

Works Cited

Chaturvedy, Ashish. “Success Quotient”. Cable Talk, 2010. Web.

Commercial Bank of Dubai. “Corporate Social Responsibility”. Commercial Bank of Dubai, 2013. Web.

DUBAL. “Our Corporate Social Responsibility”. DUBAL, 2013. Web.

Ducab. “Corporate Social Responsibility”. Ducab, 2013. Web.

Introduction

The business world has become an environment where responsibility to the society competes with personal gain and morality. Often, corporations face an important decision that sets the course for honesty or deceit and unjust manipulation. It has been known for some time that business will often choose own gain over everything else, but only recently, it has received the needed attention.

The concept very much reflects the views and values of society and looks at the greater context of all corporate institutions and practices. Emirates and ADNOC review will look at specific details about the CSR, what role it plays in people’s lives and more specifically, in the matters of business and corporate worlds. The work is meant to refresh the knowledge people have about investments, participation of stakeholders and ethical or moral considerations that are involved in proper market environment.

The topic is rather informative in what is expected from the corporations and businesses and it sets apart those with a duty and moral obligation to morality, and those who search for other ways to gain resources. The society and morals are always fluctuating and so, it would be difficult to adjust to what is needed and demanded by the population.

An in-depth look is taken at the specific methods and mediums where social responsibility will be applied. Publicity is an important part of the process and thus, will have to deal with alignment to proper intentions and responsibility. The decisions that will be taken now have to be adjusted to the theoretical issues and perspectives revolving around environment, as the modern day policies are getting stricter and enforcement more organized.

Emirates

CSR was and is developing in Emirates but was also, previously known to be one of the ethical topics in the culture. The details consider the environment and how other corporations or organizations act in keeping the balance between the two. It is interesting that ethics and morality in business are becoming predominant.

Corporate social responsibility looks at everything from environmental pollution, to conditions that are made available for employees and the consumers. It is divided into three categories where one is related to the threat management, in relation to morality and norms. The second one is about the responsibility regarding morality. And third deals with the affected people, especially those who are indirectly influenced.

The recent changes have become a major goal of Emirates in establishing morally correct conditions for all parties involved. The present and future consideration is the condition of businesses towards ethics, in order to set the proper course of action. Emirates uses marketing techniques that must be aligned with reasonable behavior and outlook, so that the best qualities are supported and those that need improvement are fixed.

An important part of the process is to look at the strategy and how it can be implemented into the changes taking place. Primarily, the businesses were meant to provide to the society but in the process, maximization of profits became the most important goal which led to corners being cut and unethical behavior emergence.

Ethics and morality are a part of a code of Emirates that is not necessarily reflected in the law but in fair expectations of people and cooperating organizations. CSR has become a trend which resonates with the social ethics and morality in pursuing a strategy that is both effective for corporations and responsive to the business and natural environment.

The recent changes have become a major goal of the Emirates in establishing morally correct conditions for all parties involved. The present and future consideration is the condition of businesses towards ethics, in order to set the proper course of action. Marketing techniques must be aligned with reasonable behavior and outlook, so that the best qualities are supported and those that need improvement are fixed.

Further studies must be conducted in order to set up specific and widely accepted criteria that are easy to follow and are an international standard. The connection between stakeholders, corporations and market are tightened for a better management of resources and interests. The Emirates’ schemata identifies the bottom part as most basic, as economic responsibility leads to profits and this is from where all other aspects flow out.

The second division is to obey the law, third is ethical implications and responsibilities and fourth is the responsibility of being a part of society and bettering the world around. Also, the relationship with stakeholders becomes a valued and much needed asset because it is the bridge between private and public relations of businesses and corporations. The three types of moral, amoral and immoral must be analyzed to determine the major criteria of each one.

Immorality refers to actions that are unethical and go against rules and social values and beliefs. Amorality is a sort of indifference where businesses do not care about society but do not necessarily have damaging influence. And moral is the most desired and ethical way to conduct business and establish proper and beneficial cooperation with society (Emirates, 2013). Emirates has proven to be highly moral.

ADNOC

ADNOC looks rather sustainable, as it covers several layers of population. The manufacturing plays one of the key market roles in the global business industry. Since it has made use of many employees from different social walks, ADNOC’s success is obvious. It is not uncommon when a country of lower economic development produces goods for a nation that is well established and the economy is high, so this should be made the case with this company, which will allow taking business to even more countries.

Because the industry is particularly a developing field that has seen a great demand in the past decades, ADNOC has a lot of room to develop and innovate. It is understandable that the economics, market value and differences between products and services all play a role in who gets employment and what sort of company becomes the partner. When looking at economics, there are few things to have in mind, as ADNOC is directly related to different locals and economies.

The system of trade and relations between businesses are guided by culture and society. Some places have better economies, so in order to stay successful, ADNOC must adjust to the locality and people’s economical conditions. The market is also different. There are certain things that people need, so the demand on the market is special for every country.

Globalization has majorly impacted the company and the differences can be seen as well. Some are becoming over developed with abundant supply and thus, competition is one of the major determinants of direction. Familiarization with other companies will allow for the adjustment of own production. One of the keys for business development is making sure that the demand is high. Both employees and the population must be upheld to the highest standards.

The intertwined relationship between the suppliers in a country, the working conditions and the superpowers or other well developed regions of the world show that the mutual dependence of the company’s internal structure and business environment determines success. ADNOC is aware that sometimes the pressures for local responsiveness are low, and taking the business to other regions will guarantee stable income and product or service flow.

It is obvious that with such global organization, countries that are more developed will continue receiving their products, as the need is always present, while the conditions oversees might be very poor. It is important to consider the reality of economies and conditions in the country and adjust to the society.

ADNOC is an organization that has unique features, as it gives an opportunity to do something special, which no one has done before. An aggressive approach makes the company stand out in a market filled with ideas. An important part of the process is to look at the strategy and how it can be implemented into the changes taking place. Some of the problems in implementation are analyzed as well. Because it is such a significant part of the matter, there is no specific plan of action that is concrete and clearly outlined.

ADNOC also takes great care of the surrounding natural and social environment (ADNOC, 2011). Attention to details and industrial influences are always kept in mind, making the organization very moral and ethical. The mutual cooperation between management and employees is instrumental to the established success.

References

ADNOC. (2011). Web.

Emirates. (2013). Web.

Abstract

Corporate social responsibility (CSR) is a growing corporate practice in most countries. Multinational corporations (MNCs) are championing its adoption. This paper shows that many companies can benefit from CSR by realising multiple bottom-line successes and an improved quality of human capital.

Companies that embrace CSR enjoy these benefits within the confines of four theories – corporate citizenship, stakeholder interest theory, moral minimum theory, and the profit maximisation theory.

Evidences from the United Arab Emirates (UAE) show that the multifaceted nature of the corporate citizenship theory makes it the most appropriate theory for guiding CSR practices today.

Introduction

CSR is a corporate self-regulation mechanism that ensures businesses abide by the law, uphold ethical values, and subscribe to international standards of operations. Schwartz (2011) says CSR emerged from the idea that “a corporation not only has economic and legal obligations, but also immense responsibilities to the society” (p. 18).

Through this statement, Schwartz (2011) believes CSR articulates the effort by decision-makers to make corporate decisions that not only benefit their organisations, but the society as well. An assessment of this background shows that CSR is a continued commitment by businesses to be ethical when undertaking their economic activities.

The gist of this argument therefore premises on the continued improvement of the quality of life for employees and the society, in general. This paper investigates the theories underlying CSR practices and the arguments that support and undermine the practice.

To have a practical understanding of CSR, this paper also analyses the adoption of CSR practices in five UAE firms. Overall, this paper shows that most UAE companies subscribe to the corporate citizenship theory.

CSR Theories

Stakeholder Interest Theory

The stakeholder interest theory advocates for the prioritization of stakeholder interests before any other interest in an organisation. McAleer (2003) believes this view is a straightforward approach for directing corporate affairs. Within this framework of analysis, any investment made by a company ensures it maximises stakeholder value.

This theory also suggests the elimination of social costs if they have a huge impact on a company. As outlined by Garriga & Mele (2004), the concept of maximising stakeholder value aims to distinguish social objectives from economic objectives. Illustratively, Garriga & Mele (2004) say if a company invests in the welfare of a community; it should enjoy improved human capital because CSR attracts quality employees.

This way, the company would also reduce its wage bill and minimise the possibility of employee fraud, or a high human capital turnover. This position advocates for a differentiation of social objectives from economic objectives.

This position also underscores the importance of using shareholder value maximisation as the main framework for guiding all corporate affairs. The agency theory surfaces as the most applicable theory for articulating this concept (Eisenhardt, 1989).

Milton Friedman (cited in Eisenhardt, 1989) introduced the agency theory by saying the sole responsibility of a business is to maximise profits. His view emerged from the premise that most shareholders contract businesses to maximise profits on their behalf.

Therefore, the main responsibility of a business is to conduct its operations, according to the wishes of its owners (shareholders). An agency contract defines the relationship between the two parties (hence the agency theory). This contract emphasises profit maximisation, as the core basis of business activities (the regard for societal welfare is secondary to this purpose) (McAleer, 2003).

Although many organisations strive to maximise their shareholder values, critics say this framework is highly selfish and creates room for companies to engage in unethical business conduct (Eisenhardt, 1989). Consequently, researchers have proposed an alternative framework for maximising shareholder value because they say it is possible to maximise shareholder value and still cater for societal needs (McAleer, 2003).

This proposal centres on appreciating the importance of a long-term framework for conducting organisational activities. Researchers, such as Jensen (cited in Garriga & Mele, 2004), have championed this proposal because they recognise the need for stakeholder tradeoffs, as a framework for decision-making.

Moral Minimum Theory

Researchers such as Schwartz (2011) have greatly explored the concept of moral minimum by saying companies can implement their CSR objectives by “not harming” the society. This concept stems from the philosophy that regardless of how people minimise their CSR responsibilities, they cannot ignore the negative consequences of their activities.

Thus, companies may use several explanations to explain why they cannot participate in CSR; however, few companies can justify causing harm to others. Indeed, companies may have competing obligations that cause harm to the society, but none of these obligations could justify societal harm.

As he explained the moral minimum theory, Schwartz (2011) clarified that he did not support companies that pursued the concept of moral minimum. However, he emphasised the need to appreciate the fact that different companies cannot demonstrate the same commitment to CSR (Schwartz, 2011).

Profit Maximisation Theory

The theory of profit maximisation closely associates with the stakeholder interest theory. This comparison arises from the assumption that many stakeholders are interested in making profits, as their primary goal of engaging in business. However, to differentiate both theories, it is crucial to mention that not all stakeholders engage in businesses to make profits.

Therefore, while the above section of this report outlines that most businesses would first cater to stakeholder interests, it is crucial to acknowledge that such interests may not necessarily be profit maximisation. Nonetheless, the concept of profit maximisation lies deep within the roles and responsibilities of businesses.

Through such an analysis, the agency theory comes into focus again because it outlines that business processes that do not strive to maximise company profits are inefficient and unnecessary (McAleer, 2003). This analysis emphasises the need to understand the relationship between CSR and profit maximisation.

Researchers who explored the above relationship posted mixed results. However, most of them affirm that the two variables (CSR and profit maximisation) share a positive relationship (Huniche & Pedersen, 2006). Others believe the two variables do not share any discernible relationship at all (Huniche & Pedersen, 2006).

The challenge with understanding the relationship between CSR and profit maximisation is the lack of causality between the two. Moreover, the concept of CSR is often abstract. It is therefore difficult to establish how CSR leads to profit maximisation. Indeed, as Schwartz (2011) says, although CSR may improve a company’s image and sales record, it is still difficult to establish causality between the two.

Overall, it is crucial to acknowledge that the concept of profit maximisation in CSR dictates that most companies should first meet their profit objectives before they meet their CSR objectives.

Sometimes, these objectives (social welfare and profit maximisation) clash and companies have to decide which option to choose. Decision-makers who choose the profit maximisation theory would meet economic objectives first and pursue social objectives later.

Corporate Citizenship Theory

Some researchers use the term corporate citizenship interchangeably with CSR. They believe when companies are socially responsible, they become corporate citizens (Huniche & Pedersen, 2006). This understanding is true because people may use the two concepts interchangeably to mean the same thing.

However, CSR denotes the process, which companies engage in ethical and environmental sustainability, while corporate citizenship underlies the entire concept of CSR. Therefore, companies that undertake CSR are good corporate citizens. Globally, many companies have earned the reputation of being good corporate citizens.

For example, Microsoft is a good corporate citizen because it has demonstrated the commitment to serve the needs of different people and communities around the world. As the demand for social responsibility increases in the corporate space, companies and people are starting to use their powers to punish errand companies that do not subscribe to this philosophy (corporate citizenship).

Huniche & Pedersen, (2006) add that most companies that still do not subscribe to this philosophy have not only suffered negative press, but also experienced boycotts of their company products. This understanding shows how good corporate citizenship is an ingrained component of today’s corporate practices.

Most Appropriate Theory

Corporate citizenship is the most appropriate theory for CSR. The easy alignment between corporate citizenship and globalisation explains this fact. Certainly, it is important to understand this issue from a broader perspective of globalisation because globalisation informs today’s ethical standards.

The growing number of multinationals in today’s business space, and the resultant pressure on such organisations to embrace ethical practices also underscores the importance of understanding corporate citizenship from a global perspective.

Although globalisation may benefit different economies, it is a two-edged sword, in the sense that it can provide immense economic benefits (stimulate economic, social and environmental growth) and still make it difficult for governments to regulate business practices.

Huniche & Pedersen, (2006) believe the situation is worse for developing economies because their governments could easily forego ethical considerations for economic benefits. This eventuality is highly likely because people know multinational companies for their skills in exploiting regulatory gaps.

Corporate citizenship helps to mitigate the above concern because it provides an opportunity for companies to self-regulate, when governments cannot regulate them. Huniche & Pedersen (2006) say corporate citizenship can achieve this outcome by “adopting social and environmental management systems, labelling schemes and reporting data” (p. 10).

The suitability of corporate citizenship in today’s business world emerges through its acceptability in today’s corporate circles. Scholars and academicians also approve the theory through the publication of numerous literatures that highlight the successes and suitability of corporate citizenship (Garriga & Mele, 2004).

This approval has seen a surge in the number of companies that have formulated ethical codes of conduct to guide their corporate activities. For example, most companies today publish environmental reports to account for the environmental impact of their activities. Many companies also choose to undertake environmental impact assessments before they embark or approve any project.

Companies also appreciate their role of being good corporate citizens by including communities as important organisational stakeholders. Huniche & Pedersen (2006) also acknowledge the advancements of non-governmental organisations, private institutions, and government institutions in developing new ethical criteria for guiding organisational activities.

Arguments for CSR

Triple Bottom-Line Success

As observed in the above sections of this paper, CSR involves undertaking corporate responsibilities in a responsible way. Proponents of CSR argue that CSR gives economic longevity to companies because it provides a long-term perspective of how they make profits. They also argue that the failure to practice CSR may amount to short-term profits and long-term losses (Garriga & Mele, 2004).

This argument outlines the role of CSR in helping companies to achieve triple bottom-line success. The triple bottom-line success hinges on three pillars – people, planet, and profit (Spence & Painter-Morland, 2010). The “people” concept refers to labourers and community stakeholders. Stated differently, it outlines the different types of human interactions that most businesses experience.

The “planet” concept refers to the importance of businesses to undertake environmentally sustainable practices. For example, companies that embrace CSR are not supposed to produce, or dump, harmful waste in the environment. Instead, they are supposed to protect the environment from such waste. The last pillar of the triple bottom-line success is profit.

This concept refers to the traditional understanding of profit, as the economic value of doing business. Companies that adopt CSR practices could easily achieve the three levels of success defined above (triple bottom-line success). Spence & Painter-Morland (2010) say the realisation of the triple bottom-line success has enabled most businesses to be more conscious of their ethical obligations in the society.

Improvement of Human Capital

The improvement of human capital is also another argument proposed by proponents of CSR to support its adoption. Particularly, proponents of CSR believe the concept can help to improve the recruitment and selection process by attracting the best human capital in the market (Garriga & Mele, 2004).

This view stems from the fact that many prospective employees use CSR records to decide if they want to work for a company, or not. Therefore, companies that adopt CSR practices have a competitive edge over companies that do not adopt the same practices (because they stand a better chance of attracting quality human capital).

Internally, proponents of CSR say its adoption would help to improve the quality of human capital when existing staff participate in CSR activities (Garriga & Mele, 2004). For example, Spence & Painter-Morland (2010) say when existing employees participate in fundraising activities, or charities, they become more motivated to work.

Spence & Painter-Morland (2010) add that such employees also become more experienced and loyal to the company. Overall, the perception of the company among its staff improves. Comprehensively, these benefits of CSR outline its adoption in corporate circles.

Arguments against CSR

Critics of CSR argue that the concept merely window-dresses company activities, without authentically portraying the “real” picture of company activities. They also argue that most companies engage in CSR activities to minimise public and government scrutiny (McAleer, 2003).

In part, this view stems from the opinion that most companies adopt CSR to legitimise capitalism by window-dressing the excesses of corporate activities.

People who hold such views believe proponents of CSR wanted to counter-check a social movement that questioned excessive corporate powers wielded by multinational organisations (McAleer, 2003). Thus, they say companies engage in CSR as a risk management concept.

The above argument highlights the view of many critics of CSR who believe companies that engage in CSR initiatives are insincere and hypocritical.

Less critical pundits believe that CSR distracts companies from their primary goal of making a profit (Spence & Painter-Morland, 2010). Similar views draw attention to the fact that only people have the need for social responsibility because companies do not have this need.

Therefore, they do not understand why companies should meet social responsibilities when their primary purpose is to make profits. Critics therefore believe that CSR is incongruent with the main purpose of business – to make a profit (Spence & Painter-Morland, 2010).

Some critics have taken this argument further by saying CSR limits free will. They compare major human advances in health, education, politics, (and such like factors) to free enterprise. They also believe CSR contradicts the purpose of civilisation by threatening the basis through which human societies have grown (McAleer, 2003).

Examples of CSR in the United Arab Emirates (UAE)

CSR is an old concept in the UAE because it traces its roots to ancient Islam. Islam often requires people to donate money and goods to charities and needy people. This is part of Sharia compliance. Recent years have seen an upsurge of UAE companies abiding by these principles. Noeiaghaei (2009) believes the UAE leads the Middle East in adopting CSR. This section of the paper highlights CSR initiatives by five UAE companies.

Jumeriah Group

The Jumeriah group is a real estate company that manages hotels and resorts (Noeiaghaei, 2009). CSR is a key principle of Jumeriah’s operation plans. So far, the company has received several accolades for its CSR records (the company received six awards for having the best CSR record in Dubai) (Noeiaghaei, 2009).

Jumeriah’s CSR initiatives span across four key components – stakeholder engagement, management of social and environmental impacts, the implementation of responsible business practices, and accountability to stakeholders. To ensure the company implements its CSR practices, Jumeriah has embedded its CSR practices to its strategic framework.

Jumeriah’s CSR initiatives show that Jumeriah Group subscribes to the corporate citizenship theory (because of its multifaceted CSR initiatives) (Noeiaghaei, 2009, p. 68). The main limitation to these CSR initiatives is the overall cost of supporting its CSR initiatives.

Therefore, because of cost limitations, the company can only participate in selected CSR projects (Fooks, 2012). Increased collaboration with other companies, like the Emirates Environmental Group (discussed below), would make its CSR initiatives more effective, in terms of cost reduction.

Emirates Environmental Group (EEG)

EEG is a Dubai-based company that promotes CSR practices in the emirate. Technically, the corporation is a civil society organisation, but receives government funds for its activities. As its name suggests, the scope of CSR practices pursued by the Emirates environmental group is environmental conservation.

Paper recycling, can recycling, battery cell collection, and mobile phone recycling are some initiatives pursued by the company (Ronnegard, 2012). The company has achieved tremendous success in these spheres of CSR by formulating action plans, involving communities, and educating the public about the importance of protecting the environment.

Like the Jumeriah group, EEG subscribes to the corporate citizenship theory because it pressures most UAE companies to participate in CSR initiatives. The incompatibility between different company philosophies and CSR outlines the main limitation of the company.

Therefore, while CSR is a good concept, it may clash with some company philosophies. Although this limitation exists, an expansion of the scope of EEG beyond Abu Dhabi and Dubai (into other Emirates) would improve its CSR effectiveness.

Al Futtaim Group (AFG)

Most businesses in the UAE are family-owned. AFG is also a family-owned business because its ownership revolves around a family of the same name. The scope of CSR practices in AFG spans different spheres including philanthropy, environmental conservation, and community empowerment (Bambridge, 2012).

For example, to promote environmental conservation, AFG has participated in different environmental projects, including the installation of information plaques in nature reserves across the country (Bambridge, 2012). In terms of philanthropy, the company runs different charities in Abu Dhabi.

Most AFG activities outline the corporate citizenship theory because the company is striving to be a good corporate citizen by “giving back” to the community (through its CSR initiatives) (Bambridge, 2012).

Like Jumeriah Group, its main limitation is CSR costs because it uses many resources to support CSR. However, it could improve its CSR initiatives by adopting standardised CSR practices, as outlined by its multinational partners.

Dubai Aluminium Company Limited (DUBAL)

DUBAL is a manufacturing company in Dubai, which produces building materials. The company’s CSR record is poor (compared to other companies highlighted in this paper). This is because the company subscribes to the theory of moral minimum. Stated differently, the company’s only scope of CSR is to “do no harm” to the society.

This theory outlines the main limitation of its CSR practices – loyalty to stockholder interests. The scope of its CSR initiatives also span within the confines of environmental management. Evidence shows that the company’s main CSR preoccupation is the reduction of environmental impact.

DUBAL could improve its CSR effectiveness by improving the safety and health standards of its companies because the organisation has received negative press for tolerating poor health and safety standards.

The Mariot Hotel Group (MHG)

The MHG is a tourism company based in the UAE. Like the Jumeriah group, the company’s main business is hotel management. However, unlike the latter, the company’s CSR initiatives mainly underscore the theory of moral minimum because most of its CSR initiatives only strive to reduce its environmental impact (Ronnegard, 2012).

The company’s introduction of the Environmentally Conscious Hospitality Operations programme is an example of the company’s effort in this regard. Through this operation, the scope of CSR operations for the company mainly span within environmental conservation.

The main limitation of its CSR operations is the compliance with stakeholder interests. In other words, it is difficult for the company to engage in further CSR initiatives because it would be overriding the interests of its stockholders. However, the company could further improve its CSR initiatives by expanding their scope to areas beyond environmental conservation (say, by employing more local employees to work in the hotels).

Conclusion

After weighing the findings of this paper, we see that CSR is an emerging concept that redefines how companies conduct their businesses. Globally, most companies subscribe to the corporate citizenship theory, stakeholder interest theory, moral minimum theory, and the profit maximisation theory.

However, the corporate citizenship theory emerges as the most appropriate theory for supporting CSR practices (because of its holistic nature). Some UAE companies subscribe to this theory, but costs and loyalty to stockholder interests prevent other companies from subscribing to the same theory.

Expanding the scope of CSR and seeking mutually beneficial relationships with other companies would however eliminate some of these limitations.

References

Bambridge, J. (2012). CSR: Al Futtaim Carillion. Retrieved from https://www.constructionweekonline.com/article-17999-csr-al-futtaim-carillion#.UqAZIidr1eU

Eisenhardt, K. (1989). Agency Theory: An Assessment and Review. The Academy of Management Review, 14(1), 57-74.

Fooks, G. (2012). The Limits of Corporate Social Responsibility: Techniquesof Neutralization, Stakeholder Management and Political CSR. Journal of Business Ethics, 21(12), 14-19.

Garriga, E., & Mele, D. (2004). Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics, 53(1), 51–71.

Huniche, M., & Pedersen, E. (2006). Corporate Citizenship in Developing Countries: New Partnership Perspectives. Copenhagen, Denmark: Copenhagen Business School Press DK.

McAleer, S. (2003). Friedman’s Stockholder Theory of Corporate Moral Responsibility. Teaching Business Ethics, 7(4), 437-451.

Noeiaghaei, N. (2009). Corporate Social Responsibility in UAE: A Case Study of Jumeirah Group’s CSR Practices. Dubai, UAE: The British University in Dubai.

Ronnegard, D. (2012). Corporate Social Responsibility and The United Arab Emirates. Stockholm, Sweden: Sustainable Development Group International.

Schwartz, M. (2011). Corporate Social Responsibility: An Ethical Approach. New York, NY: Broadview Press.

Spence, ‎L., & Painter-Morland, M. (2010). Ethics in Small and Medium Sized Enterprises: A Global Commentary. New York, NY: Springer.

CSR- History and Introduction

Over the years, there has been contention among scholars and industry experts on what exactly CSR means. Unfortunately, the contention and the debate that ensues have not resulted in a standard definition yet. Consequently, different people have different definitions of the term, and some scholars have even accused some researchers of distorting the CSR concept, so much that, it has become “morally vacuous, conceptually meaningless, and utterly unrecognizable” (Orlitzky 48).

Although scholars argue that CSR dates back to the 1920s, its first conceptualization in literature began in 1953, when Howard Bowen, an American Economist stated that organizations had a social obligation “to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values or our society” (Bowen cited by Maignan and Ferrell 4).

Following the conceptualization of CSR by Bowen in the 1950s, other CSR-related concepts such as corporate citizenship, social audits and corporate stewardship came into focus (Maignan and Ferrell 4). From the 1960s onwards, scholars and researchers have been more concerned about defining the CSR concept.

Defining Sustainability and CSR

The 1987 Brundlandt report closely ties sustainability to the sustainable yields concept. Specifically, the report argues that “sustainable yields development meets the needs of the present without compromising the ability of future generations to meet their own needs”. In other words, the Brundlandt report argues that sustainability is possible if the organizations (and humankind in general) consider the social, economical and ecological aspects similarly.

According to the report, organizations need to be responsible for their actions and inaction in both the short-term and long-term; if at all sustainability is to be attained. The report posits that the present action or inaction by organizations have an impact not only on its stakeholders, but also on the larger humankind with the inclusion of future generations.

Even though there is no standard definition of CSR, a literature review conducted by Dahlsrud reveals that a definition by the Commission of the European Communities is the most prevalent in literature. The Commission defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (Dahlsrud 7).

Among other terms that are popular in CSR definition include adhering to ethical values, complying with legal requirements, respecting communities, the environment and people, and contributing to the quality of life of the stakeholders and the larger communities. Among the vital indicators that come out of the CSR literature is the fact that organizations should not just pursue profitability without paying attention to the effect that their activities have on the employees, shareholders, communities, and the environment.

The importance of CSR for Textile and Apparel Industry

The textile and apparel industry has an infamous reputation for its use of cheap labor often sourced from overworked employees or underage workers. Most notable is the fact that most such industries are now in developing countries where labor laws are virtually non-existent, while unemployment rates are remarkably high.

Such combination of factors means that organizations can maximize output by overworking employees who are desperate to eke out a living in whatever way, and compensating them with relatively low wages.

The lack of legal and political frameworks in developing countries means that major players in the textile and apparel industry need to take the CSR initiatives a notch higher in order to cover for the management gap created by such legal and political inadequacies. After all, (Maignan and Ferrell 4) indicate that CSR operates outside the legal entitlement of an organization, and is usually voluntary in nature.

Why is CSR needed?

The need for CSR in the textile and apparel industry is underscored by the fact that in view of the lacking political, social and legal guidelines, the organizations operating in the industry have societal obligations that they need to meet. Notably, the need for such organizations to deliver societal values amidst high levels of poverty and insecurity where their business interests are located cannot be overemphasized.

Besides, the CSR hype has alerted employees, government, consumers and larger societies of the social responsibilities that organizations have towards them. Hence, adopting CSR initiatives serves the strategic business interests of organizations operating in the apparel and textile industry since it enables organizations to forge good and beneficial relationships with not only the employees, but also governments, non-government organizations and consumers.

The nature of fashion industry

The nature of the fashion industry is such that there are high lead times that require organizations to produce fashionable clothes at relatively low costs. The CSR in the fashion industry is therefore more focused on the production processes whose end results are the clothes people dress in.

To this end, (Dickson and Eckman 188) argues that CSR in the fashion industry is “an orientation encompassing the environment, its people, the apparel/textile products… and the systematic impact that production, marketing and consumption…has on multiple stakeholders and the environment”. Among the key factors that influence CSR in the fashion industry include the production of raw materials at the farm level, the production processes at the firm level, and the operational factors such as sweatshop and child labor.

On the environmental front, the extensive exploitation of natural resources such as water and farm land, and the use of chemical products impact negatively on the environment. Companies that have embraced CSR in the fashion industry therefore seek to address such issues though responsible and sustainable initiatives.

The background: conditions that propel companies to take sustainability into consideration

In literature, there are two basic reasons that propel companies to take sustainability into consideration: (I) the need to look good in the eyes of the employees, the consumers and other stakeholders; and (II) A genuine need to do well, and contribute to the welfare of all stakeholders affected by what the organization does.

In the first instance, organizations find adopting CSR initiatives necessary due to the reputational risk that comes with non-adoption. In the Nike case (explained elsewhere) for example, the firm was criticized for the use of child labor in its value chain, and the effect of such criticism in its sales volume in 2004 was far-reaching.

Internally, companies with a good social responsibility reputation are able to attract and retain employees more, while investors are willing to invest in such firms. In the second instance however, organizations adopt CSR/sustainability simply because “it is the right thing to do”.

The evolution of company’s initiatives- from merely safe guarding image to integrating it as part of their business strategy

CSR is no longer part of public relations practices for organizations. Rather, CSR is now being incorporated as part of the business strategy that organizations take. In the past, firms focused more in corporate communications and corporate philanthropy; nowadays however, CSR is viewed as an important differentiation tool especially in the competitive markets.

As Gildea notes, the consumers is at the middle of the revolution since contemporary purchasers boycott goods or services whose production harms the people, the society or the environmental resources (Gildea 21).

Public pressure

Non-governmental organizations (NGOs) have been on the fore front mobilizing and applying pressure on companies that violate what is considered as socially responsible/sustainable production or manufacturing processes. Among the most effective public pressure means are consumer boycotts. A 1990 article in the Economist, for example stated that “pressure groups are besieging American companies, politicizing business and often presenting executives with impossible choices.

Consumer boycotts are becoming an epidemic for one simple reason: they work” (The Economist 69). The public pressure through boycott is usually marked by negative publicity focusing on what a firm did or failed to do, and such sentiments usually affect its sales volumes and profitability. The public pressure is intended to coerce targeted companies to change their policies regarding an issue; or to communicate displeasure regarding how the target firm is handling an issue.

Global Sourcing Shift

The global sourcing shift is a product of globalization, where branded apparel manufacturers, lead firms, marketers and retailers in developed countries have all turned to bulk importation of their products from global suppliers, usually in developing countries (Gereffi 1).

Social and economic impact on countries

It has been argued that the relocation of apparel manufacturing industries to countries with cheap labor tantamount to moving jobs that would otherwise benefit local populations abroad. Incidentally, firms that have relocated their production to cheaper destinations usually have their largest markets in the same destinations they re-located from.

On the counter side however, developing countries where such factories are located benefit from foreign direct investments that creates jobs and earns such countries foreign exchange revenue from exports. However, such countries are now being forced to play catch-up with the developed countries as far as labor and environment-related laws are concerned.

Walmart

The catalyst of the Walmart’s Sustainability strategy

A report by the Stanford Graduate School of Business indicates that the Sustainable Value Networks (SVNs) adopted by Walmart acts as catalysts to the chain store’s sustainability strategy. Through the SVNs, Walmart is able to focus on specific areas in its supply chain such as food packaging, transportation or buildings among others.

The chain store identifies and develops any change that may improve sustainability in focus areas. Through the SNVs, Walmart identifies areas where it can enhance efficiency and/or reduce waste either single handedly or through engagement with its suppliers and other stakeholders.

The details of the strategy – specifically to textile and apparel

In the textile and apparel industry, the SNVs strategy in Walmart entails extensive life-cycle analyses done on the apparel production processes with the intention of understanding the exact impact that such processes have on the environment.

According to the report by the Stanford Graduate School of Business (6), it was found that “soap was responsible for an alarming level of greenhouse gas emissions, primarily due to the palm oil used in soap products”. Consequently, Walmart started working with suppliers in view of introducing the sustainable use of palm oil in soap products.

Walmart and Patagonia

In 2010, news broke that Walmart and Patagonia were partnering in order to help the former “move up the sustainable business learning curve fast” (Kimball n.pg.).

Through the partnership, Patagonia would help Walmart in developing a sustainability index for its products like it (Patagonia) had done with other entities such as Nike and North Face. As Walmart sought to introduce a scorecard to rate all its products on social impact and eco-friendliness, Patagonia seemed like the most ideal partner (Kimball). It is worth noting that Patagonia is revered as a leader in sustainable business practices.

Progress- result

In just one year, the Walmart-Pantagonia partnership has opened up to include other players in the apparel industry leading to the formation of the Sustainable Apparel Coalition (SAC). SAC has 40 members, who include industry heavy weights such as Patagonia, Walmart, Nike, Gap, and JC Penney among others.

Together, the 40 member in SAC came up with the Sustainable Apparel Index, which is defined as an “Industry-wide tool for measuring the environmental and social performance of apparel products and the supply chains that produces them” (Kirsten n.pg.). Through the index, the SAC members hope to promote efficient use of water and energy; less use of chemicals; less waste production; and enhance the working conditions in the apparel industry (Kirsten).

Nike

The initiatives that Nike have undertaken

Ever since the 1990s when Nokia took a hit from consumer boycotts and other forms of public pressure for the alleged use of child labor and sweatshop conditions by some of its suppliers in Asia, the company has taken up CSR initiatives to remedy its dented image. Key among such initiatives was the introduction of a Code of Conduct, which the company demanded that all its suppliers should abide to (Locke, Qin and Brause 8).

The company has further put the minimum age for workers to 18 years, and insists that the indoor air quality in all its supplier factories must meet the ‘Occupational Safety and Health Administration’ (OSHA) standards as used in the US. To boost compliance, (Locke et al. 9) observe that the company trains its suppliers, and has put together a team that monitors compliance in 21 countries.

By 2008, Nike has a further 1,000 production specialists employed to work with its suppliers globally for purposes of enhancing compliance to the Code of Conduct. But perhaps the most significant CSR initiatives by Nike are in the auditing systems, which include: (I) ‘Environment, Safety and Health (SHAPE) audit’; (II) ‘Management and Working Conditions Audit (M-Audit)’; and (III) annual inspections by the ‘Fair Labor Association (FLA)’ (Locke et al. 9).

The minimal impact in monitoring

While monitoring is one way of ensuring compliance of CSR and sustainability initiatives along the supply chain, its impact is often cited as inadequate (May, Cheney and Roper 413). In the apparel industry for example, questions are raised about whether CSR should just stop at ensuring that underage labor is not used, or whether organizations should go a step further and ensure that children go back to school.

Enforcing/ Monitoring CSR initiatives

Enforcing and monitoring of CSR and sustainability initiatives have been the subject of countless debates, both at the organizational level and on other social levels (May et al. 413). The European Union for example founded the ‘Business Social Compliance Initiative (BSCI)’ for purpose of monitoring how organizations complied with established social standards.

The monitoring is either scheduled or impromptu. While the enforcement of CSR initiatives especially in the Apparel industry is left to individual companies, monitoring is conducted by accredited monitors or independent monitoring agencies.

Lack of effectiveness

The lack of effectiveness in enforcement and monitoring of CSR initiatives is persistent in the apparel industry. Companies which shadow dress their production processes in order to create a positive feedback usually improve the working conditions whenever a scheduled audit is about to happen.

To increase effectiveness in enforcement and monitoring of CSR initiatives it is recommended that auditors should make impromptu visit to companies, establish complaint procedures for employees and other stakeholders, establish contact with local government agencies, and check and audit the company records regularly.

Conclusion

Summary

Generally, CSR initiatives lead to better working conditions for employees, cleaner production processes, energy efficiency and enhanced employee and consumer loyalty. Hence, organizations not only reap direct and indirect benefits from the CSR initiatives. Suppliers in the apparel industry are for example able to attract big clients and even financiers who are keen to protect their brand reputations. In the end, CSR becomes a business strategy, which effectively increases the gross returns in firms in the apparel industry.

Challenges still faced

One of the major challenges in CSR is contained in the fact that the concept is more of a fad than the reality in most contemporary firms. Hence, firms attempt to ‘look good’ by claiming to adopt CSR/sustainability initiatives, while the reality may be completely different. Additionally, the imprecise definition of the CSR concept may mean that different firms adopt different CSR initiatives, which as (May et al. 413) observe, may not be sufficient enough to address the contradictions caused by capitalism on societies. In the apparel industry for example, CSR may not be able to compensate indigenous people who have been of the receiving end of poor working environments, poor pay, long working hours and victimization at the work place.

Recommendations

Awareness creation regarding CSR practices and issues is needed if at all companies regardless of their sizes or financial positions are to benefit from the concept. Additionally, solutions to the different challenges facing the textile and apparel industry need to be found. For example, the competing codes of conducts need to be rationalized.

Lastly, (May et al. 413) observe that implementation and evaluation of CSR initiatives is always done away from the public eye, and this may create room for organizations to whitewash their activities by initiating programs, which are never followed up, or implemented to the full. In future, the implementation and evaluation of such initiatives should be conducted in a transparent manner.

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