Social Responsibility Of Bank Of Bahrain And Kuwait Accounting Essay

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Demand for corporate social responsibility has developed largely in response to the real or perceived failure of legislation, regulation and enforcement to control and regulate the impact of company activities on people and the environment. It has also arisen alongside the scaling back of command and control measures by many governments around the world.

As competition increases amongst companies, workers fear that there will be a race to the bottom as far as wages and conditions are concerned. This fear has some basis, in that labour-intensive industries - other things being equal - tend to locate where labour is cheapest. But if competition has increased, so has scrutiny of companies. It is not only the State that polices companies in the modern world; there is also an active and informed non-governmental organizations (NGO) community which increasingly performs this function.

Social wages, decent working hours, basic health and safety standards, abolition of child labour and protection against discrimination are just some of the trade union issues that fall within any reasonable definition of CSR. However, CSR also embraces a range of topics that have until recently not been part of the traditional trade union agenda or only peripherally a part of it. CSR is today typically associated with the concept of sustainable development or "sustainability". Trade unions are, in response, developing their sustainability agendas and linking these with improved and extended CSR.

Research Objective:

The objective of the study is to find out the practice and benefits of social responsibility to the society.

Are the social responsibility measures being followed by the bank?

It is considered responsibility or just expenditure levied on the bank?

What are the benefits of social responsibility to the society?

Research Problem:

The statement of the problem is to find out the following.

What is the problem that the BBK has been facing while making social responsibility report?

Is the social responsibility report being depicted in the financial statement of the company issued in the year end?

Is social responsibility report been considered to be an extra expenditure or part of social duty?

Research Questions:

The data will collected from primary sources via questionnaire and secondary sources like previous studies and researches, book and magazines, and online resources.

The population for the study is BBK. BBK is the leading bank in Bahrain. The bank provides a variety of investment solutions to its customers. Thus the banks is a provider of a various alternate investment related products like mutual funds, hedge funds, insurance, fixed deposits, term deposits, real estate etc. The bank has its operations in North America and Europe and thereby facilitates investment in these countries.

The sample size foreseen to fulfill the study is 10 questionnaires which are solved by the BBK employees that work in the accounting and finance department.

Scope and limitations:

The scope of this research is only to the extent of the this particular bank that is Bank of Bahrain and Kuwait so as to see the degree of their interest with the social environmental issues and the measures taken by them to save the environment. The main variables that the researchers will look into are:

Government Regulations,

Budget,

Methods and companionship to deliver such responsibility to public.

The research is time bounded by the subject course length; therefore the researchers will try their best to get as much relevant data as possible.

Significance of the study:

This study will come in handy to serve other manufacturing companies and any related parties Thus; it will be significant for the following groups:

Manufacturing companies

General public

Business students

Other researchers

Definition of terms

Sustainability refers to an organization's activities, typically considered voluntary, that demonstrate the inclusion of social and environmental concerns in business operations and in interactions with stakeholders (van Marrewijk & Verre, 2003).

Corporate responsibility or sustainability is the most important feature of the business and society literature, addressing topics as follows.

Business ethics,

Corporate social performance,

Global corporate citizenship,

And finally stakeholder management.

Literature & Related Studies II Chapter

Literature Reviews:

It is a defensive policy that is used by the companies today to respond to the activist that are working for the upgradation of the society and always looking for finance. Thus; through companies indirectly conveys their message of their spending on social responsibility. Thus the social responsibility is based on a moral argument, a rational argument, or an economic argument (Werther & Chandler, 2006).

Campbell(2007) believed that social responsibility is based on the factors such as financial conditions of the corporate, the economic health of the country and conditions of the people living in and around the company.

Social responsibility is more o a cause related marketing to a more generous work. It helps the corporate to somehow help the society and try to pay back some part of their income to help the people under poverty to survive in a more better conditions. (Kotler & Lee, 2005).

Jackson and Nelson (2004) call it a new rules of the game wherein the companies work for public good and welfare by concentrating on their basic needs like education, health etc.

The rationale for CSR can be based on a moral argument, a rational argument, or an economic argument (Werther & Chandler, 2006). Campbell (2007) is representative of a group of studies that create testable propositions related to the conditions under which organizations will move toward CSR.

He sees corporations' level of social responsibility as being influenced by factors such as financial conditions of the firm, health of the economy, and well-enforced state regulations. Why companies take on CSR is also discussed in the literature in terms of the specific initiatives under which CSR may fall. Ways of describing these rationales vary, from the more skeptical view of cause-related marketing to a more generous attribution of genuine socially responsible business practices (Kotler & Lee, 2005).

To ascertain how CSR is implemented in organizations, some research uses a developmental framework to show change in awareness, strategy, and action over time, and posits stages of CSR from elementary to transforming (e.g., Mirvis & Googins, 2006).

Jackson and Nelson (2004) take more of a how-to approach, offering a principle-based framework for mastering what they call the "new rules of the game." Examples of principles include harnessing innovation for the public good, putting people at the center, and spreading economic opportunity.

Husted and Allen (2007) point out that much effort has focused on CSR in an attempt to demonstrate that positive CSR can be linked to improved financial performance. There is a growing sense that looking after the people and the community as well as the environment are all relevant to long-term business survival.Though the business case for CSR appears strong, the literature also reflects the fact that there are doubts as well as cynicism (Jayne, 2004).

A good example of the contrast between CSR as business case and CSR as ethical issue is reported by Hartman, Rubin, and Dhanda (2007). In its cross-cultural analysis of communication of CSR activities in U.S. and European corporations, the article demonstrates that U.S. companies justify CSR using economics or bottom-line terms and arguments in their communications, whereas European Union companies rely more heavily on language or the theories of citizenship, corporate accountability, or moral commitment. Results also indicate that European companies do not value sustainability to the exclusion of financial elements, but instead project sustainability commitment in addition to financial commitment.

U.S. companies focus more heavily on financial justifications, whereas European Union companies incorporate both financial and sustainability elements in justifying their CSR. European companies have a leading role in the CSR movement as a sustainable development opportunity (Hulm, 2006).

One source of ongoing CSR commitment is reflected in the number of articles focused on the need for corporations to take an active role in poverty reduction efforts. This literature often concludes with a call for a more explicit acknowledgement of poverty in the corporate citizenship field and for corporate leadership to name the issue, frame it in

such a way as to accelerate its reduction, and take an active role in poverty reduction efforts (Boyle & Boguslaw, 2007). Companies must push to seek something other than the lowest short-term cost for the highest short-term gain (Berkhout, 2005).

Misconceptions and inaccurate assumptions exist about business opportunities and profitability available at the bottom of the economic pyramid. By serving the poor, business can gain new sources of rapid revenue growth and greater efficiencies with cost reduction initiatives for the multinational corporations, which also translates to increased purchasing power for the local consumers, as well as access to innovation (Prahalad & Hammond, 2003).

Research Methodology III Chapter

Research Design

The research is designed in the form of the questionnaires and interview questions. The attempt was made to keep secrecy and clarify the questions to the respondent before the filling of questionnaire. Also the interview questions were designed to maintain secrecy of the identity of the person.

Sources of Data

The data will collected from primary sources via questionnaire and secondary sources like previous studies and researches, book and magazines, and online resources.

The population for the study is BBK. BBK one of the leading bank in Bahrain. The bank provides a variety of investment solutions to its customers. Thus the bank is a provider of a various alternate investment related products like mutual funds, hedge funds, insurance, fixed deposits, term deposits, real estate etc. The bank has its operations in North America and Europe and thereby facilitates investment in these countries.

The sample size foreseen to fulfill the study is 10 questionnaires which are solved by the BBK employees that work in the accounting and finance department.

Purpose and research questions or null hypothesis

The main purpose of the research is to find the out the social responsibility work of the KKB. The research question includes the followings.

What is the problem that the BBK has been facing while making social responsibility report?

Is the social responsibility report being depicted in the financial statement of the company issued in the year end?

Is social responsibility report been considered to be an extra expenditure or part of social duty?

Sample Size:

The sample size consisted of 30 employees of the bank who are working at different designations with ranging years of service.

Validity and reliability

The research was done by taking interviews and filling questionnaires by the team. Interview was taken through verbal speech. While the questionnaire was filled after the clarifying the questions and given space to the person to give answers without any worry or pressure.

Scope and limitations

The scope of the research will be limited to the use of the social responsibility report in financial reporting. The study will be conducted on the chosen for this purpose and not otherwise. The reason for that is because the study must be submitted within a previously set time frame in order to pass the requirement of the subject.

Questionaires:

Do you think that Corporate Social Responsibility or CSR is followed in your Bank?

Yes.

No.

Do you think that more improvements can be made in terms of administrating CSR in the BBK?

Yes.

No.

How would you rate the CSR facilities available in your BBK?

Excellent.

Satisfied.

Average.

Less Satisfied.

Not Satisfied.

Suggest the CSR facilities that can be and needed to be added at the urgent?

………………………………

……………………………….

…………………………..

How would you rate the already administered CSR arrangements in your bank?

Sufficient.

Average.

Below Average.

Not sufficient.

What are the inclusions that you want? Suggest?

………………………………..

………………………………….

…………………….

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