Evolution Of Corporate Social Responsibility Commerce Essay

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Over the years, organizations have played a key role in contributing either negatively or positively to the agenda of a society. These activities have constantly attracted the interest of the media and public at large especially when it relates to corporate misbehaviour and or contributions regarding the environment. (Crane et al 2008). According to them, issues such as human rights violations, polluting the environment or misinforming customers over the past years had raised the awareness level and also ensured organizations act responsibly in its environment.

Bowen (1953) in his book explained the shift in terminology which has occurred from just being the social responsibility of business to CSR. In recent times, this topic has cut across the globe and have seen most corporations put into practice that which portrays responsibility, respect for ethics and moral standards, most importantly value for human rights and lives. This has led to great proliferation of theories, approaches and terminologies all which are now applicable in the field of business (Garriga, E., & Melé, 2004).

Today, CSR has become a practice which MNCs use the likes ; corporate responsibility reports, sustainability programs etc as being transparent in its entire doings to burnish its image, promote wide-ranging policies as well as ensure labor rights.

2.0 EVOLUTION OF CORPORATE SOCIAL RESPONSIBILITY

Over the years, diverse perspectives of Corporate Social Responsibility (CSR) have emerged from different authors while attempting to explain what the theme really means. The 20th century however has witnessed more debates hovering round the theme of CSR especially in the second half of the 20th century (Garriga, E., & Melé, 2004).

Rahman (2011), on the other hand argues that there is no precise definition which explains CSR, instead varieties of definition cropping up at different times and scenarios are direct results of studies and theories developed by the scholars in the past based on the political, economical and environmental views of the time. See appendix ( ) for evolution i.e. shift from the contemporary to the modern view of CSR.

The summary of the evolution of CSR as explained in the appendix are thus;

1950s Era: The focus was basically on Obligation to the society i.e. Social responsibility

1960s Era: Developing of Relationship between organizations and society.

1970s Era: Movement towards the implementation stages CSR and increased awareness level.

1980s Era: Stakeholder involvement and relationship building towards competitive advantage.

21st Century Era: integration of social and environmental concern and activities based on the Global Compact Principles to the society

3.0 CSR AS A GLOBAL SCOPE

CSR in its undiluted form had relatively been a standing phenomenon over the years gone by. In recent times, managers have been involved in activities which could be described as CSR almost from the on-set of the industrial revolution (Davis, Whitman and Zald, 2006). Prior to the 1990s from the different dimensions given to CSR above, the theme was limited to corporate philanthropy; however the post era of the contemporary is gradually shifting towards different concepts and practices.

Kercher (2007) explained that twenty years ago, environmental and social issues were for meant for the activists however, in recent times CSR has become a major aspect cut across the globe in which everyone is responsible for each action. Scherer &Palazzo (2007) pointed out that due to the shift towards globalization; Pattern of thoughts has also adopted a larger politically enlarged CSR theme. Milovanović et al (2009) in their view explained that organizations of the 21st century are now more conscious and corporately responsible as they produce and market their products which would not be harmful to the society in their quest for getting the trust of customers, public at large they ought to be more socially responsible.

As globalization evolves, MNCs have also recognized the importance of running CSR programs in their various locations. (Kurucz et al 2008; Porter 1985) also explained that organizations get involved in CSR practices to create value for the business in ways such as; building reputation, getting competitive advantages, costs and risk, creating competitive advantage, building of its reputation and finally legitimacy. See appendix ( ).

MNCs are keys to modern globalization and CRS issues, and occasionally singled out as focal point regarding CSR due to their size, complexity and also considering the fact they operate in more than one jurisdiction either directly or through J.V .Kercher (2007). The involvement of MNCs in a country may boost the development process, nevertheless issues such as abuse of power, gross disrespect for values, gross misconduct in host countries and ability to apprehend the activities of these MNCs may likely be inevitable. Ruggie (2003) stressed that in recent years, MNCs and International organizations such as IMF have been playing the role meant for the host countries due to the level of its input and development. In as much as globalization gives much freedom to these MNCs, There should also be calls for corporate responsible behaviour, corporate citizenship and high respect for morals and ethics.

The scope of MNCs over the years has experienced a wider coverage with the shift towards globalization, liberalization and privatization in developing countries, (Korten, 2001; Strike et al., 2006) stated that the theme of globalization has re-directed attention to MNCs and as such positive and negative consequences have intensified the urgent need for Corporate citizenship and responsibility. (Bansaland Roth, 2000; Chirstmann, 2004) also explains that global and institutional pressures are catalysts employed in higher realms CSR involvement by these MNCs. Amaeshi et al (2006) argues that the phrase which exonerates these MNCs from facing legal actions especially when its supply chain is a different entity have also increased their level of corporate and societal irresponsibility. According to them, the MNCs exercise power to influence the weaker parties i.e. Setting codes of conduct and standards.

This review reflects how globalization has fine-tuned the concept of CSR and how it relates with globalization. It also explains how flexible CSR programs can be in different countries since there is no single commonly accepted definition. The case of Nike Corporation is an example; where the amount paid to workers in its Southeast Asian plants was low but still in line with their local customs, compared to other of its production outlets with higher wages been paid. Campbell (2007) however concluded based on research that Nike was operating according to a double standard.

4.0 THEORETICAL APPLICATIONS

There are four dimensions of CSR theories which could be used in explaining the theme. However, the Ethical and instrumental theories respectively have been picked due to its relevance in further explaining the activities of the MNCs.

4.1 Ethical & Instrumental theories

Garriga & Mele (2004) argued that there are four groups of ethical theories which focus on the relationship that exists between an organization and its society. These theories are: normative stakeholder, universal rights, common good approach and sustainable development. See appendix ( ) for application and its relevance to the theme.

The Instrumental theory on the other hand, is believed to have enjoyed a lasting tradition and acceptability in the field of business. Windsor (2001 p226). This perspective sees CSR as a tool for wealth creation, maximization and also other economic objectives. Garriga & Mele (2004). See appendix ( ) for further explanations

5.0 SOCIAL AND ECONOMIC CHANGES

5.1 The Global Compact: CSR in Practice

The UN global compact, an initiative created and announced at the World Economic Forum in Davos, Switzerland in the year 1999 and implemented in 2000 has its root in ensuring a more responsible global economic behaviour and organizations acting corporately responsible in its operating environment. (Global Compact Office, 2001). The attached benefit to this initiative is that it provides a global framework in which promotion of sustainable growth and good citizenship is guaranteed and also achieved. (Global Compact Office, 2001: 1).

In a global setting where businesses are springing forth on daily basis, it is pertinent for the regulatory body to put in place measures that will serve as checks and balances for its operations so as to avoid corporate and business irresponsibility, environmental degradation and violation of fundamental ethics and moral beliefs of the society.

The early part of the 1960s experienced a rise as regards moral and ethical issues which was becoming alarming (Lantos, 2001). According to his research, most businesses were into the sales and offering of unsafe products and consumables which were considered harmful to the immediate environment. In addition to this phenomenon, the society was not making head way in respect to assisting economically stranded citizens as bribery and corruption was the order of the day (Lantos, 2001). To this effect, the Global Compact is saddled with integrating cultural aspects, ethics and morals in the global integrated approach at international business levels of all organizations with its 10 principles. Wood and Logsdon (2001: 95). See appendix ( ) for principles.

Regardless of the positive recommendations the GC initiative has gotten since inception as explained by (Hemmati 2002; Stern et al. 2004), it is still uncertain if organizations have fully responded in terms of being socially and environmentally responsible in its operations. Few critics however are still of the belief that the impact is low due to the fact that organizations are lacking behind as regards tackling problems emerging from the operating society. (Corpwatch 2002; Amnesty International et al. 2004).

Another critic of this initiative has been that raised by Utting (2002: 32). He stated that only few effective mechanisms have been put in place to ensure alignment with the 10 principles. Furthermore, the fact that GC places more priority to image and legitimacy of

Businesses instead improving social and environmental standards have also been identified by the author.

Overall, the initiative has succeeded in rebranding the activities of the organizations by engaging them in transparent practices i.e. scenarios where companies are expected to demonstrate their commitment to the cause by posting progress reports on their activities in relation to the practices on the Global Compact's website (Global Compact Office, 2001: 2).

6.0 PROGRESSIVE CSR VERSUS GREEN WASHING

As the old saying goes; "The business of business is business", that has been the case of most organisations over the years all striving to maximize profit regardless of the consequences of their actions in relation to its operating environment (Parker 2003). However, with the growing trend of CSR, there has been a gradual shift from the hard-nosed approach to that which is more environmental and society friendly.

Enoch (2007) examined the efforts by the government and also progressive movement made by organisations itself towards sustainability and eco-modernity. According to him, the last 30years had experienced series of succession of government which had affected neoliberal programmes, massive deregulation and privatization, leading to its withdrawal from the areas in which it had bore responsibilities. Following the initial hand-offs by the state as regards field and business regulations, Enoch stated that the expectations were on corporations to tackle their societal and ecological issues. All these efforts are targeted towards making each corporation responsible to its environment.

Bendell (2004) further explained that the emergence of a globalized society in the past few decades had created a new beginning and avenue for handling issues such as corporate power and irresponsibility. He introduced the capital accountability concept that places emphasis on Corporations seeing beyond just profit realization but instead, looking more into corporate accountability, corporate social responsibility and anti-globalization. In recent times, the society has become more demanding and expectant and as such, corporations have seen themselves been forced to behave more responsibly for it to keep its customers and also satisfy its stakeholders. Principles and also various codes of conduct and regulatory bodies such as the UN global compact have been put in place which is to serve as checks and balances for corporations.

On the contrary, a few authors such as (De la et al, 2005; Quazi and O'Brien, 2000) are still of the opinion that the main priority of business is to provide goods and services leading to maximization of profit within the framework of legal requirements. However, their view on this makes one to wonder especially when much emphasis has been placed on profit ahead of other factors, if Corporations go into these CSR programmes with genuine intentions or just to create a favourable poster image to the public, which is also referred to as "green washing".

Greenwashing is seen as the act of misleading consumers in respect to environmental practices and benefits of a company in the offering of its product or service (Greenpeace, n.d.). The number of companies getting involved in green washing and claims over the years according to Gallicano (2011) has been on the increase. This is due to the level of attention organizations get from consumers in monitoring its environmental footprint. Li & Bernoff, (2008) added that control of information lies within with individuals rather than corporations. Lyon (2006) further stressed that Organizations have over the years been successful in portraying themselves as being eco-friendly due to the limited information held by the public in respect to their operations and their sustainable business practices. See appendix ( ) for Case on Shell.

Bivins (2009) was one of the authors that had criticized the actions of corporations involved in this practice, he was of the opinion that little or nothing is done to protect the environment yet a lot of paper works and publicity is being made. Rawlins (2009) stated that every company has three major obligations to live up to, these are; transparency i.e. presents accurate, substantial, and useful information, listen to stakeholders to fetch information required and lastly companies should provide objective and information as regards their activities and policies.

The society expects vital information as regards corporation's activities, especially when ethics and moral standards are paramount; it is therefore the duty of organizations to provide consumers the accuracy of environmental claims required. (Vos, 2009; Ramus & Montiel, 2005). It has been a common trend in business in which most of organization's activities and operations are hidden from the public, especially when it contradicts the stipulated environmental laws. In other to cover its track, some of these greenwashing activities are engaged and employed. As stated by Laufer (2003), the confusion regarding the veracity of greenwashing claims is as a result of no or little standards regarding corporate social responsibility reporting formats and auditing requirements.

7.0 REPORTING AND ACCOUNTABILITY.

Nielsen & Thomsen (2007) explained that the emergence of non-financial reporting has helped boost transparency in respect to corporate actions about its environmental issues. According to them, themes such as the triple bottom line and sustainability accounting which had emerged as helped in looking beyond financial accounting but also including social and environmental performance in its practice. Furthermore, they added that with the emergence of global reporting initiative (GRI), some companies have performed better. See appendix ( ) for GRI and more on reporting.

8.0 CONCLUSION

Overall the theme of CSR has been discussed in relation to its evolution, rise to prominence, different contrasting and also comparing views. The study has also examined the angles used in explaining different concepts and theories which has now been applicable in all aspects of the theme. Different sub-topics such as the economic and social the theme has had on the society were also not left. In addition reporting, accountability and greenwashing also gave the study more credibility as real life scenarios aided in explanations.

On a concluding note, this essay explored CSR in the globalized world and the importance of stakeholders in relation to the activities of the MNCs. It gave a clear insight into CSR entails and also pointed out to the fact that pinning it down to a particular definition and view would not be describing the entirety of theme.

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