Analysing the purpose of Corporate Social Responsibility

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Corporate Social Responsibility (CSR): a marketing tool or a strategic approach for organisational sustainable development programme- A Case Study of Integrated Service Solutions (ISS UK)

Globalization, competitive pressure, and quest for productivity have been a major driver for change in business world today. Activities of people in the business world have led to different problems and interests within business cycle. Many companies used Corporate Social Responsibility (CSR) as a framework to consider the interest of all stakeholders in the business environment. CSR contribution of many businesses can be viewed with different meaning and culture, in the United State is like charity model but in the EU member states, it is part of core business activities in a socially responsible manner for companies operating within Europe.

United Kingdom (UK) government's policy on CSR was as a means to crack down on irresponsible business behaviours and to raise contribution of companies toward CSR above minimum legal standards. Many multinational companies operating in Europe make special annual CSR reports; companies like Tesco and Marks & Spencer but some companies like Lidl do not account for it. Companies that make provisions for CSR pay serious attention to it and even compete with each other to show their contribution towards CSR, in order to display their commitment as responsible companies. They make sure that CSR is the pivotal point for their core business activities, which serve as a centre message to outside world. Moreover, their CSR capture the interest of all stakeholders (shareholders, employees, customers, suppliers, business partners, pressure groups, and government) as appropriate.

There is general controversy on CSR to be part of core activities of any organisation by leading scholars like British Economist David Henderson. Many multinational companies were seriously criticised with their CSR policy as an avenue for increasing profitability in long run. There are two sides to these arguments on CSR; the argument against CSR was that it is a new way of deceiving and exploiting people while the argument in favour of CSR was that it is a best way for a responsible company to give back to the society where it operates. Another problem associated with CSR campaigners like Friends of the Earth is that those who make effort to publish their CSR contribution annually (like Tesco) was not free of criticism like those who does not publish anything on CSR (like Lidl). This raises major question in the mind of people; is there any acceptable threshold in place to determine companies' contribution on CSR?

It is very difficult for most of these multinational companies to convince public that their CSR contribution is solely for sustainable development without marketing motive behind it. However, the CSR contribution provides by company (like ISS UK) may have different motives attached to it base on implementation. Some of the CSR contributions of ISS UK can be viewed as a marketing tool because it create more marketing promotion for the company than the benefits derived from it by the beneficiaries. For example, ISS UK boldly prints their name on any goods given out either as charity or to their staff. The benefits that the company derive from this action in term of recognition and brand image outweigh its benefits to the recipients. Moreover, the company have moved far to convince the public about its CSR contribution as a pure sustainable development programme by joining Business in the Community (BITC) - a leading responsible business organisation.

1.1 Research Questions

The different meanings attached to CSR in term of approach and implementation has raised series of questions:

Does CSR rating and ranking systems reflect true corporate governance of a company?

Does CSR contribution actually enhance sustainable environmental development?

How does CSR contribution of ISS UK have positive impact on its brand-image promotion and financial performance?

Is there any statistical relationship between CSR contribution of ISS UK and financial performance (profitability)?

1.2 Hypothesis Testing

The research study will test for hypothesis to analyse issues surrounding CSR.

To show if there is any statistical relationship between CSR contribution of ISS UK and their Corporate Financial Performance (CFP) using simple regression analysis

To show if CSR rating and ranking systems reflect true corporate governance of a company

To check relationship between CSR contribution and sustainable development

1.3 Aims

The dissertation will critically evaluate the position of academic scholars regarding CSR contributions and the various reputation ratings, and outline different meanings attached to sustainable development. Moreover, it will examine the statistical relationship between CSR contributions and profitability of ISS UK. In addition, the dissertation will evaluate whether CSR is for marketing purposes or whether it is supportive of the strategy the organisation is taking towards sustainable development. The recommendations from the dissertation will be available to ISS UK, Department of Trade & Investment, other governmental agencies with an interest, and to other institutions that need it for further research.

1.4 Objectives

The following objectives will be undertaken:

To critically review literature on CSR and Sustainable Development

To examine the reputations rating in place, for companies based on their CSR contribution

To determine if there is statistical relationship between CSR contribution of ISS UK and their profitability

To anticipate if there is any appropriate percentage of ISS's pre-tax profits to be spent toward CSR

To critically evaluate if CSR contribution is more important for public limited company than private company

To make recommendations to ISS UK, the Department of Trade & Investment, other governmental agencies with an interest, and to other institutions that need it for further research

2.0 Literature Review

2.1 Background

The dissertation focuses on notable positions of scholars regarding Corporate Social Responsibility (CSR) and Sustainable Development (SD). It may be noted that the definition of some concepts in the social sciences are sometimes confused and often arises because the usage of such terms might have changed over time. Sometimes the concepts were being used as synonyms for other concepts. It is therefore necessary to explain such concepts (like CSR and Sustainable Development) to enable readers to precisely know their meanings, particularly in the context in which they were used.

The genesis of CSR in academic history can be traced back to early 30s when Dean Donham had written in the Harvard Business Review of the necessity on businessmen to be responsible towards other groups in the community (Donham, 1927, 1929). Dodd (1932) pointed out in article published in the Harvard Law Review that substantial strides were being made in the direction of a view of business as an economic institution with both a social-service and profit-making function. Okoye (2009) mentioned that CSR get its popular beginning in 1950s with writers such as Abrams (1951) and Bowen (1953) with his book, Social Responsibilities of the Businessman. Abrams and Bowen contribution was followed by a host of supportive and critical analysts and writers that have helped broaden the acceptability and popularity of the concept. These also include writers such as Davis (1960) and Carroll (1979) as well as critical writers like Levitt (1958) and Friedman (1970).

Okoye (2009) agreed that CSR is generally acceptable as a concept but a major problem associated with CSR discourse is the lack of an agreed normative basis underpinning CSR practice (Campbell, 2007; Palazzo and Scherer, 2007) and this problem has been linked to the absence of an agreed universal definition of CSR. Although, attempts to map the landscape of CSR ideas and theories reveal its complexity and the most generalised of analytical formats, questions regarding the relationship between corporations and society have been analysed in the two-fold vein; that of rights approaches and power models (McMahon,1986).

Okoye used Essentially Contested Concept (ECC) theory proposed by Gallie (an eminent philosophical scholar) in 1956 to address concepts that by their very nature engender perpetual disputes then suggested that CSR is an ECC and this explains the potential for several conceptions of CSR, however, it does not totally obviate the need for a definition of its core or common reference point, if only to ensure that the contestants are dealing with an identical subject matter.

Controversy surrounding CSR make it impossible to measure its impact towards sustainable development which most companies claimed as the main objective of their CSR contributions. Aras and Crowther (2008a) noted that sustainable development is a notoriously ambiguous concept, as wide arrays of views have fallen under its umbrella. Aras and Crowther (2007a, b) proposed a Model of corporate sustainability that mentioned four aspects of sustainability which need to be recognised and analysed, namely: societal influence, environmental impact, organisational culture, and finance. Furthermore, the four aspects was resolved into two-dimensional matrix along the polarities of internal vs. external focus and short term vs. long term focus which together represent a complete representation of organisational performance (Aras and Crowther, 2008b, see appendix for the model-figure1).

Many academic writers have argued that most of the CSR contributions were not for sustainable development but marketing tools to promote company's image and enhance financial performance. As mentioned by Rafael C et al (2009) with empirical evidence that CSR generates more consumer-company identification (C-C identification) because it improves brand prestige and distinctiveness; brand coherence is also a powerful antecedent of brand attractiveness in the context of CSR communication, and helps to generate better attitude towards the brand and greater purchase intention.

2.2 The Concept of Corporate Social Responsibility (CSR)

Corporate Social Responsibility is a versatile concept in modern corporate governance which has different meanings across all disciplines. CSR is a concept with different understanding that has significant implications for academic scholars, businesses, and society at large (including government). Williams and Aguilera (2008) pointed out that CSR like other concepts in social sciences have come to term with different definitions but in its broadest sense, means "doing good things" and having a positive impact. However, there is no general acceptable definition of CSR, and this has complicated efforts to measure and assess its accomplishments and drawbacks.

"Corporate Social Responsibility (CSR) means something, but not always the same thing to everybody. To some it conveys the idea of legal responsibility or liability; to others, it means social responsible behaviour in the ethical sense; to still others, the meaning transmitted is that of 'responsible for' in a causal mode; many simply equate it with a charitable contribution; some take it to mean socially conscious; many of those who embrace it most fervently see it as a mere synonym for legitimacy in the context of belonging or being proper or valid; a few see a sort of fiduciary duty imposing higher standards of behaviour on businessmen than on citizens at large" (Votaw, 1972, p.25).

Campbell (2007) noted that the major problem for lack of agreed universal definition of CSR is that an essential preliminary to the normative debate is the clarification of what is to count as 'CSR' while this was echoed by Whitehouse (2003) when she stressed that the apparent failure of CSR to fulfil its potential in remedying the adverse impact of corporate activity is due in part to the failure on the part of its advocates to establish a universally accepted definition of the term and the normative grounding necessary for effective regulation (Okoye, 2009).

Rafael C et al. (2009) conclude after empirical research that a socially responsible company is perceived by individuals with greater prestige; CSR helps the consumer to believe that everyone else has a more positive perception of the company (Brammer and Millington, 2005; Lafferty and Goldsmith, 1999). They confirmed that consumer-company identification (C-C identification) generate attitudinal and behavioural responses in consumers which are beneficial for companies (Bhattacharya and Sen, 2003; Cornwell and Coote, 2005) and emphasised that CSR is an attribute which distinguishes the brand from other competitors, making it special and different from other brands. They stressed further that socially responsible brand achieves greater value and is perceived as more attractive, and therefore individuals related to it can be positively distinguished.

Orlitzky et al. (2003) conclude in their studies that there is a statistical relationship between CSR and Corporate Financial Performance-CFP and that CFP is a predictor of future CSR but CSR also predicts CFP. They stressed that the correlation between CSR and CFP was due to both internal (competency) and external (reputation) measures, and of the two, the reputation effect was stronger. Their findings support previous empirical studies of the relationship between CSR and organisational performance by Pava and Krausz's (1996). In 1996 studies, firms perceived as having met social responsibility criteria have either outperformed or performed as well as other firms that are not socially responsible.

Aguilera et al. (2007) voiced out that there should be closure of debate on the relationship between CSR and financial performance, stating that there is a lot of empirical evidence of a positive and significant association between two. They are in support of previous findings by Margolis and Walsh's (2001) and Orlitzky et al (2003) and these two meta-analyses add credence to the widely agreed notion that being socially responsible would improve a firm's financial performance.

Barnett and Salomon (2003) suggest that the relationship between financial and social performance is neither strictly positive nor negative. They stated that it is curvilinear, with strongest financial returns to low and high levels of social responsibility and significantly lower return to moderate levels of social responsibility. They stressed further that despite intensity of study directed at it, the relationship between Corporate Social Performance-CSP and Corporate Financial Performance-CFP remain in dispute.

Belaid Rettab et al. (2008) conclude in their study that CSR has a positive relationship with all three measures of organisational performance: financial performance, employee commitment, and corporate reputation. They stated that number of studies have shown that CSR improve organisational performance in western developed economies and contrary to their own prediction, the previous studies tally with the study carried out in Dubai using survey data from 280 firms operating in that region. They stressed that one could argue that in emerging economies (like Dubai), the link between CSR and a firm's financial performance is contingent on stakeholders' perceptions of CSR and subsequent reactions to CSR efforts.

Leonard and Parsa (2009) noted that relationship between CSR and financial performance is further complicated by the fact that there are no general agreed measurement methodologies and tools used to evaluate the link between CSR initiatives and a firm's financial performance. They stressed that in measuring CSR performance, combination of subjective indicators are generally used to measure a firm's performance on CSR initiatives such as corporate disclosures (annual reports), perceptions, CSR performance reports conducted by independent organisations such as Kinder, Lydenberg and Domini (KLD) rating systems, media reports, academic journals and government reports (Waddock and Graves, 1997).

Leonard and Parsa proposed a parsimonious model (The Corporate Socially Responsible and Financial Performance- CSRFINP Matrix) that a firm can use to perform their own "check up" or by investors to assess and assign a score. They mentioned that the fundamental premise of CSRFINP model is to rank and classify firms based on their financial performance relative to industry standards as well as its social value as indicated by societal perceptions in combination with the firm's observed practice of social initiatives. They stressed that firm can fall into one of the model's four quadrants based on their CSR and financial performance scores. A firm can fall on black or the "Aggressive" quadrant if it pursue purely financial initiatives and performs well on those initiatives. If a firm is a non profit entity and pursue purely social responsibility initiatives, then this firm will be regarded as purely green or placed in the "Green" quadrant. Firm that performed well both on social responsibility and financial initiatives fall into blue or "Progressive" quadrant while firm that underperform on both social responsibility and financial initiatives fall into yellow or "Repressive" quadrant (see appendix for the model-figure2).

Indeed it is noticeable that extractive industries - which by their nature cannot be sustainable in the long term - make sustainability a very prominent issue. Any analysis of these statements regarding sustainability however quickly reveals the uncertainty regarding what is meant by this sustainability. Clearly the vast majority do not mean sustainability as discussed in this article, or as defined by the Brundtland Report. Often is appears to mean little more than that the corporation will continue to exist in the future. Our argument is not just that this focus upon such a vague notion of sustainability is misleading and obfuscates the need for a rigorous debate about the meaning of sustainability. Our argument is that this treatment of sustainability is actually disingenuous and disguises the very real advantages that corporations obtain by creating such a semiotic of sustainability (Aras and Crowther, 2008b, p.284).

2.2 The Concept of Sustainable Development

Sustainable Development is a controversial concept because of its different meanings but an important one to businesses, communities, and societies. The birth of sustainable development can be traced to the World Commission on Environment and Development (WCED) report (1987), "Our Common Future" (Morvaridi, 1996). In the report, sustainable development was defined as a state in which the needs of the present are met without compromising the ability of future generations to meet their own needs. The report stressed the interdependence of economic growth, the environment quality, and that without a healthy economic environment activity, let alone growth is threatened (Ibid). Morvaridi emphasized on the common elements or criteria found in most definition of sustainable development which formed multi-disciplinary approach: concern for economic and social viability of future generations' intergenerational equity; alleviation of poverty, concern for social welfare; local participation in planning and execution of development projects; and positive impacts on environment and resource use (Ibid).

Pickering and Owen (1997) posited that the International Union for Conservation of Nature first present the idea of sustainable development at an International forum of the World Conservation Strategies in 1980. They stated that sustainable development in essence invokes present development of available resources without compromising the ability of future generations to meet their needs (WCED report, 1987). They posited further that many people would argue that this is an abstract idea that is not possible to achieve by asking this question; how can this generation understand the needs of future generations, even before they have been born, let alone future needs before they have been formulated? To this end, they suggested that the practical application of sustainable development should involve greater environment awareness by both government and individuals.

Aras and Crowther (2008b) defined sustainable development as a development that attempts to bridge the divide between economic growth and environmental protection, while taking into account other issues traditionally associated with development. It seeks to develop the means of supporting economic growth while supporting biodiversity, relieving poverty and without using up natural capital in the short term (Daly, 1999) at the expense of long-term development. They stressed that indeed there is a growing consensus that firms and governments in partnership should accept moral responsibility for social welfare and for promoting individuals' interest in economic transactions (Amba-Rao, 1993). Aras and Crowther (2008b, p. 281) stated that there is a confusion surrounding the concept of sustainability because for the purist sustainability implies nothing more than stasis (the ability to continue in an unchanged manner) but often it is taken to imply development in sustainable manner (Hart and Milstein, 2003; Marsden, 2000) and the terms sustainability and sustainable development are for many viewed as synonymous. They pointed out that as far as corporate sustainability is concerned, the term sustainable has been used in the management literature over the last 30 years (see Reed and DeFillippi, 1990) to merely imply continuity. They stressed further that an almost unquestioned assumption is that growth remains possible (Elliott, 2005) and therefore sustainability and sustainable development are synonymous.

"Sustainable development is the leading concept of our days embracing economic, social, and environmental dimensions (Brundtland 1987). The measuring and management of this process is a difficult task because the concept varies, depending on the changing conditions of life. The measurement of social and economic development of a country is a complex phenomenon, which is described by a set of criteria (Podvezko, 2008). Many international institutions presented the assessment systems of indicators to measure the sustainability around the world. Despite the main pillars, classifications and sets of indicators differ across various institutions" (LapinskienÄ- and TvaronavičienÄ- 2009, p.205)

Dennis R.C (2008) noted that the developed world has experienced an unprecedented growth in its standard of living at a high cost to the environment with confusion about the true purpose of growth which is not merely to acquire wealth and power, but as far as possible, to have the potential for a life worth living for each community person and businesses. He suggested that to rectify the situation, sustainability must be aggressively pursued by individuals, businesses, and federal, state, and local governments, and a new eco-economy paradigm of ecological, social welfare capitalism adopted and promulgated by government, private property owners including businesses, and all other community citizens. He suggested further that this new paradigm would stress sustainability in general which in turn will require sustainable cities in particular.

2.3 Theoretical Framework

The dissertation used Structural-functionalism to view the relationship that exist among these factors; CSR, sustainable development, and marketing. Since people agreed that outputs of one sub-system become the inputs of the others and each sub-system operates in an environment which included each of the other sub-systems. The impression of academic scholars toward companies CSR contribution (like ISS UK) is either for marketing (brand-image promotion) or for sustainable environmental development.

The structural-functionalism is a notion of system maintenance which can be equated with equilibrium by Parsons. Parsons (1967) believed in existence of the political system of four basic functions: adaptation, goal attainment, integration, and pattern maintenance. He stated that each of these basic functions was carried out by four analytic sub-systems: social, cultural, personality, and behavioural organism. He stressed that these functions (collectively) are the necessary pre-requisites for the maintenance of any society. Society according to Parsons consisted of four basic structures (sub-systems): economy, polity, law and social control, and cultural and motivational commitments.

The structural-functionalism according Easton is known as System analysis from the concept of Input-Output analysis. Easton (1965) claimed to be using the term "System" in different way from the behavioural scientists. He interprets system as a complex organised form of behavioural through which something gets done and as an active set of relationships, not just as a collection of parts that interact with each other. System analysis is concern about the work that a system does and how is does that work. The initial emphasis is not on parts of the system and interactions but on identifying the work the system does; what flow through the system, how it is transformed by the system, what comes out of the system, and the necessary materials needed by the system to be able to produce these results.

The structural-functionalism according to Almond is known as Interdependence. Almond (1991) believed that various sub-sets of the system are closely connected with each other that a change in one sub-set produces a change in all the other sub-sets and was related to input-output functions. The input functions are performed by non-governmental sub-systems; the society and the general environment, while the output functions are performed by the government. Almond used seven-variable list of functional categories which four of these are input functions: political socialization and recruitment, interest-articulation, interest-aggregation, and political communication; and the remaining three are output functions: rule-making, rule-application, and rule-adjudication.

What the dissertation is primarily interested in the structural-functionalism are two things: to check relationship between CSR contribution of ISS UK and marketing (brand-image promotion), and CSR contribution of ISS UK and sustainable development. Since structural-functionalism was based on certain assumptions and interpretations of historical facts which the authors (Parsons 1967, Easton 1965, and Almond 1991) do not prove, or try to prove, and perhaps cannot be proved. Therefore, it may not be adequate to accept in absolute terms the relationship between CSR contribution of ISS UK as a marketing tool (brand-image promotion) and CSR contribution of ISS UK as a tool toward sustainable development.

The only fact is that ISS UK is a sub-system of a system in an environment which includes each of the other sub-systems (stakeholders: employees, customers, suppliers, business-partners, pressure-groups, business-community, and government). Outputs of ISS UK are the services rendered to their clients and their CSR contribution which become inputs to their stakeholders. The process and the application of their CSR contribution will determine if it is for marketing purpose or for sustainable development. The outputs of ISS UK is the supply-side of an equation while the satisfaction from all the stakeholders represent the demand-side which must be viewed equally important elements in both brand-image-promotion and sustainable development process. Any attempt by ISS UK not to provide satisfactory services to their clients and not to make enough CSR contribution to the system, it will definitely affect the whole system by decline in sustainable environmental development and give a bad image to ISS UK.

3.0 Research Methodology

The focus of this dissertation is to analyse the influence of ISS UK CSR contribution on its brand-image promotion (which have impact on financial performance), and its impact towards sustainable development. There are two measures of firm's financial performance: those that measure the firm's market performance; and those that measure the firm's accounting performance (Luo and Bhattacharya, 2006 and Waddock and Graves, 1997). Still, there are some researchers that used combination of both accounting and market performance measures (McGuire, Sundgren, and Schneeweis, 1988). This work will be based on research similar in nature to Leonard and Parsa (2009). Other International rating indexes (like KLD, DJ, FTSE etc.) will be assessed too to check for important factor(s) missing in Leonard and Parsa Model.

3.1 The Model's Dimension

Leonard and Parsa (2009) proposed a parsimonious model that can be used to simultaneously assess a company's CSR performance and its financial performance. The fundamental premise attached to the model is that organisations can be ranked and classified based on both their financial performance relative to industry standards as well as its social value as indicated by societal perceptions in combination with the organisation's observed practice of social initiatives. This model simplified the complex issues of a company's Corporate Social Responsibility and its financial performance (figure2).

The model indicates that the horizontal axis represents the firm's performance on financial initiatives and the vertical axis represents its performance on social initiatives (figure2). The model includes four matrix quadrants into which an organisation is placed. The model can be viewed to equate an organisation's balance sheet at a point in time because it reflects the organisation's performance. However, an organisation's performance and its position on the quadrant can change over time because its position will be based on its most current financial and CSR performance assessment. Therefore, the matrix may also be viewed as an organisation's current financial and social scorecard.

The model indicates that an organisation can fall into one of the model four quadrants based on their CSR (social initiatives) and financial performance scores. An organisation can be viewed to be ideally balanced when it creates shareholder values and at the same time is perceived being socially responsible. The quadrants in the model are colour coded to represent the various positions or states that an organisation will fall into. An organisation will fall on black or the "Aggressive" quadrant if it pursue purely financial initiatives and performs well on those initiatives. If an organisation is a non profit entity and pursue purely social responsibility initiatives, then this organisation will be regarded as purely green or placed in the "Green" quadrant. Organisation that performed well both on social responsibility and financial initiatives will fall into blue or "Progressive" quadrant while organisation that underperform on both social responsibility and financial initiatives will fall into yellow or "Repressive" quadrant (figure2).

3.1.1 Assessment of Financial Performance

The financial performance of an organisation will be assessed from accounting perspective. The assessment is on examination of the organisation's balance sheet, its statement of cash flow and income statement. The balance sheet will provide information on overall value of the organisation's assets, liabilities, its owner's equity, or net worth. The statement of cash flow will provide information about the organisation's sources and uses of cash while income statement will give us the overall profitability of the organisation. The information from the three sources is then compared to industry benchmarks as well as the leader in that segment of the industry. If organisation over-perform the stated benchmarks, it receives favourable score but on the other hand, if organisation under-perform, it receives unfavourable score. It is very important to note that since ratios will be used, and to avoid being biased, the comparison is made between organisations that are in the same business line (segment) but not across the business sectors, and also, it should be assessed for a period of at least five years to ascertain any trends or pattern. The model proposes that the standard measures of financial performance should be grouped into five categories [appendix-table1]: 1) profitability (profit margin, operating efficiency, return on asset, return on equity, earning per share and net income), 2) liquidity (current ratio, working capital turnover, account receivable and turnover), 3) solvency (solvency ratio, debt-equity ratio, equity/asset ratio and debt/asset ratio), 4) financial efficiency (asset turnover ratio, operating expense ratio, depreciation expense ratio, interest expense ratio and net income from operations ratio), 5) repayment capacity (debt and capital lease coverage ratio and capital lease replacement and term debt repayment margin).

3.1.2 Assessment of CSR Performance

The CSR performance of an organisation will be assessed on its CSR initiatives. The model proposes that organisation should be evaluated on its commitment to CSR or social activities and grouped the assessment into five dimensions [appendix-table2]: 1) community involvement, 2) employee, 3) environmental sustainability initiatives, 4) fair corporate governance and 5) involvement or lack thereof in controversial business practices. The premise behind this model is that a well balanced organisation with good CSR initiatives would perform exceptionally on each of the five dimensions. The evaluation of organisation on these five dimensions will be based on both secondary data and direct interviews with the organisation's representatives relating to these dimensions (primary data). The model proposes that the assessment of the organisation on these dimensions should cover a period of five years. However, these dimensions will be evaluated to ascertain both positive aspect and negative aspect of these dimensions. In addition, the model proposes that the organisation should be awarded points for positive efforts and points should be subtracted for negative efforts on these dimensions. Moreover, the model proposes that organisation can only receive a maximum total of 20 points on each dimension with a grand total of 100 points (on all the dimensions). In addition, organisation that has been ranked by any recognised institution for CSR initiatives such as green or social ranking should receive pre-specified amount of points [table2].

3.2 Measurement Instrument

The objectives of this project will be achieved by collection of data from the Representatives of ISS UK and information posted on its website relating to financial reports and CSR contribution for a specific period of five years in line with Leonard and Parsa (2009) proposed model. Questionnaires will be administered to staff of ISS UK and selected stakeholders for spe­cific information regarding their perception on the company's CSR contribution (this will represent societal view on the company). The total of 350 questionnaires will be randomly distributed to available stakeholders [top and middle managers (50), employees (50), clients (50), suppliers (50), business-partner (50), business-community (50), pressure-group (50)]. The data will be used to construct statistical model [simple regression analysis] to test for research hypothesis and analyse other important issues that might arise during course of the study (using descriptive statistics). The simple regression analysis will show the relationship between financial performance of ISS UK and their CSR contribution.

3.3 Limitations and Suggestions for Further Research

The first limitation to this model is that it does not explain the causal mechanisms that link or exist between CSR initiatives and financial performance of an organisation. Bhaskar (1989) argued that we will only be able to understand what is going on in social world if we understand the social structures that have given rise to the phenomena that we are trying to understand and what we see is only part of the bigger picture. Secondly, the model relies more on information from past practices which may not be an indication nor provide insights about the future direction or performance of the organisation. Thirdly, the model uses subjective analysis which could be prone to subjectivity bias since it uses information prepared or disclosed by the organisation. The organisation's annual reports are audited and attested to for accuracy but CSR initiatives or data revealed by organisation can be either under or over reported and which are not usually verified by external entity(s). In this context, the model is developed with the assumption that all financial records used are accurate and reliable, and CSR initiatives disclosed by the organisation are accurate, precise, and honest. If any of the information is not accurate (either financial records or CSR initiative reports), it could skew the overall placement of an organisation on the matrix quadrant of the model.

Caution needs to be exercised in comparison in term of age for the organisations involved. It is widely conceive that organisations that have existed in a business for a long period of time may have sound financial position than a new organisation in the business. In spite of the model's limitations, it is an excellent conceptual beginning point for empirical investigations. The proposed model by Leonard and Parsa deserves empirical investigation for its applicability in service industries.


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