In the course of China's rise to a significant player in the global economy, concerns are voiced regarding individual Chinese companies' irresponsible behaviors among the international communities, resulting in the Chinese government's introduction of strict regulations on social responsibility for companies operating in China. However, due to the decisive government interventions, further potential underlying reasons for Chinese companies' corporate social responsibility (CSR) involvement remain uncertain.
The goal of this thesis is to provide insights about CSR and its key drivers and the potential effects of CSR on Chinese companies' performances as well as to offer recommendations for managers of companies in China. The thesis first addressed CSR development in the US and in China by using relevant literature. The results of the literature review showed that legal requirements, government influence, and financial profitability were key drivers for both US and Chinese companies, and CSR had a positive impact on firm performance in both countries. Subsequently, eight semi-structured key informant interviews were conducted. The selected informants were all upper-level managers in their respective companies who were aware of China's CSR strategy and were performing related practices in their firms. The interview results indicated that while legal requirements and government involvement were still the driving forces behind companies' CSR implementation in China, financial profitability is an additional predominant factor for companies' decision-makers. Furthermore, both theoretical and empirical insights displayed a positive relationship between CSR and corporate social and economic performance, indicating that CSR practices benefit both companies and society.
Table of Contents
1 Introduction
1.1 Relevance of the topic
1.2 Problem statement and purpose of the thesis
1.3 Terminology
1.3.1 Definition of CSR
1.3.2 CSR and business ethics
1.3.3 Company performance in context of CSR
1.4 Structure and approach of the thesis
2 Literature review
2.1 Selection criteria of literature
2.2 Corporate Social Responsibility
2.2.1 Theoretical frameworks
2.2.2 CSR reporting and standards
2.3 CSR development in the US
2.3.1 CSR regulations in the US
2.3.2 Perception of CSR in the US
2.3.3 Drivers of US companies’ CSR implementation
2.3.4 Impacts of CSR on US companies’ performance
2.4 CSR development in China
2.4.1 CSR regulations in China
2.4.2 Perception of CSR in China
2.4.3 Drivers of Chinese companies’ CSR implementation
2.4.4 CSR development in China
2.5 Intermediate results
3 Methodology
3.1 Research approach
3.2 Research design and strategies
3.3 Data collection and sample selection
3.4 Limitations and solutions
3.5 Interview design and analysis
3.5.1 Interview design and analysis
3.5.2 Classification of interview questions
4 Empirical findings
4.1 Interpretation of CSR
4.1.1 Personal understanding of CSR
4.1.2 Personal understanding of CSR
4.2 Implementation of CSR and key drivers
4.2.1 CSR projects and reasons for selection
4.2.2 Managerial roles and techniques
4.2.3 CSR reporting and measurement
4.2.4 Challenges of CSR implementation
4.2.5 Key drivers of companies’ CSR implementation
4.3 Impacts of CSR implementation on corporate performance
4.3.1 Expected and actual benefits from performing CSR
4.3.2 Impact on company performance and the larger environment
4.4 Summary of interview findings
5 Discussion, implementation, recommendation
5.1 Comparison of literature review results and selected empirical findings
5.2 Answers to the research questions
5.3 Recommendations
5.4 Limitations and future research
6 Conclusion
Research Objectives and Themes
The goal of this thesis is to examine Corporate Social Responsibility (CSR) in the context of China, specifically focusing on the key drivers that motivate companies to implement CSR and assessing its impact on overall company performance. The study aims to provide practical insights and recommendations for managers operating in China by comparing findings from a literature review with primary qualitative data.
- Analysis of extrinsic and intrinsic drivers of CSR implementation in Chinese enterprises.
- Evaluation of the relationship between CSR engagement and corporate financial and social performance (CFP and CSP).
- Comparison of CSR development, perception, and regulatory environments between the US and China.
- Examination of the role of government, cultural values (Confucianism), and management motivation in shaping Chinese CSR practices.
Excerpt from the Book
1. Introduction
As the country ranked second in terms of gross domestic product (GDP) and with the largest population worldwide in 2019, the People’s Republic of China has caught global attention and improved its status among international communities (Liao, Lin, & Zhang, 2018; Urmersbach, 2020). Since the 1970s, an increasing number of Western corporations, namely multinational enterprises (MNE), have either moved production sites to or are headquartered in China due to cheaper labor costs and looser regulatory restrictions (Miska, Witt, & Stahl, 2016). While Chinese economic development has undergone exponential growth within the three decades, public concerns regarding Chinese businesses’ ethical behaviors have increased in domestic and international contexts.
In 2008, a scandal of a Chinese infant formula manufacturer had stirred up heated discussions among the Chinese media and society, which triggered the Chinese government to enact stricter rules and requirements on the scope of social responsibility of Chinese companies (Zhu & Zhang, 2015). The Sanlu Group was among the most famous producers for infant formulas in China until the news revealed Sanlu’s usage of melamine, a chemical for industrial use, in infant formulas. Consequently, more than 300,000 infants and young children were diagnosed with kidney-related health issues and got hospitalized in the same year. The incident led to the bankruptcy of the Sanlu Group and its suppliers on a large scale, damaged young consumers’ health, and disrupted Chinese customers’ trust in other manufacturers in the food industry (Zheng, Luo, & Wang, 2014). The fraud demolished Chinese companies’ reputations, and the credibility of Chinese enterprises, as well as the quality of products manufactured in the country, were doubted. As a result, the scandalous event has raised the Chinese government’s awareness and catalyzed its intervention in Chinese enterprises’ corporate social responsibility (CSR). The topic of CSR in China has further stimulated the interest of Chinese companies’ management boards (Zhang & Rezaee, 2009).
Summary of Chapters
1 Introduction: Provides the context of economic growth in China, the rise of public concerns regarding business ethics after scandals, and defines the core terminology.
2 Literature review: Analyzes theoretical frameworks, compares CSR development in the US and China, and identifies key drivers and performance impacts based on existing academic research.
3 Methodology: Details the qualitative research approach, specifically the use of semi-structured interviews with experts to gather data on CSR practices in Chinese firms.
4 Empirical findings: Presents and interprets the data gathered from interviews with eight managers, covering their understanding of CSR, implementation practices, and perceived benefits.
5 Discussion, implementation, recommendation: Synthesizes the literature review and empirical findings to answer the research questions and offers actionable advice for managers in China.
6 Conclusion: Summarizes the thesis, highlighting the mandatory and government-driven nature of CSR in China compared to Western voluntary approaches.
Keywords
Corporate Social Responsibility, CSR, China, Corporate Financial Performance, Stakeholder Theory, Confucianism, Government Regulations, SOE, Private Enterprises, Business Ethics, Sustainability, Triple Bottom Line, Corporate Governance, Management, Employee Retention
Frequently Asked Questions
What is the core focus of this thesis?
This thesis investigates the drivers behind the implementation of Corporate Social Responsibility (CSR) in Chinese companies and evaluates how these CSR practices affect the overall performance of the firms.
What are the primary themes discussed?
The main themes include the historical development of CSR in China, the influence of political and cultural factors (like Confucianism), the role of government regulations, and the measurable impact on corporate financial and social performance.
What is the primary objective or research question?
The study aims to identify the key factors driving CSR in China and determine how CSR implementation influences company performance, specifically answering two questions regarding the motivation for initiating programs and the nature of the relationship between CSR and performance.
Which scientific method is employed?
The research uses a qualitative approach, conducting semi-structured, in-depth interviews with eight upper-level managers and executives from diverse Chinese enterprises (both state-owned and private).
What is covered in the main body of the work?
The work includes an extensive literature review comparing Western (US) and Chinese CSR concepts, followed by an empirical section presenting findings from interviews, which are then analyzed against theoretical frameworks in the discussion section.
What characterises the study's keywords?
The study is defined by terms linking Chinese economic policy, corporate management, stakeholder expectations, and the specific dynamics between state-owned enterprises and social performance metrics.
How does the Chinese government influence CSR implementation?
The thesis finds that the government is the dominant force, having mandated CSR through the 2006 Company Law, and actively promoting it through policies and incentives to align companies with national goals.
How does Confucian philosophy impact CSR in China?
Confucianism is identified as a deep-rooted cultural influence that emphasizes ethical behavior and social harmony, leading many Chinese managers to perceive CSR as a moral obligation alongside legal compliance.
What is the relationship between CSR and financial performance in Chinese firms?
Empirical evidence in the study suggests a generally positive relationship between CSR and financial outcomes, creating a virtuous cycle where better CSR leads to reputation and financial gains, which in turn fund further CSR.
- Quote paper
- Li-en Lin (Author), 2020, Corporate Social Responsibility in China: Analysis of Key Drivers for the Implementation of CSR and Assessment of the Impacts on Company Performance, Munich, GRIN Verlag, https://www.grin.com/document/1010308
