Most organisations can only have a rhetorical commitment to Corporate Social Responsibility

CONTENT

Introduction

I. Three main perspectives on organisations' responsibilities
The shareholder perspective
The stakeholder perspective
The society perspective

II. CSR in organisations: Rhetorical or real commitment
Drivers of CSR popularity
Real versus rhetoric CSR

III. Explanation of gap between communication and Implementation of CSR
Lack of capital/investment
Lack of external punishment/pressure

Conclusion

References

Appendices

INTRODUCTION

"[I]t remains a fact that many business leaders still only pay lip service to CSR, or are merely reacting to peer pressure by introducing it into their organisations. A smaller number have an inherent sense that it is ‘the right thing to do’ and feel committed to it. Fewer still are convinced about the business benefits and have embedded it throughout their organisations" (Bevan et al. 2004:4).

To shed light on the hypothesis that most organisations can only have a rhetorical commitment to Corporate Social Responsibility (CSR) and hence to further explore the above citation is the aim of this essay. In order to do so, the analysis is organized in three chapters: Firstly, three different, alternative perspectives on organizations' responsibilities in general are examined, concluding that there is potential divergence on whether social aspects have to be considered as key elements for organizations. Secondly, the essay argues that some perspectives potentially conflict with the steep increase of CSR popularity during the past decades and defines real and rhetoric CSR commitment accordingly. Thirdly, rhetoric CSR as a gap between communication and implementation of CSR is decomposed into fixed and variable (economic cycle dependent) effects. The essay concludes with verifying the initial hypothesis especially for periods of economic downturns and emphasising the importance of further empirical research to better measure and fully grasp the implications of CSR nowadays.

I. THREE MAIN PERSPECTIVES ON ORGANISATIONS' RESPONSIBILITIES

Although the relationship between business and society is a recurring theme throughout the centuries, a wide spectrum of (controversial) opinions on how it should look like exists (Snider, Hill, Martin 2003). As early as 1973 Davis noticed that "[t]here are many reasons for and against business's assumption of social responsibility. Because of the increasing amount of rhetoric which exists on this subject, it is appropriate to examine this reasons thoughtfully when making choices in this area" (1973:312). Since the argumentation about CSR differs with shareholder, stakeholder and society perspectives, a brief comparison of those perspectives prior to evaluating CSR's nature seems crucial.

The shareholder perspective

This perspective is anchored in the economic and legal responsibilities firms owe to their owners. The economist Milton Friedman, the most outspoken proponent of this view, argued in 1962 that “[f]ew trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible" (1962:133). The dominant logic behind it derives from classical economic doctrine of a free market introduced by Adam Smith's proposition that "by pursuing his own interest he (every individual) frequently promotes that of society more effectively than when he really intends to promote it" (1776:423). Thus, a self-seeking human being that acts independently from others and has no incentive to strive for ethical or responsible behavior is pictured. Amaeshi & Adi stress that this perspective on organisations "has no place for emotions, feelings and benevolence" (2007:6) and hence the organisation's responsibility is limited to their shareholders' interest of profit maximization.

The stakeholder perspective

In the 1970s organizations' responsibilities have broadened due to social legislation creating e.g., in the US the Environmental Protection Agency, the Equal Employment Commission, the Occupational Safety and Health Administration, and the Consumer Product Safety Commission. These new governmental bodies make national policy since then officially recognize that the environment, employees, and consumers are significant and legitimate stakeholders (Carroll 1991). As originally defined by Freeman (1984:46), "a shareholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization's objectives." Carroll stresses that "the concept of stakeholder personalizes social or societal responsibilities by delineating the specific groups or persons business should consider in its CSR orientation" (1991:43). Who is perceived as a stakeholder depends on the specific organisation but the groups in exhibit 1 shown below are generally included. Amaeshi & Adi define an organisation's responsibility in this regard as a "commitment to operate in an economically and environmentally sustainable manner while recognizing the interests of its stakeholders" (2007:6). Arguing that also holding responsibility for stakeholders leads in the end of the day (long-term) to self-seeking profit maximization of organisations only the following third perspective is regarded as incorporating a real "social dimension".

STAKEHOLDER LANDSCAPE ILLUSTRATIVE

An organization has to balance different, often controversial interests of its manifold stakeholders

Abbildung in dieser Leseprobe nicht enthalten

Source: Donaldson & Preston, 1995:69.

The society perspective

The pioneering idea of CSR is reflected in the broadest and most abstract perspective: the society or corporate philanthropic perspective. Wulfson (2001:136) defines the philanthropists' believes that "he has a moral duty towards helping the less-fortunate in a society through charitable distribution of earnings". This moral argument for CSR is grounded in the assumption that successful corporations are dependent on a healthy society and vice versa. A large part of any success an organisation scores, is as much due to the context in which it operates as factors internal to the organisation alone and therefore there is the assumption of "a need to give something back." Corporations need a good government, property rights, a functioning infrastructure and the rule of law as essentials for innovation and efficiency. Furthermore, depending on a productive workforce they need a functioning society fostering education, health care, and equal opportunities. Additionally, to increase their productivity the efficient and sustainable utilization of natural resources is crucial (Kramer and Porter 2006).

In conclusion, the perspective an organisation holds regarding its responsibilities has huge implications for its CSR commitment depending whether it stretches or can stretch the acceptance of responsibilities beyond its primary role as an economic institution by adopting a "social dimension".

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