The Analysis of the Contested Nature of Corporate Social Responsibility - Essay Example

? Corporate Social Responsibility A) Explain why Corporate Social Responsibility is such a contested concept. The analysis of the contested nature of corporate social responsibility (CSR) encompasses several observations, factors and aspects that have been assessed by researchers to comprehend the exact nature of the concept and how it impacts the operations of modern organizations with respect to the dynamics of today’s business landscape. Babiak (2013, p.35) understands that the contested nature of CSR has not only emerged as a consequence of the variations in policies, procedures and frameworks that are adopted by organizations to advance their objectives. In fact the wider disagreements regarding the notion of CSR stem from the foundations of the concept itself which essentially includes its definition, meaning and importance for today’s businesses. An intriguing observation regarding the ongoing debate about CSR reveals that the concept has been a topic of discussion for the past 75 years (Babiak 2013; p.35). This view postulates that scholars and analysts are yet to discover common ground on the concept which establishes the fact that corporate social responsibility still poses several questions and dilemmas which are yet to be resolved. Drawing from this understanding, the purpose of this essay is to analyze the factors and reasons which contribute towards the establishment of CSR as a contested concept. As stated previously, the contestability of the notion not only exists in the implementation and execution of the concept but is also observable in its foundations such as its meanings, significance and definitions. Henceforth, the scope of this essay focuses on the practice of CSR in its entirety and why the notion is termed as a contested concept. Okoye (2009; p.613) focuses on the theoretical aspect of CSR by stating that the presence of contestation with respect to the topics in social sciences is not uncommon, moreover, the vast nature of the notion asserts that limiting the application or comprehensions of the topic is also impractical because the concept can be identified as an ECC or an essentially contested concept. The fundamental explication of the contestability of the concept poses the question of what CSR means to a business. For example, while one organization may perceive the provisions of the concept in terms of its legal implications or liabilities, other businesses may view the stipulations of the concept in terms of ethical obligations or simply associate CSR with measures such as charity, donations and philanthropic efforts (Okoye 2009; p.613). The aforementioned example can be examined on the basis of the continuum of social responsibility strategies which outlines the degree of social responsibility on a scale of low to high. In accordance with this continuum the contestability of CSR can be comprehended by conducting a comparison between accommodation and proaction such that companies which initiate CSR strategies as a response to external forces supposedly perceive the concept as a legal obligation in accordance with the view presented by Okoye (2009; p.613) while, businesses following the strategy of proaction take the initiative of adopting a comprehensive framework of CSR by viewing the concept as a comprehensive measure which encompasses legal, social and ethical responsibility. The observations of this discussion are also reflected in the research which has been conducted by Shamir (2004; p.635) whose examination of the voluntary and self-reliant models of CSR provides a guideline for analyzing the factors which have contributed towards the establishment of CSR as a contested concept. Shamir (2004; p.635) understands that corporate actions for defining corporate social responsibility in recent years has been marked by a relentless effort “…to shape the notion of and practice of CSR as an essentially voluntary and nonenforceable issue.” This view postulates that organizations today hold the ability of transforming and developing CSR in accordance with their requirements and this consideration is a key contributor which has caused corporate social responsibility to evolve as a contested concept. The notions of voluntary and self-reliant initiatives of CSR are essentially associated with various theories of ethics that are known to play a critical role in designing a company’s policies and procedures to guide the course of its actions in the future. An example of this observation is that of the concept of egoism which represents voluntary CSR practices that are undertaken by an organization for safeguarding its short term and long term objectives. Brejning (2012; p.30) comments that the varying perceptions and explanations of CSR cannot be limited to organizational settings and applications and the depth of this concept entails that its observations hold equal applicability within a national context. Brejning (2012; p.30) invites the notion of stakeholder conflicts in this argument by stating that nations which seemingly abide by a consistent CSR policy may portray conditions which are often misleading because CSR stakeholders are bound to come into conflict when invited to offer their opinions on their expectations from the organization and their perceptions of its CSR frameworks. As displayed previously by the utilization of the continuum of social responsibility strategies, the discourses on CSR can be elaborated upon by undertaking similar approaches to display the reasons why the concept is termed as contested. Brejning (2012; p.31) identifies the ‘conservative CSR discourse’ which fundamentally discards the notion of CSR and the concepts which are associated with it. Consequently, all stakeholders which advocate the stipulations of the ‘conservative CSR discourse’ do not recognize the provisions of the notion by limiting the duties of a business to the fulfillment of its financial responsibilities and the advancement of its economic objectives. For Crane (2008; p.202), this notion is reflective of the views of neoclassical economist Milton Friedman who specifically outlined an organization’s responsibility towards its shareholders by engaging in operations that aim to advance the corporate objective of profit-maximization to provide the owners of the company with a fruitful return on their investment. This belief of Friedman’s is best defined in the statement which asserts that “the business of business is business” (Brejning 2012; p.31). The adoption of a continuum approach which highlights the factors that have led to the development of CSR as a contested concept further expounds upon the ‘liberal CSR discourse’ which takes into account the benefits that can be achieved by a business by initiating corporate social responsibility policies. Brejning (2012; p.32) notes that there are several advantages that can be enjoyed by a business through the implementation of corporate social responsibility. These advantages include the amplification of an organization’s brand image, the enhancement of an organization’s ability to draw the attention of potential employees, development of relationships between the management and employees, promotion of innovation, ideas and creativity within the organization and the achievement of overall efficiency (Brejning 2012; p.32). Consequently, empirical studies have also discovered a positive correlation between corporate social responsibility initiatives and corporate reputation (Brejning 2012; p.32). Brejning (2012; p.32) understands that the recommendations of the ‘liberal CSR discourse’ has emerged from the outcomes and findings of researches that have been conducted on the stakeholder theory. In its purest form, the stakeholder theory recommends that an organization is as much accountable to its stakeholders as much it is accountable to its shareholders or owners. Therefore, the stakeholder theory commands the fulfillment of multi-fiduciary duties rather than single fiduciary duties. Furthermore, the stakeholder theory recognizes the stakeholders of the firm as the government, competitors, shareholders, suppliers, civil society, employees, customers and competitors as these groups display an indirect interest in the activities of the business. Amaeshi et al. (2013; p.8) have adopted an alternative approach to explain the factors which define the contested nature of corporate social responsibility. The authors present multiple interpretations of the notion as the primary focus of their discussion by highlighting numerous researches that have been conducted by various writers. This discussion essentially refers to the observation which states that CSR is the formulation of several underlying concepts such as business ethics, and morality, corporate citizenship, corporate governance, human rights, sustainability and stakeholder engagement amongst others (Amaeshi et al. 2013; p.8). Owing to this observation it can be stated that the multifaceted nature of the notion governs how corporations, organizations and businesses across the globe choose to shape CSR in accordance with their requirements and the interpretations and expectations of their stakeholders as per the recommendations of the stakeholder theory which is one of the many reasons why the notion is highly contested by and debated amongst executives, managers, analysts, researchers and authors alike. The evaluation of the preceding examination is indicative of the reasons why corporate social responsibility is viewed as a contested concept. This observation can be comprehended by the adoption of a continuum approach which outlines the varying degrees of CSR that are initiated by companies in accordance with a conservative or liberal discourse, the latter of which puts forth the business case for CSR by highlighting the advantages of the concept to companies. Furthermore, the multiple interpretations of CSR which include several concepts that are associated with the notion outline the concepts which govern the CSR policies of companies and the ways through which the CSR ideologies of organizations are shaped. Consequently, cultural implications also define the functioning of the stakeholder theory and dictate how the perceptions of stakeholders are shaped in a national rather than an organizational setting. B) How would you convince a large business organisation of your choice that it should identify and adopt ‘good practice’ in areas of Corporate Social Responsibility? British American Tobacco (BAT) emerged as the first tobacco company across the globe which developed a full-fledged CSR report to provide its stakeholders with an overview of the procedures, frameworks and policies that it implemented for the purposes of fulfilling the designated corporate social responsibility goals that were set by the company’s management. However, the fundamental question that has arisen as a consequence of this action has led the general public to believe that the adoption of CSR practices by an organization which operates in the tobacco industry presents a conflict in itself. Even though, the initiatives that have been undertaken by British American Tobacco (BAT) in the field of CSR such as the establishment of a CSR committee appear to be comprehensive in nature, analysts have been able to identify a misalignment in the identification and adoption of ‘good practice’ in several areas of corporate social responsibility by the organization. Accordingly, this notion postulates that the coverage of CSR policies that have been undertaken by British American Tobacco can be deemed to be limited in scope. This observation is understood to be a consequence CSR and stakeholder related challenges that are being faced by the organization. Henceforth, the purpose of this essay is to present pertinent arguments to convince the management at British American Tobacco (BAT) to enhance the adoption of ‘good practice’ in the organization by discovering relevant aspects with respect to the notion of corporate social responsibility. According to Barraclough and Morrow (2008; p.1784) the CSR procedures of British American Tobacco comprise of several initiatives that encompass the development of programs, frameworks, campaigns and the initiation of charity drives. Consequently, such practices that have been adopted by British American Tobacco are applied on a global scale in countries such as Malaysia and India (Quinn et al. 2011; p.107) and China (Lee, Collin and Gilmore 2000; p.88) owing to the nature of the operations of British American Tobacco that are based on a multinational scale. The foremost observation that is addressed in the essay however, is associated with the limitations of British American Tobacco’s corporate responsibility program in various areas of the field that has emerged as a consequence of CSR and stakeholder related challenges. Conley and Williams (2005; p.31) highlight the varying perceptions of CSR that are held by NGOs and members of the corporate world by presenting the example of the CSR practice that is advanced by British American Tobacco. It is argued that good practice in the sphere of CSR which is promoted by British American Tobacco is marked by contestability rather than accountability while the opposite observation holds truth for the NGOs’ interpretation of the notion of CSR. Palazzo and Richter (2005; p.387) state that the display of tobacco companies such as British American Tobacco as good corporate citizens has met with severe criticism by NGOs as well as the World Health Organization (WHO). These criticisms stem from the ideology which is doubtful of the ways through which tobacco companies can display ‘good practice’ in areas of CSR owing to the nature and type of their product and operations. Palazzo and Richter (2005; p.387) understand that recent initiatives by tobacco companies under the banner of corporate social responsibility have proved to be ineffective. These measures include CSR reporting and stakeholder collaboration amongst other initiatives. The researchers therefore, propose that “…tobacco companies can only operate on a transactional level” (Palazzo and Richter 2005; p.387) which is why British American Tobacco must favor a transactional approach over a transformational one in the execution of its CSR policies by identifying areas of good corporate citizenship such as the development of the tobacco supply chain. The evaluation of the aforementioned analysis is also evidenced by the research which has been conducted by Otanez et al. (2006; p.224) who have appraised the operations of British American Tobacco’s corporate social responsibility project for eliminating child labor in the tobacco industry of Malawi. Otanez et al. (2006; p.224) claim that the project has not been able to yield practical results for the children of Malawi and has favored the advancement of BAT’s corporate reputation instead. This implication coincides with the findings of Palazzo and Richter (2005) who assert that tobacco companies should participate in transactional CSR rather than transformational CSR to prove good corporate citizenship. As stated by Conley and Williams (2005; p.31) British American Tobacco has been critical of the methods that are adopted by NGOs for the purpose of CSR reporting, this notion is echoed in the views of company representatives who believe that the NGOs’ perceptions of CSR focuses more on accountability rather than contestability. Belal (2008; p.72) understands that British American Tobacco’s CSR reporting in developing nations is primarily focused on the aspects of enhancing and promoting corporate reputation rather than advancing transparency and accountability amongst organizations. The identification of this observation presents another area of corporate social responsibility in which British American Tobacco can improve. The analysis and discussion which has been presented in this essay has been able to discover primary areas of corporate social responsibility that are believed to be of utmost importance for British American Tobacco. Consequently, these aspects are understood to be areas where the organization can promote ‘good practice’ of corporate social responsibility. Accordingly, the greatest stakeholder challenge that British American Tobacco currently faces is being posed by various anti-tobacco agencies, NGOs and the World Health Organization. Empirical evidence such as the one which has been put forth by Palazzo and Richter (2005) suggests that British American Tobacco must direct the efforts of its CSR committee towards the enhancement and development of its tobacco supply chain as the transformational CSR initiatives of the organization are essentially misdirected. Henceforth, the foremost argument which should be presented to the organization to encourage the initiation of ‘good practice’ in other areas of corporate social responsibility postulates that current CSR programs should be discarded in favor of the new strategies that can advance the legal, ethical and social responsibilities of the organization towards its stakeholders. Accordingly, the company must also realize and acknowledge the observations which indicate that CSR projects that have been undertaken by the company in various nations of Africa such as the campaign to eliminate child labor in the tobacco industry of Malawi have not yielded positive results. In fact, such programs have been categorized by analysts as publicity stunts that have enabled the company to achieve a positive corporate reputation. Therefore, transformational CSR can possibly work against British American Tobacco. Therefore, it is recommended that British American Tobacco abide by the suggestions of the stakeholder theory by fulfilling its responsibilities towards its suppliers, employees, customers, competitors and the government to promote ‘good practice’ in those areas of corporate social responsibility that have been identified in the analysis. Certainly, corporate social responsibility is a comprehensive and multifaceted concept that encompasses several areas that are of a significant concern to a business. The engagement of the aforementioned stakeholders in the operations of the business would allow British American Tobacco to display ‘good practice’ by engaging in dialogue with members, groups and individuals who have a direct or indirect interest in its operations to successfully achieve the CSR objectives of the company by fulfilling its responsibilities towards its stakeholders and displaying accountability and contestability in CSR reporting. List of References AMAESHI, K., NNODIM, P., & OSUJI, O. (2013). Corporate social responsibility, entrepreneurship, and innovation. New York, Routledge. BABIAK, K. (2013). Routledge handbook of sport and corporate social responsibility. BARRACLOUGH, S., & MORROW, M. (2008). A grim contradiction: the practice and consequences of corporate social responsibility by British American Tobacco in Malaysia. Social science & medicine, 66(8), 1784-1796. BELAL, A. R. (2008). Corporate social responsibility reporting in developing countries: The case of Bangladesh. Ashgate Publishing, Ltd.. BREJNING, J. (2012). Corporate social responsibility and the welfare state: the historical and contemporary role of CSR in the mixed economy of welfare. Farnham, Surrey, Ashgate Pub. CONLEY, J. M., & WILLIAMS, C. A. (2005). Engage, embed, and embellish: Theory versus practice in the corporate social responsibility movement. J. Corp. L., 31, 1. CRANE, A. (2008). The Oxford handbook of corporate social responsibility. Oxford, Oxford University Press. LEE, K., GILMORE, A. B., & COLLIN, J. (2004). Breaking and re-entering: British American Tobacco in China 1979–2000. Tobacco control, 13(suppl 2), ii88-ii95. MATTEN, D., POHL, M., & TOLHURST, N. (2010). The A to Z of Corporate Social Responsibility. John Wiley & Sons. OKOYE, A. (2009). Theorising corporate social responsibility as an essentially contested concept: is a definition necessary?. Journal of Business Ethics,89(4), 613-627. OTANEZ, M. G., MUGGLI, M. E., HURT, R. D., & GLANTZ, S. A. (2006). Eliminating child labour in Malawi: a British American Tobacco corporate responsibility project to sidestep tobacco labour exploitation. Tobacco control, 15(3), 224-230. PALAZZO, G., & RICHTER, U. (2005). CSR business as usual? The case of the tobacco industry. Journal of Business Ethics, 61(4), 387-401. QUINN, M. J., MUJTABA, B. G., & CAVICO, F. J. (2011). Global Tobacco Sales Dilemmas: The Clash of Freedom and Markets with Morality and Ethics.Journal of Business, 2(2), 107-124. SHAMIR, R. (2004). Between Self?Regulation and the Alien Tort Claims Act: On the Contested Concept of Corporate Social Responsibility. Law & Society Review, 38(4), 635-664. Read More