At market economies, corporations are basic economic units which provide goods and services to society. The primary purposes of corporations are maximization of shareholder value and maximization of profit. Simultaneously, they have to comply with the legal and regulatory obligations which embrace the specific social and environmental issues (Carroll, 1991; Katsoulakos, Katsoulakos, 2006). So, firms/corporations must consider the legal and ethical requirements along with their business activities.
It is essential to firms to
maintain their micro-economic values such as maximization of profit and
shareholder value. In order to provide a long-term success, corporations should
benefit from valuation analysis during their business decisionmaking processes.
Traditionally, the prices of inputs, the return on capital, the value of a
product or service in the minds of consumers and customers, calculations of
gross and net profit margins, and similar financial considerations are taken
into account to create an intellectual framework for valuation analysis.
However, consideration of internal criteria brings short-term success at free
market economies (Young, 2004).
Corporations which aim to achieve
for a long term success should also consider the external factors such as
communities, and environment. According to Collins, there are certain
approaches that lead businesses to sustain their success and it is suggested
that corporations should make their analysis by using ―both/and‖ instead of
using ―either/or‖. It can be concluded that ―Both/or‖ analysis provides
corporations to integrate virtue and self-interest into their business
decisions and preserve their wealth at free market economy (Young, 2004). It
can be said that corporations must consider economical interest and CSR
activities together in order to sustain their business for a long period.
In order to
clarify why CSR concept is important and must be taken into account with
corporate strategy, first various definitions of CSR is given at the
―Definitions of CSR‖ section. After the evolution of CSR is provided with ―CSR:
A Growing Concern‖ topic. There are also some other concepts which are related
to CSR and causes misunderstandings for CSR definition. For this purpose, these
related concepts are identified under the ―Concepts Related to CSR‖. In order
to create the framework of this study, studies which discuss about the
dimensions of CSR are analyzed and explained at ―Dimensions of CSR‖ section.
After, ―CSR and YGeneration‖ part is provided in order to explain the
relationship between CSR and YGeneration. Finally, the importance of
communication strategy in CSR is discussed at ―Communication Strategy in CSR‖
section.
1. Definition of CSR
For many years, scholars and
practitioners have been trying to establish a particular and a common
definition of CSR. However, there are various definitions of CSR have been
developed by scholars and practitioners. Those various definitions have been
done in different eras of the historical development of CSR concept and contain
significant attributes of each era. Due to this fact, the term CSR still
remains as a confusing concept at the minds of individuals (Davis, 1960;
Carroll, 1991; Carroll, 1999; Dahlsrud, 2008).
In order to clarify the CSR
concept, it is appropriate to give the prominent definitions of CSR. One of the
oldest and important definitions of CSR is done by Keith Davis:
―Businessmen‘s
decisions and actions taken for reasons at least partially beyond the firm's
direct economic or technical interest‖ (Davis, 1960, p.70).
CSR has also
been defined by many practitioners and some other international institutions
not only by scholars as it is mentioned before. In 1971, Committee for Economic
Development (CED) has made contributed a landmark definition to the literature:
―Business
functions by public consent and its basic purpose are to serve constructively
the needs of society- to the satisfaction of society‖ (CED, 1971, pg11).
Archie B.
Carroll who has made important contributions to CSR literature has suggested
another definition of CSR in 1979:
―For a definition of social
responsibility to fully address the entire range of obligations businesses has
to society, it must embody the economic, legal, ethical, and discretionary
categories of business performance‖ (Carroll, 1979, pg. 499). In 1991,
Carroll named the discretionary
component of CSR as philanthropic component of CSR (Carroll, 1991).
One of
the prevalent definitions is developed by Commission of the European
Committees. In 2001, EU
Commission published the ―Green Paper‖ and CSR is defined as:
―A concept whereby companies
integrate social and environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis‖ (EU Commission,
2001, p. 6).
Kotler and Lee (2005) have also developed a definition to
the CSR concept:
―Corporate social responsibility
is a commitment to improve community wellbeing through discretionary business
practices and contributions of corporate resources‖ (Kotler, Lee, 2005, p. 3).
Klaus Schwab (2008) defines
Corporate Social Responsibility as:
―Responding to stakeholder
expectations while maximizing the corporation‘s profitability; wider financial,
environmental and social impact; minimizing negative and maximizing positive
effects on corporate stakeholders‖.
So, after all
the prominent definitions of CSR have been revised, it is possible to define
CSR as following:
―A concept that businesses
integrate ethical, social and environmental aspects into their business strategies
besides the economical and technical aspects for their stakeholders‘ will in
order to meet the communities‘ demands.‖
CSR concept shouldn‘t be
approached as a trend by corporations. If firms/corporations ignore CSR, it
wouldn‘t be integrated to the company‘s strategic decision. As a result, it
won‘t bring a long-term success. Corporations should adopt a long-term,
strategic CSR approach. Besides, they need to develop innovative products,
services and business models that contribute to societal well-being and lead to
higher quality and more productive jobs. In order maximize shareholder value
corporations should integrate CSR approach into their business strategies
(Arredondo Trapero et al., 2010; EU Commission, 2011).
Management of CSR activities should be
integrated other activities of the company rather than delegating CSR
activities to the public relations activities or corporate foundation
activities. The CEO should lead the management team to identify and implement
CSR activities in a strategy focused discipline on developing the context. It
is also important for companies to identify the contextual conditions in order
to develop a successful strategy. In addition, it is also important for
companies to consider their corporate capabilities while they develop their
strategies. In a competitive context, a successful strategy integrated with
CSR, corporations can change the contextual conditions and can hold the
competitive advantage at the market (Porter, Kramer, 2002). The subject of CSR
is becoming one of the most dynamic and challenging subjects for managerial
agenda. Corporations confer with one of the most important concept for today
and probably for the future which shapes the world agenda (Katsoulakos,
Katsoulakos, 2006).
Regarding the literature,
corporations must adopt CSR approach align with their business strategies. CSR
approach shouldn‘t be perceived as a temporary trend. If corporations aim to
maintain long term, they need to integrate CSR activities into their core
corporate strategies. Corporations must carefully analyze the market
environment where they operate and compete with other corporations. It is
essential to identify the dynamics and conditions of the context. Moreover,
they need to figure out their capabilities and characteristics. Afterwards,
they can develop a successful strategy aligned with CSR approach. In order to
create a competitive advantage among other rivals at the market, corporations
should developing innovative products and services which create a value for well-being
of society will be achieved with a successful strategy. As a result, it can be
said that CSR approach contributes to create a competitive advantage at the
market.
2. CSR: A Growing Concern
The notion of corporate social
responsibility is not new. The evolution
of CSR has a long and varied history in managerial agenda. However, it has
started to draw more attention since 1990. The reasons can be explained as
arising corporate scandals, improvement of globalization which connects global
companies with local communities around the world with significant social
implications, realization of economic growth based development is unsustainable
(Katsoulakos et al., 2004; Katsoulakos, Katsoulakos, 2006; Panwar, Hansen,
2008; Rosamaria C. Moura-Leite Robert C. Padgett, 2011). In early writings of
literature CSR is referred as social responsibility instead of CSR. In 1953,
Howard R. Bowen has published his prominent book ―Social
Responsibilities of the
Businessman‖ which forms the basis of the modern period of the literature about
this subject (Carroll, 1999; Garriga, Melé, 2004). In his prominent book, Bowen
(1953) has given the initial definition of social responsibilities of
businessman as: ―It refers to the obligations of businessmen to pursue those
policies, to make those decisions, or to follow those lines of action which are
desirable in terms of the objectives and values of our society‖. Bowen (1953)
has mentioned that firms are the centers of power and their action has an
important effect on public in various ways. It is also discussed that social
responsibility is not a panacea for all social problems of businesses; however
it specifies an important truth that must guide businesses in the future
(Carroll, 1999; Rosamaria et al., 2011). Regarding the literature, Bowen (1953)
has set forth the institutional statements about CSR and he made the prominent
contributions to the CSR literature. According to Carroll (1999), Bowen should
be called the ―Father of Corporate Social Responsibility‖, since his early and
seminal work (Carroll, A., B., 1999).
Another prominent book has been
published in 1954 by Peter Drucker. It is called ―The practice of Management‖.
According to Drucker (1954), businesses should set objectives regarding eight
key areas and it is included that public responsibility is also one of these
eight key elements. He claimed that it has to be considered that whether the
action is likely to promote public good, to improve the basic beliefs of the
society, to make contribution towards its stability, strength and harmony
(Rosamaria et al., 2011).
In 1960s, there was a significant
improvement on CSR studies. Keith Davis (1960) has made substantial
contributions to the CSR theory:
―Social responsibility has two
rather different faces. On the one hand, businessmen recognize that since they
are managing an economic unit in society, they have a broad obligation to the
community with regard to economic developments affecting the public welfare
(such as full employment, inflation, and maintenance of competition). A quite
different type of social responsibility is, on the other hand, a businessman's
obligation to nurture and develop human values (such as morale, cooperation,
motivation, and self-realization in work)‖ (Davis, 1960, pg 70). In addition to
this, he also mentioned: ―social responsibilities of businessmen need to be
commensurate with their social power‖ (Davis, 1960, pg. 71).
William C.
Frederick has also significant contributions to the development of CSR theory.
According to Frederick (1960) social responsibilities mean that:
―Businessmen should oversee the
operation of an economic system that fulfills the expectations of the public.
And this means in turn that the economy's means of production should be
employed in such a way that production and distribution should enhance total
socio-economic welfare. Social responsibility in the final analysis implies a
public posture toward society's economic and human resources and a willingness
to see that those resources are utilized for broad social ends and not simply
for the narrowly circumscribed interests of private persons and firms‖
(Frederick, 1960, pg 60).
In 1971, the
Committee for Economic Development has made a breakthrough contribution to the
CSR literature:
―The contract between society and
business are, in fact, changing in substantial and important ways. Business is
being asked to assume broader responsibilities to society than ever before and
to serve a wider range of human values. Business enterprises, in effect, are
being asked to contribute more to the quality of American life than just
supplying quantities of goods and services. In as much as business exists to
serve society, its future will depend on the quality of management‘s response
to the changing expectations of the public‖ (CED, 1971, pg. 16).
In 1973, Davis
again made a breakthrough survey about CSR topic. At his prominent article he
discussed:
―For purposes of this discussion
it refers to the firm's consideration of and response to, issues beyond the
narrow economic, technical, and legal requirements of the firm. It is the
firm's obligation to evaluate in its decision-making processes the effects of
its decisions on the external social system in a manner that will accomplish
social benefits along with the traditional economic gains which the firm seeks.
It means that social responsibility begins where the law ends. A firm is not
being socially responsible if it merely complies with the minimum requirements
of the law, because this is what any good citizen would do. A profit maximizing
firm under the rules of classical economics would do as much. Social
responsibility goes one step further. It is a firm's acceptance of a social
obligation beyond the requirements of the law‖ (Davis, 1973).
In 1979, the landmark contribution
has been done by Archie B. Carroll. His prominent article has become one of the
most inspiring articles in literature. The theories at this article have
created a great basis for other scholars. Carroll (1979) proposed a four-part
conceptual model of CSR. These are economic responsibilities, legal
responsibilities, ethical responsibilities and discretionary responsibilities.
Carroll (1979) stated the economic responsibilities as following:
―Before anything else, the
business institution is the basic economic unit in our society. As such it has
responsibility to produce goods and services that society wants and to sell
them at a profit. All other business roles are predicated on this fundamental
assumption‖ (Carroll, 1979, pg. 500). In terms of legal responsibilities, it is
mentioned that: ―society expects business to fulfill its economic mission
within the framework of legal requirements‖ (Carroll, 1979, pg. 500). The other
two responsibilities are beyond the obedience to the law. He explained ethical
responsibilities as: ―Society has expectations of business over and above the
legal requirements‖. Finally, there are discretionary responsibilities. It is
represented as: ―societal expectations do exist for businesses to assume social
roles over and above those described thus far. These roles are purely
voluntary, and the decision to assume them is guided only by a business‘s
desire to engage in social roles not mandated, not required by law, and nor
even generally expected of businesses in an ethical sense‖ (Carroll, 1979, pg.
500).
In 1980s, researchers emphasized on developing new
definitions of CSR and a splintering of writings into the alternative concepts
such as corporate social responsiveness, CSP,
public policy,
business ethics,
and stakeholder
theory/management and so on (Carroll, 1999).
In 1984, Peter
Drucker mentioned that businesses should convert social responsibilities into
business opportunities:
―But the proper "social
responsibility" of business is to tame the dragon, that is to turn a
social problem into economic opportunity and economic benefit, into productive
capacity, into human competence, into well-paid jobs, and into wealth‖
(Drucker, 1984, pg. 62).
In 1987, Edwin
M. Epstein has made a significant contribution to the CSR concept:
―Corporate social responsibility
relates primarily to achieving outcomes from organizational decisions
concerning specific issues or problems which (by some normative standard) have
beneficial rather than adverse effects upon pertinent corporate stakeholders.
The normative correctness of the products of corporate action have been the
main focus of corporate social responsibility‖ (Epstein, 1987, pg. 104).
From 1990 until now the CSR concept has
been approved and promoted by all parts of society from governments and
corporations to consumers and nongovernmental organizations. Also international
organizations such as The World Bank,
The United Nations, the Organization
for Economic Co-operation and Development, the International Labor
Organization, etc. have supported the CSR and developed guidelines to the
continuous movement (Rosamaria et al., 2011).
In 1991, Archie B. Carroll
revised his four-part definition of CSR and put it forward by referring to the
discretionary component as a philanthropic and offered that it embraces
corporate citizenship. Carroll (1991) claims philanthropic responsibilities:
―Philanthropy
encompasses those corporate actions that are in response to society's
expectation that businesses be good corporate citizens‖ (Carroll, 1991, pg.
42).
In 2004, Garriga and Melé
contribute a clarification to the field of business and society, they aimed to
map territory with relevant CSR theories and related approaches. According to
Garriga and Melé:
―Most of current CSR theories are
focused on four main aspects: (1) meeting objectives that produce long-term
profits, (2) using business power in a responsible way, (3) integrating social
demands and (4) contributing to a good society by doing what is ethically
correct. This permits us to classify the most relevant theories on CSR and
related concepts into four groups, which we have called instrumental,
political, integrative and value theories. Most of the theories considered do
not make explicit the implications of each specific approach for the aspects
considered in others groups of theories‖ (Garriga, Melé, 2004, pg. 65-66).
In 2005, Kotler & Lee
published a book for practitioners. In their remarkable book they distinguished
six major types of corporate social initiatives- also called six options for
doing good: cause promotions, cause-related marketing, corporate social
marketing, corporate philanthropy, and finally community volunteering. These initiatives
include ones that are marketing related (i.e., cause promotions, cause-related
marketing, and corporate social marketing) as well as ones that are outside the
typical functions of marketing departments (i.e., employee volunteering and
socially responsible business practices). Besides, they included some
perspectives from professionals for each of the corporate social initiatives.
In addition, they highlighted the strengths and weaknesses of each of the
corporate social initiatives.
Regarding the literature, with
the proliferation of globalization, CSR concept has become more prominent. For
decades, the CSR concept has evolved in a systematic order. Each decade, the
concept has been improved by scholars and practitioners by prominent publications.
However, this evolution differs from one country to another. According to
Hofstede (1986), nationality has a great impact on management in organizational
science. The reason behind of this statement is the culture. The culture
differs from one nation. Traditions and common way of thinking of a particular
society distinguish to another society (Hofstede, 1986). As a consequence,
approaches toward CSR concept can differ among societies. At this study, Turkey
is selected as the field of study. The evolution of CSR theory in Turkey should
be discussed.
CSR in Turkey doesn‘t have a long
history. However, philanthropy concept –a dimension of CSR- has rooted back to
Ottoman era. During the Ottoman era ―waqf‖ or foundation were the major
institutional mechanisms for the philanthropic practices of the public service.
The basic functions of these institutions are to meet with the public needs
(Bikmen, 2006). Turkish culture has a strong philanthropy tradition and
according to World Bank (2003) Turkish people help to those people, who need
help, through waqfs and foundations. In Ottoman era, waqfs and foundations
provide the maintenance of public services. The Ottoman Empire provided
government incentives and tax exemption to those institutions. However, by time
Ottoman Empire restricted the role of waqfs and foundations. In addition, the
government increased its control over those institutions. As a result, this
tradition got damaged (Özturan, 2011). It can be said that, CSR concept is new
for the Turkish business agenda. However, philanthropy which is separate from
the business agenda took a place during the Ottoman era through waqf and
foundations.
After the establishment of
Turkish republic in 1923, especially from 1930s, state had played a major
economic role on the economic development. Until 1945, the state was the major
economic actor and subsidizes the development of Turkey‘s private sector. After
1945, there was a pro-market economic policy started to take shape however
state continued to enroll to the economy heavily. The state involvement to the
economy continued through the 1960s and 1970s. In the meantime the private
sector has been fledging and market economy institutions require a new
dynamism. In 1980s, the liberalization reforms towards the market economy have
been established (Ararat, Ugur, 2003). The last fifty years in Turkey the
volatile economic and political structure has created an unstable economy.
Thus, it was not appropriate to make long term plans and provide a sustainable
development programs for a long term. After the liberalization of economy in
1980s, Turkey has made a progress however, it caused some unfavorable results.
The increasing competitive conditions and price pressures lead companies to
preserve their profitability. As a result companies ignored CSR activities. The
last five years, the stable inflation and growth rate lead companies to
consider their social responsibilities (Corporate Social Responsibility
Association, 2008).
Another study reports that with the
establishment of Turkish Republic, the role of foundations and waqfs had
disappeared since state took control of the philanthropic activities. However,
the collaboration between non-governmental organizations and businesses and
liberalization of non-governmental organizations improved nongovernmental
organizations and with the development of market economy nongovernmental
organizations have started to rise again (Özturan, 2011). According to Bikmen
(2004), CSR among Turkish corporations is highly proliferated however they
approach to CSR as corporate philanthropy and it differs from the main idea of
CSR (Özturan, 2011).
Ascigil (2003) explored the
management attitudes towards CSR. Regarding the study, 75% of the managers
attended to survey give priority to economic criteria when they make decisions.
19.11% of them consider ethical criteria and 6% of them consider legal
criteria. Turkish managers do not differentiate the legal and ethical aspects
of CSR. 53.5% of the managers would not consider the ethical criteria if the
economic performance would be affected negatively. The study concluded that CSR
is not approached as a management behavior in Turkey. It remains a public
relations matter (Ararat, 2008).
In Turkey,
multinational companies are the main actors to create awareness of CSR
practices. Local companies have different perceptions than the multinational
ones.
In Turkey, there are certain initiatives which are
associated with CSR: Eczacıbaşı, TOBB, Yapı Kredi Bank, Koç Holding, Garanti
Bank. Istanbul Foundation for Culture and Arts which is primarily financed by
Eczacıbaşı Group, leaded to the establishment of ―Istanbul Modern Art Museum‖.
Besides, Istanbul Foundation for Culture and Arts is a non-profit,
non-governmental organization established by Dr. Nejat F. Eczacıbaşı. The
foundation organizes international arts festival in Istanbul such as Istanbul
Film Festival which is a popular international festival established in 1983
(Ararat, 2008; Özturan,
2011; IKSV). Koç Holding has established in 1926 and
now it is one of the top five hundred companies in world. In 1967, Koç Holding
established ―Vehbi Koç Vakfı (VKV)‖ and it is the first biggest
non-governmental organization in Turkey. Since then
VKV contributes to education, culture and health for a
better society. Besides, Koç Holding pioneered the establishment of TEMA –The
Turkish Foundation for Combating Soil Erosion, for Reforestation and the
Protection of Natural Habitats- in order to preserve the environment and
pioneered the foundation of TEGV - Educational Volunteers Foundation of Turkey-
in order to contribute to education. TOBB (Turkish Chambers of Commerce) set up
a foundation which established a modern university in
Ankara (Özturan, 2011). Yapı Kredi Pension Fund
sponsored a project to protect genetic sources and promote commercial
cultivation of Turkish saffron plant. Garanti Bank in cooperation with the
World Wildlife Foundation sponsored a project to protect the wild life in Kure
Mountains. According to the examples it is possible to interpret that the
actions are not related to core business of the corporations and they do not
indicate a strategic commitment to the core stakeholders (Corporate Social
Responsibility Association, 2008; Ararat, 2008).
Regarding the literature, CSR
concept has a long historical development process since 1950s. Especially, the
scholars and institutions in advanced economies put so much effort to define,
develop and integrate into organizational strategy. Eventually, they achieved
their goal. For example; the meeting which is held by EU Commission in Brussels
on 25.10.2011 discussed to integrate CSR as a strategic approach to the firms
in EU. While CSR concept has been developing in advanced economies, the
situation in Turkey was different. Even if there are some efforts by companies
in terms of CSR practices, firms do not approach as a corporate strategy
towards CSR concept until recent years. The political and economic fluctuations
in Turkish market economy have made it even harder. Recently, pioneer firms
have started to develop philanthropy projects such as Boyner Group‘s projects
―Nar Taneleri‖. Some of them also offered some green products e.g. Eczacıbaşı
Building Products division Vitra has developed a project called Blue Life. Blue
Life is a production, design and management approach for all building products
division brands such as Vitra and Vitra Therm (BlueLife). So, it can be said
that there are some firms that integrate CSR into their organizational
management approach. However, it is still weak and need to be improved.
3. Concepts Related to CSR
During the evolution of CSR
concept, some other alternative concepts such as corporate citizenship,
business ethics, sustainability and corporate social performance (CSP) have
been also developed. Even if these concepts can be competing or overlapping,
CSR concept is most popular and widely accepted concept at social business
literature (Carroll, 1999; Carroll, Shabana, 2010). At this section, those
concepts related to CSR are discussed: Sustainability, corporate citizenship,
corporate philanthropy, corporate governance, corporate social performance,
business ethics, corporate social irresponsibility, corporate accountability
and green marketing.
Sustainability and sustainable development
has become a prominent concept in corporate agenda. In 1987, United Nations
published a report which is called ―Our
Common Future‖ or ―The Brundtland
Report‖. At this significant report, sustainable development concept has been
discussed in detail. Sustainable development concept has received more
attention after UN published the report (OECD, 2008; Too, Bajracharya, 2015).
Sustainable development is defined by UN at the Brundtland report as following:
―Sustainable development is
development that meets the needs of the present without compromising the
ability of future generations to meet their own needs‖ (UN, 1987).
At this definition ―needs‖ refer
to the needs of people mostly from developing countries. On the other hand,
there are limitations over the environmental resources to meet with the present
and future needs (UN, 1987).
Sustainability is defined:
―An integrated
understanding of the interconnectedness of human activity with all related
man-made and naturally occurring systems‖ (Sage Publications, 2012, p223).
Corporate Citizenship is another concept which describes the
accountability of firms/brands towards the society at the marketplace
(Crittenden et al., 2011). Corporate citizenship concept is defined by
Crittenden et al. (2011):
―Corporate citizenship really
means developing mutually beneficial, interactive and trusting relationships
between the company and its many stakeholders—employees, customers,
communities, suppliers, governments, investors and even nongovernmental
organizations (NGOs) and activists through the implementation of the company‘s
strategies and operating practices‖ (Crittenden et al., 2011).
Corporate philanthropy is another
approach adopted by firms/brands in order to act well. Kotler & Lee (2005)
has explained corporate philanthropy as following:
―A corporation
makes a direct contribution to a charity or cause, most often in the form of
cash grants, donations, and/or inkind services‖ (Kotler, Lee, 2005, pg23).
Dell Inc.
Company‘s ―Direct Giving‖ program can be a good example for corporate
philanthropy. Dell is a global company which delivers enterprise computing
products, desktops, monitors, printers, notebooks, handhelds, software, and
peripherals to more than 190 countries. It has 40,000 employees around the
world. With their
―Direct Giving‖ program Dell
gives opportunity to make contributions/donations to Earth Share project which
supports preservation of environment (Kotler, Lee, 2005).
Corporate governance is explained by
Klaus Schwab, in Foreign Affairs Magazine (2008):
―Corporate governance is more
than the way in which a company is run. It means that a company complies with
local and international laws, transparency and accountability requirements,
ethical norms, and environmental and social codes of conduct‖ (Schwab, 2008).
Corporate social
performance (CSP) is defined as:
―A construct that emphasizes a
company‘s responsibilities to multiple stakeholders, such as employees and the
community at large, in addition to its traditional responsibilities to economic
shareholders‖ (Turban, Greening, 1997).
Carroll (1979) has made a
landmark contribution towards the CSP concept. In his prominent article Carroll
(1979) created a conceptual model that describes the main aspects of CSP.
According to his model CSP requires three main aspects: first a firm‘s social
responsibilities be assessed, second the social issues must be addressed and
identified and finally a response philosophy must be chosen. The model explains
regarding aspects clearly in a conceptual framework that will be useful for
both academicians and practitioners (Carroll, 1979).
Business ethics is another important
term in corporate agenda. It is described
as:
―Business ethics represent the
broad principles of integrity and fairness associated with governance, human
rights and ethical trending‖ (Katsoulakos, Katsoulakos, 2006).
In today‘s business world,
companies report ethical codes and standards in order to show that they run
responsible business activities at the society they operate. By this way they
aim to avoid corporate scandals. However, the ethical codes and standards must
comply with the organizational culture of the company. Otherwise, companies
can‘t avoid from the corporate scandals even if they have the perfect ethical
codes and standards (Katsoulakos, Katsoulakos, 2006).
Corporate social irresponsibility (CSI) is
a recent concept in today‘s corporate agenda (Nunn, 2012). CSI can be explained
as following:
―CSI is about being reactive as
opposed to proactive addressing corporate issues and the ways and means by
which they are relate to wider society. As its extreme CSI may entail breaking
the law society‖ (Jones et al., 2009).
Corporate accountability is another
concept that exists in CSR literature.
It is explained:
―Corporate accountability
represents a corporation‘s social responsibility to explain its actions (past,
present, and future) in an accessible, reasonable, and meaningful way to the
society in which it operates‖ (Sage Publications, 2012, pg. 48).
The last concept which is also
articulated in this research is “Green
Marketing”. American Marketing Association (AMA) provided three different
definitions for Green Marketing: The
first one is from retailing point of view: ―The marketing of products that are
presumed to be environmentally safe‖. The second definition belongs to social
marketing approach: ―The development and marketing of products designed to
minimize negative effects on the physical environment or to improve its
quality‖. The last one is from environments point of view: ―The efforts by
organizations to produce, promote, package, and reclaim products in a manner
that is sensitive or responsive to ecological concerns‖.
Consequently,
those concepts mentioned above take an important place in CSR literature. They
have been discussed by academicians and also business institutions.
4.. Dimensions of CSR
The definition of CSR varies
among scholars and practitioners. Each of these definitions contains different
aspects of the CSR. Based on those definitions, there are several aspects of
CSR from different writers (Dahlsrud, 2008). CSR encompasses human rights,
labor and employment practices -training, diversity, gender equality and
employee health and well-being-, environmental issues -such as biodiversity,
climate change, resource efficiency, life-cycle assessment and pollution
prevention-, and combating bribery and corruption. CSR agenda also contains
community involvement and development, the integration of disabled persons, and
consumer interests and privacy (EU, 2011). According to the literature, CSR
includes many aspects. Many writers mention about those dimensions differently.
However, there are prominent articles which form a basis for CSR literature. At
this topic, prominent writers and their relevant articles are discussed.
According to Carroll (1991),
there are four dimensions of social responsibility which constitutes total CSR
approach. These dimensions are: economic, legal, ethical and philanthropic.
Moreover, these four components of CSR can be depicted as a pyramid. It is
important to mention that all of these components have always existed at some
extend, however at recent years ethical and philanthropic functions have become
significant (Carroll, 1991). These four components are explained in details in
order to understand the concepts better.
The first component of CSR is
economic responsibilities of business which is mentioned by Carroll (1991).
Business organizations are the basic economic units in society that have
intentions to produce goods and services based on consumers‘ needs and wants.
During this process they need to make profit. The profit motive was mentioned
as a primary goal for entrepreneurship and the idea of profit motive has turned
into a notion of maximum profits. This notion has become the most enduring one
ever since. All other responsibilities of business are based upon economic
responsibility. Without it other responsibilities become unimportant (Carroll,
1991). There are five sub-dimensions of economic responsibilities in order to
identify the criterion better:
• ―It
is important to perform in a manner consistent with maximizing earnings per
share.
• It
is important to be committed to being as profitable as possible.
• It
is important to maintain a strong competitive position.
• It
is important to maintain a high level of operating efficiency.
•
It is important that a successful firm be
defined as one that is consistently profitable‖ (Carroll, 1991).
The second component of CSR is a
legal responsibility which is mentioned by Carroll (1991). Businesses are
expected to comply with the laws and regulations of the state, federal and
local government where they will operate. Firms are expected to fulfill their
economic mission with the framework of the law. According to Carroll (1991),
legal responsibilities can be seen as codified ethics which is established by
lawmakers in order to provide fair operations in the business. It contains five
features in order to identify the activity as a legal responsibility. These
are:
• ―It
is important to perform in a manner consistent with expectations of government
and law.
• It
is important to comply with various federal, state, and local regulations.
• It
is important to be a law-abiding corporate citizen.
• It
is important that a successful firm be defined as one that fulfills its legal
obligations.
•
It is important to provide goods and services
that at least meet minimal legal requirements‖ (Carroll, 1991).
The third
component of CSR is ethical responsibilities. Carroll (1991) explained ethical
responsibilities embody with standards, norms, or expectations that reflect a
concern about what consumers, employees, shareholders, and the community
consider as fair or keeping with the respect or protection of stakeholders'
moral rights. Changing ethics or values precede the establishment of law
because they become the driving force behind the creation of laws or
regulations. Ethical responsibilities are also approached as embracing the new
emerging values and norms of the society which businesses should meet with
them. Those norms and values are meant high standard of performance than the
current law require. However, these
kinds of norms and regulations are generally under the debate among the society
members (Carroll, 1991).
Ethical responsibilities include five dimensions to
identify:
• ―It
is important to perform in a manner consistent with expectations of societal
mores and ethical norms.
•
It is important to recognize and respect new or
evolving ethical/ moral norms adopted by society.
• It
is important to prevent ethical norms from being compromised in order to
achieve corporate goals.
• It
is important that good corporate citizenship be defined as doing what is
expected morally or ethically.
•
It is important to recognize that corporate
integrity and ethical behavior go beyond mere compliance with laws and
regulations‖ (Carroll, 1991).
The last component of CSR is
philanthropic responsibilities. Corporate actions which are in response to
society‘s expectations are viewed as philanthropic. Those expectations include
that businesses are being good as a corporate citizens. An active engagement to
acts or programs in order to promote human welfare is included to the
philanthropic responsibilities of businesses. Contributions of financial
resources or executive time are viewed as philanthropic activities of
companies. Contributions to the arts, education or the community are the
examples of this approach (Carroll, 1991). The distinguishing feature of two
components - philanthropic and ethical responsibilities- of CSR has been
mentioned at the article. The demand of community from the firms is to
contribute their money to humanitarian programs. However, they don‘t insist
when those contributions don‘t happen at a desired level. Although the societal
expectations in terms of ethical or moral sense always exist, firms will try to
satisfy this demand at a certain level. If firms do not satisfy those ethical
or moral demands at desired level, society won‘t call the firm as unethical.
So, at philanthropic aspect is identified that is expected in moral or ethical
sense. Ultimately, it is important to mention that this aspect of the CSR is
less important than other three aspects of social responsibility (Carroll,
1991). The five dimensions of philanthropic responsibilities are mentioned as
following:
• ―It
is important to perform in a manner consistent with the philanthropic and
charitable expectations of society.
• It
is important to assist the fine and performing arts.
•
It is important that managers and employees
participate in voluntary and charitable activities within their local
communities.
• It
is important to provide assistance to private and public educational
institutions.
•
It is important to assist voluntarily those
projects that enhance a community's quality of life‖ (Carroll, 1991).
Another study which is focused on
the dimensions of CSR is conducted by Schwartz and Carroll (2003). At their
relevant article, they discuss about three dimensions of CSR which is called
‗The three-domain model of CSR‘. According to this model CSR is contains three
aspects. These are: economic, legal and ethical. It basically relies on the
same Carroll‘s four-part model except the philanthropic dimension. At this
model philanthropic dimension is embodied into the ethical and economical
aspects, reflecting the possible distinguishing motivations for philanthropic
activities. Moreover, at this article those three dimensions are depicted with
a Venn diagram in order to show overlapping points of those three aspects. It
is not discussed economic aspect is the main aspect and the other two aspect
are built on economic responsibilities. It identifies that none of them is
important by themselves and they are related to each other by the intersecting
points (Schwartz, Carroll, 2003).
According to Schwartz and
Carroll (2003), the economic domain is identifies those activities which have
direct or indirect positive impacts on corporate economy. The positive impact
is based on two criteria:
• Maximization
of profits
• Maximization
of share values (Schwartz, Carroll, 2003).
Actions which are planned to
increase sales or avoid litigation are given as an example for the direct
economic activities. For the indirect economic activities, activities which are
designed to improve employee moral or company‘s public image can be given as an
example. So, activities which are pursued by the corporation in order to
improve the profits or share value are considered economic responsibilities.
Majority of corporate activities
are economic in nature. However, there can be some activities which are not
included into the economic ones. Only if those activities are not planned to
maximize profit when there is more profitable alternative or they are not any
considerations of the possible economic consequences of the firm. The results
of those kinds of activities may cause a decline at profit or share value.
Based on these results, it can be said that the activities are non-economic
motive however; it can represent an unsuccessful business decision which can be
considered within the economic domain (Schwartz, Carroll, 2003).
The ‗Legal Domain‘ is mentioned
as a second dimension by Schwartz and Carroll (2003). The legal domain of CSR
means that firm‘s responsiveness to governmental, federal, state and local
legal regulations in order to meet with the society‘s expectations. At this context, legality can be observed in
terms of three general categories. These are:
• Compliance
• Avoidance
of civil litigation Anticipation
of the law.
Compliance has been divided into
three dimensions: passive, restrictive and opportunistic. First type of
compliance is called passive and it is mentioned that it has passive and
accidental nature. At this context, it can be explained that firms do what they
want and it just ends up by complying with the law. For example, even if there
are no legal requirement about safety standards for a certain product, company
has stuck with these safety standards for their product. By doing this, company
fulfill the passive compliance mode (Schwartz, Carroll, 2003).
The second type of compliance is
called restrictive. At this type of compliance, firms are compelled to follow
the rules which are established by governments. At this point, it is important
to highlight that the term restrictive means legal system is limiting,
constraining, or modifying the intended behavior. For example, a firm offers a
product which has lower safety than the standards require. Due to this reason
it wouldn‘t be allowed to meet with the market and the consumer by the
authorities (Schwartz, Carroll, 2003).
The third type of compliance is
opportunistic compliance. There are two types of opportunistic compliances:
first, corporations seek for loopholes at the laws and regulations in order to
take advantage of it, and the second one is corporations prefer to operate at a
particular jurisdiction since it has weaker standards (Schwartz, Carroll,
2003).
After the identification of
sub-dimensions of compliance it will be appropriate to explain the second
dimension of legality. Avoidance of litigation is the second dimension of
litigation. Corporations struggle to run their activities based on legal
requirements in order to avoid possible current and future civil litigation for
their negligent behavior (Schwartz, Carroll, 2003).
The last dimension of legality is
anticipation of the law. It refers to the anticipation of changes for
legislation. As it is known that the legal processes are slow in their nature
(Schwartz, Carroll, 2003).All those dimensions are summarized with a table by
the writers. Table 1 depicts all the legal sub-dimensions of CSR.
Table 1: Legal
Sub-Dimensions of CSR
Type
of legal motive
|
Typical
corporate/managerial response
|
Passive Compliance
(Outside legal domain)
|
"Well, looking back
on it, we did happen to comply with the taw."
|
Restrictive Compliance
|
"We wanted to do
.something else but the law prevented us."
|
"We did it in order to comply with the
law."
|
|
Opportunistic Compliance
|
"Well, the law allows us to do
it."
|
"We operate in that
jurisdiction because of the less stringent legal standards."
|
|
Avoidance of Civil
Litigation
|
"We did it because we might get sued
otherwise."
|
"Lawsuits will be dropped."
|
|
Anticipation of the Law
|
"The law is going to be changed
soon."
|
"We wanted to pre-empt the need for
legislation."
|
Source:
Schwartz, M., S., Carroll, A., B., (2003). Corporate Social Responsibility: A
three domain approach. Business Ethics Quarterly, 13, 503-530
The last dimension which is mentioned at the article is
ethical domain. It refers to ethical responsibilities of business which is expected
by society and stakeholders. Corporations should be responsive either domestic
or global ethical obligations. According
to the article ethical domain includes three sub-dimensions: conventional,
consequentialist and deontological (Schwartz, Carroll, 2003).
The conventional standards are
limited into a concern for justice or moral rights. The purpose of the new
model standard of conventions has been identified that those norms and
standards are accepted by the organization, the industry, the profession or
society in order to proper business operations. At this point the word society
means the stakeholders of the corporation which contains shareholders
employees, consumers, competitors, suppliers, local community and the general
citizens. Society norms vary regarding the societal groups‘ point of view such
as different consumer groups. In order to reduce this limitation, formal codes
of conduct or ethics should be developed according to the reference group. By
this way, it is possible to understand whether the company acts ethically or
not according to the conventional standards (Schwartz, Carroll, 2003).
The second sub-dimension is
consequentialist standard. It emphasizes on ends or consequences of the
actions. According to Velasquez (2002); in order to decide whether an action is
ethical or not the results of the action has to promote the good of the
society. In addition to this, it is also mentioned that if the action is
designed to produce the greatest net benefits to the society among the other alternatives
it can be said that it is ethical according to the consequentialist standards
(Schwartz, Carroll, 2003).
The last sub-dimension is
deontological standards which are opposed to emphasize on consequences or
results of actions. It is identified that embodying those activities which
reflect a consideration one‘s duty or obligation (Schwartz, Carroll, 2003). At
three domain model, deontological principles are also considered in order to
capture more specifically a broader range of potential ethical justifications
which are suggested by the literature as duty-based nature (Schwartz, Carroll,
2003). According to this criterion; activities such as amoral in their nature,
although it conflicts with a certain moral principle it still exists, or are
only planned to produce a net benefit for the corporation and not for the
affected stakeholders (Schwartz, Carroll, 2003).
Another study,
which is conducted by Alexander Dahlsrud, conducts an analysis towards the
existing definitions of CSR. Five dimensions are categorized through analyzing
37 definitions based how consistently these dimensions are invoked.
The five dimensions are classified below:
• The
environmental dimension
•
The social dimension
• The
economic dimension
• The
stakeholder dimension
• The
voluntariness dimension (Dahlsrud, 2008).
The environmental dimension has
been identified as the natural environment of the business. It is expressed
with the following sub-dimensions: a cleaner environment, environment
stewardship, environmental concerns in business operations.
The social dimension has been
identified as the relationship between the business and the society in which
business operates. The sub-dimensions of this aspect are expressed as
contribution for a better society, integration of the social concerns towards
the business operations, consideration of the full scope of their impact on
communities (Dahlsrud, 2008).
The economic dimension means
socio-economic or financial aspects by including the description of CSR in
terms of business operation. The sub-dimensions of the economic dimension are:
contribution to the economic development, preservation of the profitability and
business operations.
The fourth dimension which is
included by Dahlsrud (2008) is the stakeholder dimension. It can be identified
as the stakeholders or stakeholders groups which have a relationship with the
corporation. The sub-dimensions are expressed as following: interaction with
their stakeholders, how organizations interact with their employees, suppliers,
customers and communities, treating the stakeholders of the firm.
The last dimension of CSR is the
voluntariness dimension which is described as the actions are not prescribed by
law. It contains three sub-dimensions; based on ethical values, beyond the legal
obligations and voluntary (Dahlsrud, 2008).
Garriga and Melé (2004) have stated
that there are four groups to classify CSR theories: instrumental theories,
political theories, integrative theories, ethical theories. Instrumental
theories refer that corporations are perceived as a device or an instrument for
prosperity creation. Social activities are run by businesses target only to
achieve in economic results. Political theories refer to corporations are
perceived as power units in society and corporations are responsible to use
their power in political arenas. Integrative theories refer that the
corporation is emphasized on the satisfaction of social demands. The last one,
ethical theories refer to the ethical responsibilities of corporations to the
society they operate. Instrumental theories are divided into three dimensions:
maximization of shareholder value, strategies for competitive advantages and
cause related marketing. Political theories are divided into four dimensions:
corporate constitutionalism, integrative social corporate theory, integrative
social contract, and corporate (business) citizenship. Integrative theories are
divided into four groups: issues management, public responsibility, stakeholder
management, and corporate social performance. Ethical theories are divided into
four groups: stakeholder nominative theory, universal rights, sustainable
development and the common good
(Garriga, Melé, 2004). Since cause-related marketing
and sustainable development are prominent concepts in CSR literature nowadays,
only those two factors are included to the dimensions of CSR at this study.
Cause-related marketing refers to differentiate products by adding socially
responsible attributes to the product that influences corporate reputation and
increases company revenues (Garriga, Melé, 2004). According to World Business
Council for Sustainable Development (2002) sustainable development refers to
the integration of social, environmental and economic concerns to make balanced
decisions for the long term (Garriga, Melé, 2004).
After those four prominent
articles- Carroll (1991), Schwartz and Carroll (2003), Garriga and Melé (2004),
Dahlsrud (2008) - from CSR literature were reviewed, the main dimensions of CSR
concept are noted. Among those four studies, Carroll (1991)‘s research is
widely accepted at the literature. So, for the purpose of this study, the
dimensions of CSR mainly based on Carroll‘s four part CSR pyramid model: economic,
legal, ethical and philanthropic. In addition, the dimensions which are
developed by Dahlsrud (2008) social and environmental dimensions of CSR are
included to the
Carroll‘s dimensions of CSR for
this study and a matrix is developed to depict the dimensions of CSR for this
study (Table 2).
Dimensions
of CSR
|
Carroll (1991)
|
Schwartz
&
Carroll
(2003)
|
Dahlsrud (2008)
|
Garriga
&Melé
(2004)
|
The
Economic Dimension
|
||||
Maximization of earnings
|
X
|
X
|
X
|
|
Maximization of share value
|
X
|
|||
Profitability
|
X
|
X
|
X
|
|
Competitive position
|
X
|
|||
Operating efficiency
|
X
|
X
|
||
Cause-related Marketing
|
X
|
|||
The
Legal Dimension
|
||||
Government and law
expectations
|
X
|
X
|
||
Comply with federal, state
and local regulations
|
X
|
X
|
||
Law-abiding corporate
citizen
|
X
|
X
|
||
Legal obligations
|
X
|
X
|
||
Legal requirements
|
X
|
X
|
||
The
Ethical Dimension
|
||||
Moral and ethical norms
|
X
|
X
|
X
|
|
New or evolving ethical
moral norms
|
X
|
|||
Acting morally or ethically
|
X
|
X
|
||
Beyond laws and regulations
|
X
|
X
|
||
Corporate goals
|
X
|
|||
Sustainable development
|
X
|
|||
The
Philanthropic Dimension
|
||||
Philanthropic and
charitable expectations
|
X
|
|||
Assist fine and performing
arts
|
X
|
|||
Participation of charitable
and voluntary activities
|
X
|
X
|
||
Assist private and public
educational institution
|
X
|
|||
Support voluntary projects
|
X
|
|||
The
Social Dimension
|
||||
Contribute to a better
society
|
X
|
|||
Integration of social
concerns in their business operations
|
X
|
|||
Consideration of their
impact on communities
|
X
|
|||
The
Environmental Dimension
|
X
|
|||
Cleaner environment
|
X
|
|||
Environmental stewardship
|
X
|
|||
Environmental concerns in
business operations
|
X
|
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