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Corporate Social Responsibility & Sustainable Business Practices: A Study of the Impact of Relationship between CSR & Sustainability
Abstract
Purpose: The purpose of this study is to show that there exists a positive correlation between Corporate Social Responsibility initiatives and adoption of sustainable business solutions. Design/Methodology/Approach: The paper surveyed top level managers and business experts of a sample of companies, representing a wide array of sectors and industries. Findings: The study finds that there is a positive correlation between CSR policies and adoption of sustainable business practices. Managerial Implications: As CSR improves the organizations performance, this study will be beneficial in terms of building professional image as well as enhance its societal roles & responsibilities. Scope for future work/research limitations: The study focuses on the roles and duties performed by the top notch companies thereby, restricting CSR practices of lower and middlelevel bodies. Future research should expand its area of study and include all the levels.
... In other words, CSR can ensure that stakeholders' perceptions are not influenced negatively by activities that they might deem unsustainable (Palazzo and Richter, 2005;Yoon et al., 2006). Saha and Dahiya (2015) show that there is a positive correlation between CSR policies and the adoption of sustainable business practices. In addition, Watson (2015) tends to assume organizations that have good SP are likely to have high levels of CSR disclosure. ...
Purpose
The purpose of this paper is to investigate the direct and indirect links between corporate governance and sustainability performance using corporate social responsibility.
Design/methodology/approach
The study is based on a sample consisting of 300 UK firms over the 2005–2017 period. This study applied structural equations models that specify both a direct and an indirect link between corporate governance and sustainability performance.
Findings
The authors find that corporate governance has a positive effect on sustainability performance. In addition, this study shows that corporate social responsibility fully mediates the relationship between corporate governance and sustainability performance in UK firms.
Practical implications
This study shows that firms are invited to engage more in sustainability performance and corporate social responsibility activities, which reduces agency conflicts between managers and shareholders.
Originality/value
To the authors’ knowledge, no research studies examined empirically the direct and indirect relationship between corporate governance and sustainability performance. Therefore, the main contribution of this research is to show how corporate governance effectiveness leads to higher corporate social responsibility level and sustainability performance using two analyses methods (mediator analysis and multiple mediator analysis).
There have long been conflicting expectations of the nature of companies’ responsibilities to society. However, for those businesses that do undertake what might be termed “corporate social responsibility”, what is actually socially responsible behaviour as opposed to management of corporate image management or other activity aimed predominantly at business benefits? This article reviews definitions of corporate social responsibility from both practice and the literature and looks at theories to explain why such behaviour takes place. The literature has strong divides between normative or ethical actions and instrumental activities. The article concludes by posing the question of when instrumental activities become business activities rather than largely social responsibility.
Purpose
The purpose of this paper is to show that corporate governance is fundamental to the continuing operation of any corporation; hence much attention has been paid to the procedures of such governance. Similarly sustainability is fundamental to the continuing operation of any corporation, and is arguably the fashionable concept of the moment. While it is clear what is generally meant by corporate governance it is much less clear what is meant by sustainability and the paper starts by investigating this concept.
Design/methodology/approach
For two such fundamental concepts however it would seem that there should be a relationship between the two, although little work has been undertaken on exploring this relationship. The central part of this paper is therefore based upon an exploration of the relationship between governance and sustainability, by investigating the FTSE100 companies and their corporate governance policies.
Findings
This analysis found some strengths – and hence cause for optimism – and some weaknesses – and hence cause for concern. Areas where further work is needed are identified.
Research limitations/implications
The paper has implications in enhancing the understanding of the necessary components of corporate governance, although it is necessarily limited by the size of the sample.
Originality/value
This paper increases the understanding of the relationship between corporate governance, sustainability and sustainable development.
At the start of the 21st century, Corporate Social Responsibility (CSR) seems to have great potential for innovating business practices with a positive impact on People, Planet and Profit. In this article the differences between the management systems approach of the nineties, and Corporate Social Responsibility are analysed.An analysis is structured around three business principles that are relevant for CSR and management systems: (1) doing things right the first time, (2) doing the right things, and (3) continuous improvement and innovation. Basically CSR is focussing on the second principle, and management systems focus on the first. However, CSR is very likely to build on the management systems as well.From a CSR point of view, the existing generation of management systems with their focus on rational control (= doing things right) can only be of limited use in the development of CSR. However, the preventive rationalities of management systems are important. Values and the principle doing the right things is extremely relevant for CSR. This goes far beyond the present generation of ISO type management systems; opportunities stem from building on TQM approaches like the EFQM Business Excellence model. Continuous improvement and innovation is a permanent challenge underlying the two other business principles, and requires both individual and organisational learning processes. In the present generation of management systems, continuous improvement mainly addresses rational prevention, barely the value aspects of business.For the further development and implementation of CSR, each of the three business management principles are vital. There is a need for a new generation of management systems that addresses the values at stake in strategic decision-making, both at company level and in the behaviour of individuals, while the rationalities of prevention and anticipation are still relevant. In both directions more emphasis for continuous learning and innovation will be needed.CSR is likely to trigger the development of management systems in the directions mentioned. This will support companies to be credible and transparent in improving the performance with respect to people, planet and profit.
Within their value chains of suppliers through customers, many businesses are becoming more aware of the environmental aspects and impacts of their organizations. Viewed as a continuum of behavior, business environmentalism can range from simply complying with the law to accepting and pursuing a goal of sustainable development. The point on the continuum at which an organization chooses to operate is reflected in its environmental mission, policies, and actions. Attributes of the various levels of behavior and classification of some organizational mission statements are examined in this paper.
Having the ambition to contribute to the practical value of the theory on corporate social performance (CSP), this paper approaches the question whether CSP can contribute to the competitive advantage of firms. We adopted an explorative case-study methodology to explore the variety of positive and negative effects of CSP on the competitiveness of organizations. As this study aimed at identifying as great variety of these effects as possible, we selected a diversified group of respondents. Data was thus collected through embedded units of analysis in a petrochemical company, and triangulated with the opinions of experts on CSP. Overall, we found various positive and negative effects of CSP on the competitiveness of organizations. CSP is therefore not an innocent adventure for executives, but rather a strategy for achieving corporate objectives. If not carefully implemented, the CSP strategy may harm the competitive advantage of the firm, as our results have suggested.
According to Dr. Clare Graves, mankind has developed eight core value systems,1 as responses to prevailing circumstances. Given different contexts and value systems, a one-solution-fits-all concept of corporate sustainability is not reasonable. Therefore, this paper presents various definitions and forms of sustainability, each linked to specific (societal) circumstances and related value systems. A sustainability matrix– an essential element of the overall European Corporate Sustainability Framework – is described showing six types of organizations at different developmental stages, with different forms of corporate sustainability, each supported by specific institutional arrangements.
This paper provides preliminary insights into the process of sense-making and developing meaning with regard to corporate social responsibility (CSR) within 18 Dutch companies. It is based upon a research project carried out within the framework of the Dutch National Research Programme on CSR. The paper questions how change agents promoting CSR within these companies made sense of the meaning of CSR. How did they use language (and other instruments) to stimulate and underpin the contextual essence of CSR? Why did they do that in this particular way? What were the consequences of this approach for shaping the process of CSR in their company? Did their efforts contribute to a new way of thinking and acting or was it merely putting old wine in new barrels? A preliminary conclusion is that change agents use above all linguistic artefacts (words and notions) and carry out practical projects while constructing meaning. Still, the meaning of meaning itself remains highly intangible, situational and personality related.
The article is intended as a contribution to the ongoing conceptual development of corporate sustainability. At the business level sustainability is often equated with eco-efficiency. However, such a reduction misses several important criteria that firms have to satisfy if they want to become truly sustainable. This article discusses how the concept of sustainable development has evolved over the past three decades and particularly how it can be applied to the business level. It then goes on to describe the three types of capital relevant within the concept of corporate sustainability: economic, natural and social capital. From this basis we shall then develop the six criteria managers aiming for corporate sustainability will have to satisfy: eco-efficiency, socio-efficiency, eco-effectiveness, socio-effectiveness, sufficiency and ecological equity. The article ends with a brief outlook towards future research.
Corporate sustainability performance measurement systems (SPMS) have been the subject of a growing amount of research. However, there are many challenges and opportunities associated with the design, implementation, use, and evolution of these systems that have yet to be addressed. The purpose of this article is to identify future directions for research in the design, implementation, use, and evolution of corporate SPMS. A concise review of key literature published between 2000 and 2010 is presented. The literature review focuses on research conducted at the both the individual corporation- and sector-levels. The review of published literature provides a basis for the identification of a structured set of 65 key research questions to guide future work. The research questions will be of interest to both practitioners and researchers in corporate sustainability performance measurement.
This paper offers directions for the continuing dialogue between business ethicists and environmental philosophers. I argue that a theory of corporate social responsibility must be consistent with, if not derived from, a model of sustainable economics rather than the prevailing neoclassical model of market economics. I use environmental examples to critique both classical and neoclassical models of corporate social responsibility and sketch the alternative model of sustainable development. After describing some implications of this model at the level of individual firms and industries, I offer an ethical justification of the sustainability alternative that is derived from the same values that underlie traditional market economics.
Explores the determinants of perceived social obligations of corporate managers focusing on managerial and personal demographics. A survey of Australian corporate managers revealed that there is a significant relationship between the level of education, training status and religiosity of managers and their perception of corporate social responsibility (CSR). The findings indicate that managerial commitment to CSR is linked with the acquired qualities (education and training) rather than their inherent physical maturity (age). Furthermore, modernity reflected in achievement via hard work, rather than mere belief in luck, determines the pattern of managerial perception of CSR. Religious metaphors seem to influence managers’ perception of social commitment suggesting that theology is also an important determinant of the ethical perceptions of Australian corporate managers. These findings have important implications for personnel policies of socially responsive corporations. Addresses the limitations of the study and explores potential areas of further research.
The term Sustainable Development has been used in many different contexts and consequently has come to represent many different ideas. The purpose of this paper was to explore the underlying meaning of the term Sustainable Development, and to assess the dominant ethic behind such meaning. Through this exploration, we uncovered a change in the semantic meaning of the term, and described what that meaning entails. The term Sustainable Development had the potential, we argue, to stimulate discursive engagement with respect to the future development of society within an ethical framework based around the values of inclusivity, diversity, and integration. The importance of philosophical context within which the term is used influences the definitional process of meaning, and has been simulated into the language of the dominant scientific-economic paradigm. We go on to explore how this meaning change has come about. In doing so we looked to the Enlightenment period and the resulting philosophies to explore the foundations of meaning, and then to the work of Jrgen Habermas to explain how the scientific-economic paradigm came to dominate the meaning of Sustainable Development.
The purpose of this article is to develop a model of how managers perceive the responsibilities of business towards society.
The article is based on the survey responses of more than 1,000 managers in eight large international firms. It is concluded
that the managerial perceptions of societal responsibilities differ in some respects from the mainstream models found in
the corporate social responsibility (CSR) and business ethics literature. The article is an output of RESPONSE: an EU- and
corporate-funded research project on managerial perceptions of CSR.
In the last ten years, the notion of a ‘business case’ for corporate sustainability has increasingly been used by the corporate sector, environmental organizations, consultancies and so on, to seek justification for sustainability strategies within organizations. In this paper, we aim to systemize and assess existing research and tools related to this increasingly popular concept. We present a review of (1) theoretical frameworks, (2) instrumental studies aiming to either prove or disprove a hypothesized causal sequence between corporate social or environmental performance and financial performance, (3) descriptive studies examining manager’s actual perceptions and practices, and finally (4) tools. We identify a clearly insufficient understanding of manager’s key arguments or business logic for adopting corporate sustainability strategies (how ‘business cases’ are built, how effective they are and what barriers they face). We attribute this primarily to lack of descriptive research in these areas.
The aim of this paper is to analyze to what extent corporate social responsibility (CSR) contributes to strong sustainability, i.e. to what extent the use of natural resources and the environment is possible, given the current level of economic activity. We therefore examine responsibilities that corporations should take in order to fulfil the requirements of strong sustainability. Based on current CSR practices and theory as well as on businesses motivations regarding environmental and social investments, we will introduce the role of corporations in influencing consumption patterns. Furthermore, we will attempt to answer to what extent responsible corporate behaviour is determined by the current economic system.
Societal responsibility is a much discussed topic today. However, this concept has undergone several developments. Currently, it is based on the theory of "stakeholders". Nevertheless, this approach becomes complicated when we take a company's responsibility vis-Ã -vis nature into account. This paper treats this problem and proposes a new interpretation of the stakeholder theory. The distinction between the interest in achieving a particular goal through a certain action and the interest in carrying out the action itself is at the heart of our discussion.
- A Mcwilliams
- D S Siegel
- P M Wright
McWilliams, A., Siegel, D.S. and Wright, P.M. (2006),
corporate social responsibility, Journal of Management Studies,
Vol. 43 (1), pp. 1-18.