Leadership and Corporate Social Responsibility

Abstract

Leadership and Corporate Social Responsibility (CSR) are some of the most widely studied topics, generating an extensive literature. Nowadays, leaders are facing economic, social and environmental challenges. Unfortunately, today trust in business is low. In this complex global environment of uncertainty and ambiguity, leaders have to anticipate the changes and to be catalysts for shifting their organizations towards a sustainable society. The purpose of the present paper is to investigate leaders’ opinion regarding: Corporate responsibilities (Carroll’s’ four-layered pyramid model); Reasons for CSR actions/ projects; Areas of interest for CSR projects/ activities/ initiatives. Taking into account the growing interest towards a sustainable society is a need for a new type of leadership that promotes the CSR’s ideals.

Full text

International Conference KNOWLEDGE-BASED ORGANIZATION
Vol. XXIII No 1 2017
LEADERSHIP AND CORPORATE SOCIAL RESPONSIBILITY
Hortensia GORSKI
Romanian-German University, Sibiu, Romania
hortensia.gorski@roger-univ.ro
Abstract: Leadership and Corporate Social Responsibility (CSR) are some of the most widely studied
topics, generating an extensive literature. Nowadays, leaders are facing economic, social and
environmental challenges. Unfortunately, today trust in business is low. In this complex global
environment of uncertainty and ambiguity, leaders have to anticipate the changes and to be catalysts
for shifting their organizations towards a sustainable society. The purpose of the present paper is to
investigate leaders’ opinion regarding: Corporate responsibilities (Carroll’s’ four-layered pyramid
model); Reasons for CSR actions/ projects; Areas of interest for CSR projects/ activities/ initiatives.
Taking into account the growing interest towards a sustainable society is a need for a new type of
leadership that promotes the CSR’s ideals.
Keywords: Corporate Social Responsibility (CSR), leadership, business ethics
1. Introduction
Nowadays, organizations are facing
economic, social and environmental
challenges: globalization, economic recession,
population growth (overpopulation),
exploitation of natural resources, extreme
poverty (rich-poor gap), unprecedented
inequality, global migration, religious
extremism and terrorism, geopolitical and
ecological crises, global warming and its effect
on climate change, environmental issues,
competitive pressure, health issues, new
information and communication technologies,
sustainable lifestyle and so on. In this context,
taking into account all these complex
challenges, sustainable development and social
responsibility are very “hot” topics. In the age
of sustainable development, there is a need for
“a holistic framework, in which society aims
for economic, social, and environmental
goals” [1]. The challenge for the companies is
to incorporate ethical, social and
environmental values in their business
practice.
“A firm takes on a visible role in the society
which goes beyond the core business and
beyond what the law requires and which
leads to added value for the company and
the society“ [2].
Leadership and Corporate Social
Responsibility (CSR) are some of the most
widely studied topics, generating an
extensive literature. This paper discusses the
important role of leadership in implementing
CSR practices, taking into account the
growing interest towards business ethics.
Nowadays, leaders are facing economic,
social and environmental challenges. Rapid
pace of change is forcing leaders to find
creative and innovative solutions to cope
with multiple stakeholders, whose interests,
needs and requirements could sometimes be
in conflict. Unfortunately, today’s trust in
business is low. In this complex global
environment of uncertainty and ambiguity,
leaders should anticipate the changes and act
as catalysts for shifting their organizations
towards a sustainable society.
DOI: 10.1515/kbo-2017-0061
© 2017. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.
372

Taking into account not only the economic,
but also the environmental and social
challenges of the 21st century, a new type of
leadership that promotes the CSR’s ideals is
needed.
2. Some Corporate Social Responsibility
(CSR) trends
Corporate Social Responsibility has
become “one of the (new) organizational
challenges over the past decade, certainly
when viewed from the perspective of the
growing needs and obligations for
sustainability” [3]. Although there is a rich
literature on CSR and there are many
available definitions, the concept is still
difficult. There is a lot of confusion
because, both in theory and practice, there
are a lot of different terms which overlap
with, are connected or synonymous with
CSR, such as “corporate citizenship,
sustainable business, environmental
responsibility, the triple bottom line; social
and environmental accountability; business
ethics and corporate accountability” [4].
Different perceptions of CSR have
generated a series of misunderstandings and
have created for organizations barriers in
the way of approaching CSR opportunities
and challenges. Different authors and
numerous international organizations,
including in particular the European Union,
have examined and classified the concept
and theories of corporate social
responsibility (CSR), and have interpreted
it in different ways [5], [6].
Alexander Dahlsrud underlined that
“Despite numerous efforts to bring about a
clear and unbiased definition of CSR, there
is still some confusion as to how CSR
should be defined” [7]. In order to study
the similarities and differences between
the available definitions, Dahlsrud analysis
the content of 37 definitions of CSR and
identified five dimensions: the stakeholder
dimension, the social dimension, the
economic dimension, the voluntariness
dimension, the environmental dimension.
Carroll has proposed and developed, one of
the most elaborate, complete and most
widely accepted CSR model [8], [9] further
employed by many researchers. In the four-
layered pyramid model, corporate social
responsibility has been described as a
multilayer concept with different
responsibilities: economic (to gain profits);
legal (to obey law), ethical (to act rightly,
justly, honestly) and philanthropic (to be a
good citizen). Chandler and Werther also
emphasize the importance of addressing
different arguments for CSR – “ethical,
moral, national, and economic“ [10]. “A
business needs a successful community, not
only to create demand for its products but
also to provide public assets and a supportive
environment. A community needs successful
business to provide jobs and wealth creation
opportunities for its citizens”[11].
Businesses are the engine of society. Philip
Kotler and Nancy Lee focus their CSR
definition on voluntary business
commitment and on the importance of
doing good. They consider that “corporate
social responsibility is a commitment to
improve community well-being, through
discretionary business practices and
contributions on corporate resources” [12].
3. Leadership and CSR
The 21st century world is shaped by leaders.
Keith Grint considers that “Leadership, or
the lack of it, seems to be responsible for
just about everything these days” [13].
Leadership is a very complex concept. Over
time, many definitions have been developed
and there is no consensus on a universally
agreed definition. There are “almost as
many definitions of leadership as there are
persons who attempted to define the
concept” [14].
In order to build a sustainable world,
intersection of leadership and ethics is a
must. Leadership has a vital role in
promoting an ethical and moral behaviour.
Moreover, leaders should be models for the
followers and should aim to shape
organizations by their own values and
characteristics. Employees rely on their
leaders for guidance when faced with ethical
dilemmas [15]. Leaders’ behaviour should
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be “visible and consistently ethical, both
internally and externally to the organization”
[16]. Moreover, “excellent companies do
more than talk ethics, they take positive
steps to address ethical issues and apply the
practical tools of ethics in their management
practice” [17]. Ethics has “a central role in
the practice of leadership” [18]. Nowadays,
there is a higher need for ethical leaders and
transparency in business processes.
The role of Corporate Social Responsibility
(CSR) is “to restore one of the most critical
resources for businesses’ sustainability:
trust.” Companies choose to incorporate
CSR into their businesses for different
reasons. It is important to “distinguish
between activities for gaining popularity
and those which gain trust” [19]. Trust,
ethics, CSR and leadership are interlinked.
Nowadays, “too often, executives have
viewed corporate social responsibility
(CSR) as just another source of pressure or
passing fad” [20]. Corporate Social
responsibility is an ethical framework.
Leaders and organizations engaged in CSR
act for the benefit of their stakeholders –
employees, customers, suppliers,
community and society at large. CSR
requires the use of non-coercive influence
and “soft power” which again are specific
to leadership [21]. Leaders have a crucially
significant role in adopting and practicing
CSR in their organizations [22].
4. Research methodology
This paper is part of a more comprehensive
study regarding leadership, ethics and CSR.
4.1. Scope, sample, data collection and
data analysis
The purpose of the present paper is to
investigate leaders’ opinion regarding CSR
practices/ activities.
In order to validate the initial hypothesis, a
research based on a questionnaire has been
conducted in 2016, taking into consideration
the population of private companies
(microenterprise, SMEs, and large
enterprises) from various sectors in Sibiu
County. Most of the questionnaire’s items
were presented using a five-point Likert
scale. The survey was unconcealed, the aim
being known from the beginning by the
respondents – senior and middle managers
with significant influence on their
companies’ operation. For the purpose of
this study the disproportionate variant and an
availability sample (the sample subjects do
not correspond to their statistical reality in
terms of percentage in total employers from
Sibiu County) have been used. Using an
availability sample, the survey has given
more importance to large, medium and small
firms, than to the group of microenterprises
(without eliminating these).
Before administration, the questionnaire was
tested on a panel of 8 managers/ leaders
(representatives of micro, small, medium and
large enterprises). Data were processed,
analysed and presented using IBM SPSS
Statistics 19 for Windows package program
and Microsoft Excel 2010.
4.2. Findings and research’s results
• Companies’ responsibilities
The Carroll’s multi-layer CSR pyramid, was
employed in this study. Each of these four
categories was ranked on a Likert scale (From
1 – No importance to 5 – Very important).
 Economic responsibilities (being
profitable; maintaining high level of
efficiency; producing good quality
products/ services; creating assets);
 Legal responsibilities (not breaking the
laws; obeying the laws; behaving in the
spirit and letter of law);
 Ethical (Business ethics; Personal ethical
awareness);
 Philanthropic responsibilities (contribution
to the internal and external community for
improving the quality of life; material,
financial and human resource contribution
– charity and volunteering).
As we can remark in figure 1, economic
responsibilities were evaluated as being most
important (4.57), followed by the legal
responsibilities (4.21) and ethical
responsibilities (3.94). The philanthropic
responsibilities were perceived by managers
as last important to business (3.44).
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Figure 1: Type of responsibilities
• Reasons for CSR actions/ projects
The most important reasons for managers’
engagement in CSR actions/ projects are: the
legal pressure (4.16) and the interest in
attracting and maintaining talents (4.02) –
figure 2. Investigated leaders consider that
CSR practices are generating a neutral to
important influence on companies’ visibility
& image improvement (3.35). In the
respondents opinion, the market (customers,
suppliers) exert only a small to neutral
pressure (2.79) for implementing CSR
practices. Another revealed aspect is that
ONGs and the community also exert only a
small to neutral pressure (2.46 respectively
2.57) for CSR investments. Although many
respondents consider that companies should
have ethical responsibilities to their
employees, customers and society as a whole,
they sustain that nowadays business ethics
arguments have only a small to neutral
influence on companies’ behavior (2.92). In
the current research, the economic reasons for
investing in CSR are ranked on the last place.
Respondents consider that CSR practice
generate only a small influence (2.45) on the
company’s economics (profit, return of
investment, assets).
Figure 2: Reasons for CSR practices
a – Market pressure (clients, suppliers);
b – Community pressure;
c – ONG pressure;
d – Business ethics arguments;
e – Legal pressure;
f – Economic reasons;
g – Image improvement (visibility);
h – Attract and retain the best employees
(talents).
• Areas of interest for CSR projects/
activities/ initiatives
Regarding the four areas or pillars of CSR,
we can observe (figure 3) that Workplace is
considered as being the most important
(4.16), followed by Marketplace (4.12) and
Environment (3.58). Community
engagement received the smallest interest
(3.05) and is not associated enough with
core business concerns.
4,56
4,21 3,94
3,44
0,00
1,00
2,00
3,00
4,00
5,00
Economic
responsibility
Legal
responsiblilty
Ethical
reponsibility
Philanthropic
responsibility
2,79
2,57
2,46 2,92
4,16
2,45
3,35
4,02
0
1
2
3
4
5
a
b
c
d
e
f
g
h
375

Figure 3: CSR areas/ pillars
4. Conclusions
The presented results should be linked with
the other findings of the study regarding
leadership, ethics and CSR.
Fortunately, investigated leaders
understood the importance of providing
employees with a safe, fair and inclusive
workplace, in order to attract and maintain
talents (the best employees). Respondents
are aware of the companies’ economics and
legal responsibilities, but place
philanthropic companies on the last place.
Companies may shirk philanthropic issues
because it may not seem as important.
Investigated leaders take into consideration
workplace, marketplace, and even
environmental issues, but community
engagement is not considered relevant
enough for their business. Unfortunately,
leaders don’t perceive at the right value the
wide range of benefits generated by
working with their local community. In the
age of responsibility, leaders should
understand that companies are being part of
the society and social issues have an
important relevance for their business.
Leaders should both volunteer and
encourage employees to volunteer for
community and make charitable donations.
Ethical issues, and community engagement
should be more associated with long term
business success.
Taking into account the growing interest for
a sustainable society, a new type of
leadership that promotes the CSR’s ideals is
needed.
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