CHAPTER 2: REVIEW OF RELATED LITERATURE
LOCAL RELATED LITERATURE
INTERNATIONAL RELATED LITARATURE
DEFINITION OF CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is not a new idea. Despite acceptance of the term CSR,
a universally agreed definition does not exist. According to the World Business Council for
Sustainable Development (WBCSD):
“Corporate Social Responsibility is the continuing commitment by business to contribute
to economic development while improving the quality of life of the workforce and their
families as well as of the community and society at large.”
In this time, a large number of companies engage in activities demonstrating their Corporate
Social Responsibility as part of their routine operation. According to European Union (Green
Paper ‘’Promoting a European framework for corporate social responsibility):
“A concept whereby companies integrate social and environmental concerns in their
business operations and in their interaction with their stakeholders on a voluntary basis.”
It is generally agreed that CSR involves corporations voluntarily exceeding their legal duties to
take account of social, economic and environmental impacts of their [Link] to
Forum of Experts on CSR of the Spanish Ministry of Labour and Social Affairs:
“Social Responsibility in Enterprises is, besides the strict compliance with the legal
duties in force, the voluntary inclusion in its governance and management, in its
strategy, policies and procedures, of the social, work-related and environmental
concerns, as well as those concerning the respect to human rights that arise in the
transparent relationship and dialogue with its stakeholders, in this way taking on the
responsibility for the consequences and impacts of its actions. An enterprise is socially
responsible when it satisfactorily answers to the expectations of the different
stakeholders in its operation. CSR is a concept whereby companies integrate social and
environmental concerns in their business operations and in their interactions with their
stakeholders on a voluntary basis" (European Multistakeholder Forum on CSR, 2004: 3)
CSR is coming out of the purview of “doing social good” and is fast becoming a business
necessity. Corporate Social Responsibility is a voluntary commitment by companies from their
social composition to develop society and preserve the environment and responsible behavior
towards persons or social groups with whom they interact. Such social responsibility focuses on
satisfying the needs of interest groups by means of specific strategies, whose results must be
appropriately measured, verified and notified. Hence, social responsibility goes beyond merely
complying with legally established regulations and securing exclusively economic results in the
short term.
MISCONCEPTIONS ON CSR (Instrumental/Normative Debate)
A great deal of CSR literature is concerned with the perceived dichotomy of the normative and
instrumental approaches. Much of the literature promotes the 'business case' for CSR with
many claiming that "ethics can be good for business" (Swain in The Independent, 2007). CSR is
understood to be a means of distinguishing and protecting brands and creating trust, and to
attract and retain both potential employees and consumers. It is argued that CSR needs to be
made relevant to the concerns of business people by emphasizing and focusing on this
'instrumental' approach:
"CSR needs to be reconstructed in an instrumental linguistic praxis to be meaningful to
managers in their day-to-day pursuits of organizational goals and objectives" (Amaeshi
& Adi, 2006: 3)
Beesley & Evans (1978) suggest that governments should promote CSR through taxation and
regulation to ensure that it is profitable for corporations to pursue CSR, and that it is only an
achievable goal if competitive pressures are removed. However, those who take a normative
approach express the concern that an instrumentalist approach diminishes the underpinning
ethical principles of CSR:
"Many HR advocates resist any arguments to the effect that a corporate HR agenda is
'good business' because that argument commodifies basic principles of human dignity
and thus surrenders the moral high ground. In this view, corporations should protect
human rights because it is the right thing to do, whether it is profitable or not" (Steinhardt
in Alston, 2005: 179)
In effect, the normative/instrumental debate rests upon different notions of what the 'bottom line'
of business might be. The different approaches themselves can be understood to be
"underpinned by substantively differentiating, relative logics of emotional rationalism on the one
hand, and instrumental rationalism (rational choice) on the other" (Amaeshi & Adi, 2006: 1).
Interestingly, Reinhardt (in Hay et al, 2005) notes that the normative and instrumental
arguments are often used simultaneously. For example:
"CR involves a change in company motivation. This may stem from the ethical attitudes
of the managers in an industrial company, or...from an awareness that the company's
own interests are best served by an enlightened policy" (Beesley & Evans, 1978: 35)
It is clear that there is interplay between the two approaches, with normative understandings of
ethical business informing instrumental approaches, and different ways of conceptualizing CSR
seem to be used to suit different contexts or audiences in order to 'sell' the idea.
It is argued that an instrumental approach would only involve acting ethically as long as it was
profitable to do so, whereas a normative approach suggests a more consistent ethical
performance (Gond & Matten, 2007). Research demonstrates that the driving force for
corporations to adopt CSR values is often catalyzed by particular events. Cassell (2001)
suggests that, for the most part, the adoption of voluntary codes by MNEs came "only after
embarrassing public exposes of sweatshop conditions" and, further, that "the resulting voluntary
codes have been weak and their enforcement even weaker" (2001: 268) suggesting that there
has been as little commitment as possible. In such cases, an instrumental approach would
seem to have been inadequate in ensuring genuine commitment to socially responsible
business practices. In practice, whether or not CSR is employed normatively or instrumentally
by individual corporations seems likely to be differentiated according to context. As will be
discussed in the following section, different approaches in particular are related in the literature
to different conceptions of the role of corporations as well as to differences in personal values.