Literature review: Corporate Social Responsibility

Discuss about the CSR Responsibility Of The Company.

With the increasing globalization and modernization, it has become necessary for organizations to carry out corporate social responsibility and work sustainably according to the needs of the environment. It is becoming a standard feature in all the small and large companies. The environment of the business is degrading day by day. Thus, it is necessary that they carry out their daily operations in a sustainable manner (Brown 2013). This will not only help the company grow in a sustainable manner and increase the trust of the citizens towards them. Corporate Social responsibility is also termed as corporate self-regulation that is integrated in the business model of the company. The company to get profitability also does the CSR responsibility of the company. There are evidences showing that CSR helps to increase the profit of the company in long run. It is also noticed that the firm that wants to increase their reputation by being socially responsible usually carries out the CSR (Korschun, Bhattacharya and Swain 2014).

It is seen that while implementing CSR in their daily operations the company needs to formulate a sustainability report stating the steps they will take and its effectiveness of those steps. However, many people influence the making of good sustainable report for the company. The people that broadly influence the making of a sustainability report are the top managers and the managerial share ownership such as the stakeholders (Costa and Menichini 2013). The influence on CSR by the stakeholder shows that knowledge the stakeholder hold about the organization and their views about the social responsibility it has to the society. The stakeholders and the top managers are voluntarily encouraging the implementation of CSR through a proper structuring of the sustainable report. They are also influencing the behavior by investing a lot of their capital. On the other hand, it is seen that CEO of the company influence the CSR through its own personal behavior. On the other hand, it is believed that a firm carries out CSR in order to increase the value of the stakeholders. However, the CSR strategy followed by the company depends on the needs of the stakeholder and other holders of the company. Thus, it is necessary that the managers of the organization act as leaders and formulate the sustainability report of the firm. Thus is because stakeholders are very important for the firm and important member of the company such as the CEO should take any decision related to them (Huang 2013).

Effectiveness of Sustainability Report

The paper will discuss about the relationship between that stakeholders and the top management of the company in designing the sustainability report for successful implementation of CSR. It will further carry out literature review on this ground o show the relationship between CSR and managerial share ownership. For the research purpose, a hypothesis is drawn and the methods to collect the data and follow further analysis are stated.

Enterprises should not only focus on being profitable but also focus on being environmentally responsible organization for their citizens. Thus, it becomes necessary for the enterprises to take up corporate social responsibility tool for their business. However, the corporation needs to form a proper structure for implementing CSR in their company that should help them rise above eh standard (Tai and Chuang 2014). Further, it has been described that CSR is a way of embracing the responsibility of the entity and the processes by which the activities of company is carried out in a sustainable manner. CSR ensures that the activities done by the company should a positive impact of the environment and on its stakeholders. Corporate Social Responsibility is a global issue and its put forward by all types of company with a aim of earning high profit and value (Tai and Chuang 2014). On the other hand, Crane, Matten and Spence (2013) states that the increasing effect of global economic crisis has gave way to implementing CSR in the business processes. This has made CSR a popular management process in the business. Thus, companies are creating corporate social responsibility report to let the people know about the steps they are taking for the society. Further, it has been noticed that the idea of CSR has expanded from just recycling and multiple usage process. Altogether CSR has been described a social responsibility of the business including the legal, ethical and other economic expectation of the society from it over the time (Crane, Matten and Spence 2013).

Fernandez-Feijoo, Romero and Ruiz (2014) has described that the company should take up effecting sustainability report formulation for CSR activities. This is because sustainability report works as a transparent communication tool through which they can convey their social responsibility to the investors and other stakeholders of the company. The amount fo transparency put in the sustainable report depends on the pressure from the stakeholders of the company. Moreover, the company has to keep a link between them and the stakeholders because the stakeholders always affects or gets affected by any operation taken by the firm. Thus, their involvement in the formulation of CSR is necessary. However, the increasing transparency of the sustainability report of the firm has various consequences such as increases complexities, conflicts and others. This is because all the stakeholders gives importance to their own benefits and needs rather than on the whole company (Ioannou  and Serafeim 2016).    

Impact of managerial share ownership on sustainable report

To carry out successful CSR practices in the organization the entity should structure out a sustainable report. The preparation of this sustainable report requires guidance and involvement by various stakeholders and top management of the company. Stakeholders and the top managers of the company such as the CEO have different views regarding the determinants that influence the implementation of CSR practices. Park and Ghauri (2015) in their paper have described the determinants influencing the implementation of CSR and the sustainability report from the stakeholders’ point of view. The process of implementing and carrying out a successful CSR strategy in an organization is very complex and is considered as a voluntary decision between the social concerns of business processes and meeting the expectations of the stakeholders. It has been further analyzed that the stakeholder theory has helped in adding values to CSR and a new type of thinking on corporate responsibilities. The common stakeholders of the company are the consumers, the internal managers, suppliers, government and investors. They are considered as primary stakeholders of the organization. For example, the policies made by the government play a great role in encouraging the entities to take up corporate social responsibility. On the other hand, managers directly influence the decision of the company with regards to internal activities such as the remuneration policy, trade unions, work conditions and others. They are the one that help business to carry out CSR for the active stakeholders of the company (Park and Ghauri 2015). According to Plewa et al. (2015) corporate volunteering plays a crucial role in shaping the perception of the consumers towards the CSR practices of the organization. It is deemed to put a positive impact on corporate social responsibility practice. Corporate volunteering is increasing in the world and is accepted as one of the fastest growing CSR activity.

Tang et al. (2015) has described CSR as an initiative taken by firms to improve their activities concerning social responsibility and according to the interest of the stakeholders. One of the most important person of the company that is the CEO influence the decision of the stakeholders in carrying out an effective CSR activities for the well being of the company. It has been seen that the nature and confidence of the CEO put a direct impact on firm’s decision to take up effective corporate social responsibility or not. It is solely the decision of the company’s CEO to indulge in socially responsible or irresponsible activities in short and long run (Manner 2010). Company’s involvement in CSR activities and formulation of sustainability report also depends on a large extent on the top managers of the company. They are the one that formulated the policies in the sustainability report after taking all the suggestion of company’s stakeholders (He, Chen and Chiang 2015). Thus, it is stated that the company’s capabilities of taking up CSR activities depends o the education, working experience, family or non-family working culture.

Hypothesis is one of the essential parts of the report as it helps the researcher to know the potential answer they can get from the research question. Hypothesis is considered as a prediction made by the researcher based on past literature. A hypothesis consists of a research question, objective of conducting the research, a null hypothesis and an alternative hypothesis. There are two possible outcomes of the research stated in the hypothesis such as the predicted result and the other stating all the possible outcomes.

The first one is known as the Null Hypothesis and the other one is known as the Alternative hypothesis. Null Hypothesis is always related to the statement of the question to be answered. Further, the final answer is also denoted in terms of Null Hypothesis. For example, we can either accept the Null Hypothesis or reject it depending on the result. However, it can also be possible that we neither reject nor accept the Null Hypothesis ad states that ‘do not reject Null Hypothesis’. This does not mean that Null Hypothesis is true. It only suggests that insufficient information has occurred in the research leading to no result (Rossi, Wright and Anderson 2013).

Does the stakeholder influence the decision taken by the top management of the company while preparing the sustainability report for the implementation of Corporate Social Responsibility?

• To analyze the importance of corporate social responsibility in a company
• Effectiveness of sustainability report
• To analyze the decision of the stakeholders while formulating sustainability report
• To analyze the influential effect of top managers in the formulation of sustainability report
• To analyze the influential effect of stakeholders on the decision of the top managers such as CEO

H₀– stakeholders effect the decision taken by the CEO while formulating sustainable report

H₁– stakeholders does not influence the decision taken by the CEO in the formulation of sustainability report.

The research method used for the research of influence of managers and stakeholder of the company on the CSR policies will be a qualitative method via a survey. This is because a survey method is very effective in collecting information over huge population. Further, the survey will be conducted with the help of simple random sampling and by effective analysis of the sampling results will be denoted. The sampling for data collected will include 20 companies of Melbourne and each company’s perspective regarding the influence of top managers on sustainability report will be known (Best and Kahn 2016). The survey will be done with the help of a questionnaire through which data will be collected on various grounds that will make it easy to analyze the result. Questionnaire prepared for this purpose will include both open ended and close-ended questions. The close-ended questions will allow the respondent to answer between two given alternative. However, the respect can also share their views through the open-ended question. Further he responses given by the taken number of samples will be analyzed to evaluate the view of the companies regarding formulation of sustainability report for CSR (Verma Singh  and Smarandache 2014).

As mentioned above the research will be conducted on the basis of a questionnaire and further analysis will be done on the answer derived. The questionnaire will be distributed to companies taken in the sample with the help of physical questionnaire or on their office mail as soft copies. This will allow all the members of the company to take effective participation in the survey. Mail is a good way of sharing the questionnaire and collecting the data as internet is being used on a wide range nowadays. Collecting the data through questionnaire is effective because it is free from biasness, covers large data in a single time and it can be used by anyone not familiar with these tasks. Moreover, it also allows the respondents to give their views as well through the open-ended questions (Bryman and Bell 2015).

Collection of data will be done by both primary and secondary research. Primary research is a way by which the researcher collects data directly from the primary source. In this research, the researcher will collect primary data from the companies implementing CSR strategy. The collection of data will be done by distributing questionnaire via mail or physically going to the company. The participants of the questionnaire such as the managers and other stakeholders will be asked to fill the questionnaire independently. They are expected to give all their answers truly and with patience after understanding the crucial effects of their answers. On the other hand, secondary research will be conducted by viewing the past data and evidences about the influential effect of top managers on the implementation of sustainability report. The result of the research will be given in a descriptive way so that is can be easily understood by everyone (Hair  2015).

While conducting the research, the researchers are met by different variables that manipulates their behavior and has an effect on the result of the research. Variables can be dependent, independent, moderate or intervening. The variable used in this research will be dependent variable, which is of primary interest to the researcher. The variable in this research are the top managers, the stakeholders of the companies and the sustainability report. These variables are interdependent on each other and are influenced by each other. The decision taken by the top managers and the stakeholders influence the result of sustainability report. On the other hand, the formulation of the sustainability report and the CSR initiative of the company affect the existence of managers and stakeholders both externally and internally. This shows that the variables of the company are dependent on each other. Thus, the research takes into account the dependent variables (Lee 2013).

Conclusion

From the above research, it can be deduced that the literature on the implementation of CSR by the companies has shown that the decision of formulating a sustainable report is influenced by the decision of the CEO and the needs of the stakeholders. The stakeholders of the company both internal and external are affected by the operations done by the company. Thus, it is important to include their decision while making the sustainability report. For the research two hypotheses, statement has been given by which the result will be denoted. Further, the research will be conducted with the help of primary and secondary research. The primary research will be done with the help of questionnaire and distributing them among twenty companies. For the purpose, a simple random sampling method will be chosen to make the task easy for the researcher. Thus, a qualitative analysis will help the researcher to find the effect of stakeholders and manager’s decision on the sustainability report of the firm. Result will be denoted in a descriptive way to make it easily understood by everyone.

References

Best, J.W. and Kahn, J.V., 2016. Research in education. Pearson Education India.

Brown, D.H., 2013. Corporate social responsibility.

Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.

Costa, R. and Menichini, T., 2013. A multidimensional approach for CSR assessment: The importance of the stakeholder perception. Expert Systems with Applications, 40(1), pp.150-161.

Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.

Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Effect of stakeholders’ pressure on transparency of sustainability reports within the GRI framework. Journal of Business Ethics, 122(1), pp.53-63.

Hair, J.F., 2015. Essentials of business research methods. ME Sharpe.

He, L.J., Chen, C.J. and Chiang, H.T., 2015. Top manager background characteristics, family control and corporate social responsibility (CSR) performance. Journal of Applied Finance and Banking, 5(1), p.65.

Huang, S.K., 2013. The impact of CEO characteristics on corporate sustainable development. Corporate Social Responsibility and Environmental Management, 20(4), pp.234-244.

Ioannou, I. and Serafeim, G., 2016. The consequences of mandatory corporate sustainability reporting: evidence from four countries.

Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.

Lee, M.J., 2013. Methods of moments and semiparametric econometrics for limited dependent variable models. Springer Science & Business Media.

Manner, M. 2010. The impact of CEO characteristics on corporate social performance. Journal of Business Ethics 93(Supplement 1): 53–72.

Park, B.I. and Ghauri, P.N., 2015. Determinants influencing CSR practices in small and medium sized MNE subsidiaries: A stakeholder perspective. Journal of World Business, 50(1), pp.192-204.

Plewa, C., Conduit, J., Quester, P.G. and Johnson, C., 2015. The impact of corporate volunteering on CSR image: A consumer perspective. Journal of Business Ethics, 127(3), pp.643-659.

Rossi, P.H., Wright, J.D. and Anderson, A.B. eds., 2013. Handbook of survey research. Academic Press.

Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.

Tang, Y., Qian, C., Chen, G. and Shen, R., 2015. How CEO hubris affects corporate social (ir) responsibility. Strategic Management Journal, 36(9), pp.1338-1357.

Verma, H.K., Singh, R. and Smarandache, F., 2014. A family of median based estimators in simple random sampling. arXiv preprint arXiv:1408.3362.