This chapter is divided into two subchapters. First, we start with a general discussion of CSR by defining it and illustrating key concepts, and by demonstrating motives of its application and decision-making theories. Afterwards, we present corporate volunteering as a subcategory of CSR initiatives by pointing out its definition, purpose and benefits as well as positive examples of companies using CVPs.
Corporate Social Responsibility
Definition and concepts
Nowadays, corporations not only face economic challenges but also social and environmental pressure. It means firms have to take into account a wider context to protect the company’s reputation and therefore approach sustainable development (De Witte & Jonker, 2006). CSR as an emerging agenda has become a global trend because society has changed from locally oriented to globally oriented and from closed to open, so that organizations undertake more responsibilities in their businesses (De Witte & Jonker, 2006; Sahlin-Andersson, 2006). For business leaders all over the world, CSR has become inevitable priority (Porter & Kramer, 2006).
It can be seen as a tool to improve a company’s performance in both financial and non-financial perspectives. Financially, the company can attract more and/or different customers leading to increased profits as e.g. some customer groups pay closer attention on buying products which are responsibly manufactured or environmentally friendly (Crifo & Forget, 2015). Non-financially, stakeholder orientation can cause bigger commitment to the company e.g. employees make great efforts and are therefore more likely to remain in the firm. Not only can the retention of employees be a result of acting responsibly but also a better reputation of the organization (Aguinis & Glavas, 2012).
Because of the development of society and its evolving view on acting responsibly, the definition of CSR constantly changes and varies even from person to person, also due to different cultural or economic backgrounds.
For some it means that companies’ actions should obey the law, others see the value of social responsibility in a self-fulfilling point of view and act therefore voluntarily beyond the requirements (Cannon, 2012).
T r i p l e B o t t o m L i n e ( T B L )
One definition of CSR is linked to sustainable development which focuses on further economic improvement as well as people development (Blowfield & Murray, 2008). Sustainable development bases on a reasonable utilization of natural resources and a respectful treatment of the environment. In this concept, companies should consider financial, environmental and social performance equally in order to achieve sustainable progression. The combination of the three performances can be defined as “Triple Bottom Line” (TBL) creating a balance in contributing to the “3 Ps”: People, Profit and Planet (Valackienė & Micevičienė, 2013). “People” refers to the company’s stakeholders; “Profit” relates to business results, and “Planet” points to sustainable treatment of the environment (De Witte & Jonker, 2006). More specifically, firms have to consider their stakeholders for instance through maximizing shareholders’ value, satisfying customers’ demands and obtaining competitive advantage by simultaneously behaving responsibly. Aguinis (2011, p. 855) defines CSR as “context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance.” Within the process of earning profits, sustainable development also should be considered such as environmental protection, cultural advancement, business innovation and reputation improvement. Therefore, CSR has become an important challenge for organizations (De Witte & Jonker, 2006).
C a r r o l l ’ s p y r a m i d
Carroll (1991) generalized that “CSR encompasses the economic, legal, ethical and discretionary expectations that society has of organizations at a given point in time”, expectations that can be classified as four corporate responsibilities: economic, legal, ethical and discretionary/philanthropic (Schwartz & Carroll, 2003). In order to recognize different organizational responsibilities, Carroll (1991) developed the model following in Figure 2.1.
The so-called “Carroll’s pyramid” includes previously introduced four responsibilities. Economic responsibility is the base of the pyramid and refers to the fact that business generally aims at maximizing profits (Carroll, 1991). On top of the economic dimension one can find legal responsibility. It relates to the assumption that companies are expected to obey the law. Ethical responsibility is the second top dimension and concerns moral obligations, norms and practices in the organizational level (Carroll, 1991). The philanthropic dimension forms the top of the pyramid as it is considered as voluntary, not required action. The core is to be a good corporate citizen which means organizational actions should respond to societal expectations (Carroll, 1991). These four responsibilities should not only be embodied in the top-level management but also in the middle-level and even in the frontline to maximize the success of CSR. The responsibilities represent a company’s culture and values. The model of Carroll will be applied in the subchapter “Motives” because we categorize the drivers of implementing CSR initiatives according to it.
In this thesis motives and drivers are used interchangeably and illustrate the reasons for companies to act responsibly.
T h r e e – D o m a i n M o d e l b y S c h w a r t z a n d C a r r o l l
CSR research is constantly expanding and different views evolve and change. To show this development of theory we point out the advancement of Carroll’s pyramid. Schwartz and Carroll modified this model in 2003 to a three-domain approach consisting of the three core domains economic, legal and ethical responsibility by subordinating the philanthropic responsibility under the ethical and/or economic domain which better reflects possible diverging motivations. The following figure illustrates their new model.
Other reasons for developing a new model framework were e.g.:
- The possible but fallacious suggestion of a hierarchy of domains illustrated in the pyramid.
- The impossibility of capturing the overlapping nature of the domains.
- The confusion of researchers about the philanthropic category.
As one can see, the new model stresses the overlapping of domains very much by making it possible to differentiate between seven possible subcategories of acting. The ideal combination lies at the center of the model, meaning that a CSR activity fulfills all three domains at once (Schwartz & Carroll, 2003). The authors present examples for all categories e.g. under the economic/ethical domain come “social marketing” activities such as the policy of Ben & Jerry’s when giving out free ice cream. As all models, this one is not free of limitations. Schwartz and Carroll (2003) identify some of them e.g. that some categories seldom occur such as the combination of economic and legal but not ethical activities. Moreover, the question arises whether actions can be purely ethical, economic or legal. International companies can also have problems applying the ethical or legal standards as they must decide to comply with standards of either the home or the host country (Schwartz & Carroll, 2003).
C S R p e r s p e c t i v e s a n d s t r a t e g i e s
CSR combines internal and external perspectives of corporations. The internal perspective involves the individual level (e.g. entrepreneur, employee, manager) and the organizational level (e.g. culture, management, finance). The external perspective concerns the societal level (e.g. environment, community, government). CSR reflects a growing awareness of the impact of companies’ behaviors on these levels and connects stakeholders’ value to companies’ tasks (Cannon, 2012; Sahlin-Andersson, 2006).
Companies take responsibilities through designing CSR strategies which can aim at protecting the environment, enhancing organizational commitment, enlarging the competitive advantage, improving the reputation or even attracting and retaining employees (Bhattacharya, Sen & Korschun, 2008; Cannon, 2012; Saeidi, Sofian, Saeidi, Saeidi, & Saaeidi, 2015). Corporate social initiatives among CSR strategies refer to “major activities undertaken by a corporation to support social causes and to fulfill commitments to corporate social responsibility” (Kotler & Lee, 2005, p. 3). They can occur in six different types: socially responsible business practices, corporate social marketing, cause-related marketing, cause promotions, corporate philanthropy and corporate volunteering (Kotler Lee, 2005). The latter is of interest for us and will be explained in the second part of this chapter.
In our thesis we apply the stance of Valackienė and Micevičienė (2013) and define CSR as acting voluntarily beyond the laws and regulations in force by simultaneously balancing out People, Profit and Planet.
Decision-making about engaging in CSR can be influenced by many factors. As mentioned above, CSR initiatives are not only conducted for aiding reasons but also for profit-driven causes. Williamson, Lynch-Wood and Ramsay (2006) examined the drivers of environmental behavior in manufacturing small and medium-sized enterprises (SMEs) discovering that business performance and regulation promote CSR activities which are considered as optional and costly. Environmental action arises from gaining business benefits by doing so e.g. the reduction of energy consumption leads to cost savings (business performance argument) or from complying with existing regulations which produces greater levels of CSR action. Regulations can therefore assist in combining the company’s profit-oriented self-interest with fulfilling the interest of the society (Williamson et al., 2006). In contrast to these profit-driven causes, socially responsible SMEs implement CSR strategies because of moral and ethical beliefs (internal drive instead of external pressure), even though the firms identified business benefits as well (Jenkins, 2006).
According to Carroll’s pyramid of CSR, the company’s behavior and pursuit can be based on different responsibilities so that many motives of applying CSR initiatives arise (Agudo, Gargallo & Salvador, 2015). The motives can strongly influence the decisions for CSR activities. Due to legal and ethical responsibilities, duty, obligation, moral principles and ethical standards can promote the firms’ engagement in CSR activities (Aguinis & Glavas, 2012; Valackienė & Micevičienė, 2013). Because of a perception of economic responsibility, a large number of investigations show that profit is a driver for companies to implement CSR strategies (Schmitz & Schrader, 2015; Valackienė & Micevičienė, 2013). Not only the shareholders but also the investors can gain profit from CSR activities (e.g. saving energy leads to cost reduction and thus to increased profit) so that they have higher expectations on the outcome of activities. Other studies point out that welfare-oriented companies are willing to balance economic, social and ecological concerns on the account of the awareness of corporate citizenship and philanthropic responsibility (Dhanesh, 2014; Valackienė & Micevičienė, 2013). Therefore, three main motives can be derived through combining the pyramid with other CSR theory: compliance drivers, profit drivers and sustainability drivers.
2 Theoretical framework
2.1 Corporate Social Responsibility
2.2 Corporate volunteering
3 Methodology and method
3.2 Method, data collection and analysis
3.3 Credibility of findings
4 Empirical findings
4.1 Corporate Social Responsibility activities
4.2 Range of corporate volunteering programs
4.3 Ways for employees to engage
4.4 Company support
4.6 Motives and benefits
5.1 Motives for applying corporate volunteering
5.2 Comparison of CSR and CVP motives
5.3 Main considerations in decision-making
5.4 Model about decision-making
List of References
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Decision-making in corporate volunteering Motives for the application of corporate volunteering programs