Creating Shared Value From Corporate Social Responsibility Commerce Essay Example

stakeholders, generate profits, and stay competitive in a sustainable way (Savitz and Weber 2006:145). To achieve this, they can leverage material resources, cultural advantages, and stakeholder connections. Additionally, companies should aim for long-term economic success by avoiding socially detrimental or environmentally inefficient short-term practices (Porter and Kramer 2006:6). This can be accomplished by integrating CSR into core company strategies and incorporating it into the value chain to create shared value and gain a competitive edge over rivals (Porter and Kramer 2006:13). However, Blowfield (2008) argues that multinational corporations have different social responsibilities compared to small or medium-sized businesses.

Overall Purpose and Objectives The main goal of this study is to explore how CSR can enhance company value by meeting stakeholder expectations, achieving profitability, and remaining competitive in a socially acceptable manner.

Despite extensive research on Corporate Social Responsibility (CSR), its potential benefits for stakeholders and businesses in the value chain are often disregarded. Numerous studies prioritize gaining competitive advantages and profits, neglecting social needs. This study seeks to explore the impact of CSR on the value chain, with a specific focus on the supply chain's vital role in ensuring sustainability. To accomplish our research objective, we must fulfill the following goals:

The purpose of this research is to contribute to the existing literature on CSR patterns, with a focus on understanding its role in the supply and value chain and its impact on value creation. This study is relevant for business management students and academic researchers who want to explore CSR's significance in the supply and value chain.

Literature Overview: This literature review aims to identify crucial concepts related to CSR, provide definitions, and address key concerns within the

field. It also delves into examining the background as well as similarities and differences between the supply and value chains.

The concluding treatment will explore the relationship between value chains and CSR. This literature review specifically examines objectives 1 and 2 as mentioned above.

CSR Concept

CSR is not a new concept; it has existed for centuries. During the industrial revolution in the mid-1800s, companies began prioritizing the well-being and productivity of their employees, marking the early stages of CSR (Crane et al., 2008). However, CSR gained significant importance in the 1950s, known as the philanthropic era (Crane et al., 2008). One of the initial definitions of CSR was formulated by Howard Bowen, who connected business responsibilities with community expectations.

SR, or social responsibility, refers to the obligations of business communities to make decisions and take actions that align with the objectives and values of our society (Crane et al 2008: 25). According to Bowen, businesses must consider the impact of their decisions on communities, highlighting their social responsibility. In contrast, Milton Friedman holds a different perspective; he argues that management's only obligation is to maximize profits for shareholders (Friedman, 1970). This viewpoint supports the shareholder theory which states that directors are required to use corporate funds in ways approved by shareholders (Smith, 2003). Consequently, directors should refrain from allocating these funds towards unprofitable activities that do not enhance shareholder value. Nevertheless, Friedman acknowledges that directors must still adhere to society's fundamental rules while increasing profits for shareholders (Carroll, 1991).

However, individuals and groups are impacted by negative concern activities and operations. These stakeholders, both internal and external to the company, have obligations and responsibilities (Galbreath, 2009). The pyramid, which

attempts to summarize and categorize the many definitions of CSR into four categories - economic, legal, ethical, and philanthropic (Carroll, 1991). However, it gives the impression that economic responsibility is the initial step towards CSR. Once achieved, the following levels can be pursued, and philanthropic responsibility can only be accomplished once all levels are fulfilled. Secondly, ethical and legal responsibilities are pursued simultaneously with any activities aimed at profit maximization and cannot be practiced separately as often required by the law. Philanthropic responsibility can be considered voluntary, and companies are not obligated to contribute to communities; that should be the government's responsibility.

To simplify, the four grades can be further divided. The Triple Bottom Line (TBL) can be represented by the pyramid with the three Ps (Savitz and Weber, 2006). TBL, like Carroll's Pyramid, suggests that companies should not only focus on their bottom line but also on their social/ethical and environmental bottom lines (Meijer Schuyt, 2005), commonly known as People, Planet, and Profit. The diagram above shows that companies can prioritize any of the three Ps in any specific order depending on what is important for the company. With these three social responsibilities to focus on, companies should consider how it can be integrated into the business.

The Supply Chain and the value chain

This chapter will discuss the concept of the supply and value chain, as well as how economic, social, and environmental responsibilities are managed to benefit stakeholders and the company.

The supply chain, according to the Supply Chain Council (1997), is defined as "a term progressively used by logistics professionals it encompasses every attempt involved in bring forthing and presenting a concluding merchandise,

from the provider 's provider to the client 's client'" (Lummus Vokurka, 1999) (Lummus Vokurka 1999: 11). It involves a flow of goods (natural stuff) and services from multiple providers working together to fulfill the customer's needs at the end of the supply chain. The supply chain is a business process that is part of the value chain, as stated in Cox's definition (cited in Lummus Vokurka, 1999: 11), which describes it as "the function within and outside a company that enable the value chain to make products and provide services to customers". The value chain of a company consists of various activities related to designing, producing, marketing, delivering, and supporting its product (Porter, 1998).

The text emphasizes the significance of primary and support activities in generating economic and societal value within a company, as described by Porter (1998). This entails incorporating and practicing CSR through both the supply chain and value chain. The supply chain focuses on efficient processes from supplier/manufacturer to customer, while the value chain aims to provide stakeholders with value. By utilizing both chains, companies can address societal demands and issues, transforming them into opportunities to meet stakeholder expectations and achieve a distinct strategic position (Porter and Kramer 2006: 13). Previously, CSR activities mainly involved cash donations, charity work, and benevolence. However, Porter argues that these initiatives are not sustainable as they are typically unplanned and disconnected from company strategies (Porter Kramer, 2006).

Companies are increasingly realizing that long-term success requires creating financial and social value for shareholders and communities (Brabeck-Letmathe 2010). To achieve successful CSR, Nestle Chairman Peter Brabeck-Letmathe emphasizes the integration of CSR into the business strategy to create value for

stakeholders. This involves addressing unmet social needs of employees and communities to align with all stakeholders' values. Nestle implements 'Creating Shared Value' (CSV) as a CSR practice, focusing on social issues that provide long-term added value for both shareholders and the community.

Research Design and Methodology

According to Saunders et al (2003:3), research is a systematic process undertaken by individuals to gain knowledge.

The text discusses the importance of a research methodology that encompasses various aspects such as research design, data collection, analysis and presentation of findings, and acknowledging any limitations. To determine the most suitable approach and plan for conducting research, the researcher can follow the 'onion' research process developed by Saunders et al (2003: 83). This systematic approach allows for addressing research questions and meeting objectives effectively. The research methodology consists of five subheaders, starting with the research philosophy and ending with the data collection method at the center of the 'onion'.

Research Philosophy

This section focuses on how knowledge is acquired and developed. It recognizes three main philosophies: positivism, interpretivism, and pragmatism.

The Positivism research procedure tries to imitate the methods used in natural science and acts as an impartial analyst, gathering data from the external world in an unbiased manner (Saunders et al, 2003). This method aims to develop knowledge by breaking down complex phenomena into simple elements that represent general laws (Blumberg et al, 2005: 23). On the other hand, interpretivism is based on the subjective significance of human involvement (Saunders et al, 2003). Realism combines the doctrines of both positivism and interpretivism, but emphasizes the mistake of treating people as objects in the same way as natural science does (Saunders et al, 2003). In this

study, interpretivism will be adopted as the philosophical framework because corporate social responsibilities within the supply and value chain are complex and unique phenomena that cannot be generalized in an unbiased manner (Saunders et al, 2003). Moreover, social phenomena cannot be understood solely through facts, but also through the exploration of individuals' different experiences and how these differences contribute to the varying interpretations and meanings people assign to the social world (Blumberg et al, 2005:21).

Research attack This involves the usage of theory and the design of the research (Saunders et Al, 2003). The theory attack includes inductive and deductive whilst the latter involves qualitative and quantitative attack.

This approached is adopted for scientific research workers were by a hypothesis is deducted and tested strictly from a theory by the usage of the appropriate research scheme (Saunders et Al, 2003). For the tax write-off to be right it must be both true and valid (Blumberg et al, 2005). This involves constructing theory and specifying the hypothesis by 'observation of empirical informations' (Saunders et al 2003:479). This survey will hold an inductive attack with the purposes to understand why something is happening and to construct the theory by investigating CSR in the supply and inquire why it influences the value concatenation and so deduce a hypothesis that will reply the research inquiries.

The two methods discussed here are commonly used for gathering information, each serving different purposes. The quantitative approach focuses on collecting numerical data and figures exclusively, using computer programs to measure, analyze, and interpret the data (Saunders et al, 2003) (Zikmund, 2003). This method is particularly useful for descriptive and causal studies that rely on large-scale surveys

or electronic databases (Hair et al, 2003). In contrast, the qualitative approach involves gathering non-numerical information in the form of sentences or narratives (Blumberg et al, 2005).

The research worker has more control over the type of information gathered through taking or examining inquiries (Blumberg et al, 2005) or if collecting primary information through observation method, determinations can be taken on how and where the survey will take place (Blumberg et al, 2005). Typically this survey requires smaller samples or case studies and it is best suited for explorative studies (Hair et al, 2003).

Research strategy

Research strategy can be described as tool(s) utilised to answer the research questions. Saunders et Al (2003) identify six main strategies: experiments, survey, case study, grounded theory, descriptive anthropology, and action research. These strategies can be used depending on the research approach selected.

A case study is defined as 'a strategy for conducting research which involves an empirical investigation of a particular contemporary phenomenon within its real-life context using multiple sources of evidence' (Saunders et al 2003:93). In this research, a case study strategy will be used because it can provide answers to the 'why' and 'how' questions. According to Saunders et al, a well-constructed case study can challenge existing theory and provide the basis for hypothesis (Saunders et Al, 2003).

Time timelines

This involves deciding whether the research will be a "snapshot" taken at a point in time (cross-sectional) or a representation of events over a long period of time (longitudinal studies) (Saunders et al 2003:95). This research will use a snapshot approach or cross-sectional studies because it is not interested in 'change or development' (Saunders et Al, 2003) but rather at a point

in time where the supply chain and value chain are influenced by CSR practices.

Research purpose

Saunders et al states that research inquiries can be classified in terms of their purpose.

These categorizations include exploratory, descriptive or explanatory studies (Saunders et al, 2003). The purpose of this study is classified as an exploratory, aiming to find 'what is happening to seek new insight, to ask questions and to evaluate phenomena in a new light' (Saunders et Al, 2003). The exploratory study can be conducted using both qualitative and quantitative tools but relies mostly on qualitative approach (Blumberg et al, 2005).

Data collection methods

Data is collected depending on the nature of the research (Hair et al, 2003). As mentioned above, this study is explorative with the aim of exploring relevant literature and interviewing specialists on the topic (Saunders et Al, 2003). Exploratory research provides the secondary data and primary data needed for analysis. The research aims to make use of both secondary and primary data.

The former refers to information that has already been collected for other purposes and is classified as documentary information, survey-based information, and information compiled from multiple sources (Saunders et al, 2003). In this research, secondary data on CSR practices will be collected from relevant companies' websites. In contrast, primary data is collected for specific purposes through observation of people's behavior or through semi and in-depth interviews (Saunders et al, 2003). There are two methods for collecting primary data: observation and surveys. These methods can further be sub-divided into human and electronic observation, as well as self-completion and interviewer-administered surveys (Hair et al, 2003).

In this survey, primary information will be collected through interviewer administered studies

of individuals (Hair et Al: 125). This approach is especially useful in gathering 'valid and reliable data' (Saunders et al 2003: 245).

Interviews

The primary data can be collected from structured, semi-structured, and unstructured interviews. This study will utilize a semi-structured approach, which is commonly used in explorative research. This type of interview typically begins with specific questions but allows respondents to share their own thoughts afterward (Blumberg et al, 2005).

The interviewer has the flexibility to exclude or ask new questions based on the direction of the conversation or change the order of the questions to fit the flow of the conversation (Saunders et al, 2003). In qualitative interviews like this, data is collected through note-taking or tape-recording (Saunders et al, 2003).

Sampling

Sampling is a technique that reduces information by selecting only a part of the population instead of all possible cases or elements due to time constraints (Saunders et al, 2003). There are two approaches to selecting the appropriate sample: probability or non-probability sampling. In probability sampling, each case or element of the population has a known and non-zero chance of being randomly selected (Saunders et al, 2003: 486).

Within non-probability sampling, the probability of selecting each instance or component is unknown (Saunders et al., 2003). Non-probability methods include quota, purposive, snowball, self-choice, and convenience sampling. These methods are most appropriate for this survey as they allow for the selection of participants who can help answer the research questions and meet the set objectives. Non-probability sampling is employed when the researcher seeks to choose instances that are particularly informative (Saunders et al., 2003).

Data analysis and reading

Data analysis involves managing a large amount of

data collected by summarizing and organizing it in a meaningful format (Zikmund, 2003). According to Saunders et al (2003), there are two strategies for analyzing qualitative data: theoretical and descriptive frameworks. The first strategy, theoretical framework, involves analyzing data based on a deductive approach using existing theory to explain research questions. The second strategy, descriptive framework, uses an inductive approach to "start and guide the analysis of your data" (Saunders et al: 389) by transforming data into an easily interpretable form (Zikmund, 2003). This research will utilize the second strategy, descriptive framework, to organize the case study based on the description of general characteristics and relationships to the research questions (Yin, 1994).

Research Restriction
Restrictions need to be considered when conducting research. Instead of just focusing on a single case study, this research will examine multiple case studies. This approach is deemed more reliable in producing robust results (Blumberg et al 2005: 376). However, careful consideration is required in choosing the most suitable case studies for the desired purposes (ibid).

The research also utilizes a range of academic literatures and reputable publications. However, the literature mentioned may not include all of the most up-to-date sources. Despite access to other sources, the decision was made to focus primarily on certain literature, some of which dates back to 1991 and 2003. Therefore, the research design depends on the type of sources found.

According to Saunders et al., ensuring research design reliability and validity is essential (Saunders et al., 2003:100). Reliability means that the research can be characterized as dependable if it consistently produces the same error-free results (Saunders et al., 2003) (Zikmund, 2003).

Secondly, it is important that others also make the

same observation. Additionally, natural information needs to be interpreted in a 'transparent' manner (Saunders et al 2003:101). Evaluating the reliability of a research can be done through repeatability and internal consistency. Repeatability involves using the same 'scale or step' with the same respondents at different times to achieve the same result (Zikmund, 2003). If the results obtained at different times are different, this suggests a low level of reliability (Zikmund, 2003).

However, this trial is more suitable for longitudinal studies where there is little time constraint. Internal consistency involves the measurement of homogeneity, where all similar questions are grouped together in a questionnaire to measure the same construct (Zikmund, 2003).


Validity


On the other hand, this pertains to how data collection methods accurately measure what is intended to be measured and "whether the findings are truly about what they appear to be about" (Saunders et al 2003:101, 492). There are three tests to be used when testing quality of case studies: concept validity, internal validity, and external validity (Yin 1994: 33).

In this research, specific measures will be taken to enhance its cogency. To ensure that the concept is well understood and respondents can answer questions accurately, it is important to pilot test the questionnaire before conducting interviews (Saunders et al 2003: 308). Additionally, a tape recording device will be used to efficiently record data, allowing for full focus on the interview without the need for note-taking. The advantage of using a tape recording device is that the information can be replayed whenever necessary. Internal cogency pertains to explanatory studies, where the research aims to establish causal relationships between variables (Saunders et al, 2003).

This survey is explorative and the

cogency concerning internal factors is non relevant. External cogency focuses on determining whether the results of the case studies can be generalized and tested through reproduction in other research settings (Saunders et al, 2003; Yin, 1994).