Criticism, Theories and Analysis of Corporate Social Responsibility Essay Example

in the field have expressed opposing views on its relevance to business. For instance, renowned American economist Milton Friedman argued in his influential 1970 New York Times Magazine article that "the only social responsibility of businesses is to increase profit." Consequently, corporate social responsibility has been seen as a powerful and effective watchdog over multinational corporations. However, when corporations are encouraged to prioritize CSR, they deviate from their primary goal of profit. Although this may not have an immediate impact, in the long run, focusing on CSR may negatively affect the economy as generated profit decreases and overall wealth declines.

Corporate Social Responsibility Theories

Since the inception of the concept of corporate social responsibility, there have been various theories both supporting and opposing its implementation. These theories include the following:

Corporate Citizenship theory: This concept pertains to the roles and responsibilities of corporations towards society. It depicts corporations as members of society who have obligations towards it. For example, in 2003, the court case Nike V Kasky revolved around Nike's public defense of its actions through letters to the editor, press releases, and other public statements, in response to allegations of utilizing sweatshop labor.

The concept of "Stakeholder Theory" focuses on the ethics and values involved in managing a corporation. It emphasizes that corporations should not solely prioritize profit, but also consider the environmental and social impact of their operations.

On the other hand, "Stockholders Value Theory" states that corporations have a duty to maximize shareholder profit and wealth. However, this theory overlooks other philanthropic factors and societal reactions towards such corporations.

Factors Influencing Corporations' Pursuit of CSR

Various scholars and researchers have studied corporate social responsibility (CSR) and found that different

companies are motivated by different reasons. One significant factor is the desire for businesses to distinguish themselves from competitors. Research has indicated that companies engage in CSR practices to attract and retain more customers.

In response to growing competition in the global business market, businesses are using different strategies to attract more customers. One strategy being utilized is the implementation of corporate social responsibility (CSR) initiatives, which not only grab public attention but also improve overall performance. The pursuit of maximizing profits has become a major motivator for businesses, prompting them to adopt ethical and sustainable social practices in order to enhance their reputation. A recent trend among corporations is shifting focus from promoting products and services to enhancing both reputation and value. An example of this occurred in 1995 when Shell's actions were brought into the spotlight.

In that year, Shell faced accusations of involvement in the execution of Ken Saro Wiwa and eight other militants in Nigeria. They were also being criticized by Greenpeace for their decision to drop the Brent Spar oil platform. As a result, Shell temporarily lost the trust of investors and the public. In order to rebuild its image and reputation, Shell invested 20 million dollars in its public relations efforts. As part of this effort, Shell published a statement on its principles regarding values and integrity, which was supported by a report released in 1998 by the environmental consultancy Sustainability. To further convey its commitment to environmental issues and community involvement, Shell launched a global advertising campaign.

This move has successfully restored the Shell trade name image. PR and Marketing Purposes: A batch of corporations have been utilizing CSR as their

selling scheme in order to alarm the populace about their operations and derive the attending of future consumers. When companies are being noticed by the populace as a corporate socially responsible organisation this would increase its hereafter investings. For illustration BP- BP acquired a solar company for a little per centum of its disbursement on oil outgo in order to look as an conservationist 's corporation and place itself as a corporately societal responsible company. Penetrating a New Market: If a company wants to come in a new market, it has a high hazard of neglecting, in order for corporate to pull off their hazard holding CSR means that the company is cognizant of the issues environing the environment and therefore makes it easier for the company to perforate the market.

Competition and Market placement: Companies that invest in Corporate Social Responsibility (CSR) are seen as market leaders because they operate according to ethical principles. Many multinational corporations, as well as local businesses, have engaged in extensive CSR initiatives in order to gain a competitive advantage. This can be seen through the various aids and contributions made by different companies to assist communities. Cadbury, for example, positioned itself by acquiring Green & Blacks, conveying a message to the public about its ethical beliefs and gaining control of a niche market to increase profits. An analogous example is Body Shop, which is known for manufacturing and retailing naturally-inspired, ethically produced beauty and cosmetics products. The company aims to fulfill its corporate social responsibility by participating in ethical trade programs to improve employee working conditions. Recently, they launched a campaign called "For Me, For You" Special Edition Shea

Lip Care Duo, capitalizing on their success in the lip balm market while also addressing domestic violence. The proceeds raised from this campaign were donated to non-charitable organizations supporting women and children.

Body store differentiated itself in the market by crafting its public image. Moreover, Corporate Social Responsibility (CSR) has emerged as a way for big corporations to allocate their substantial profits to the community. Research shows that numerous multinational companies generate billions of dollars each year, while many people still struggle with poverty. CSR initiatives are philanthropic endeavors aimed at improving the welfare of these individuals.

Studies have shown that transnational corporations in impoverished countries carry out extensive social projects to uplift the well-being of the population. In contrast, businesses prioritize social and environmental progress to empower individuals in developing their fundamental skills for self-improvement. Therefore, research indicates that businesses involved in social advancement aim to enhance the potential of people.

In relation with this phenomenon, it has been realized that the dependence of hapless communities can merely be achieved through guaranting sustainable developments.

Approachs for CSR- How to integrate the CSR scheme

There are assorted signifiers that corporations can prosecute in order to be perceived as socially responsible. Community-based development attack involves the cooperation between organisations with the community with the purpose of breaking their public assistance. In this respect, corporations involve in assorted undertakings which are aimed at bettering the public assistance of the community. The corporations may set up assorted larning establishments, H2O undertakings, and other activities aimed at profiting the populace.

The issue of education has been a problem for various corporations, as they have engaged in training and empowering the public with skills and knowledge

to help them in the future. An example of this effort can be seen in "Flower Valley under the initiative of Shell Foundation". The practices of Mark and Spenser have also been commendable in their efforts to establish trade incentives with the community. Many corporations have also placed a significant emphasis on educating the community about HIV/AIDs as part of their social responsibility. Philanthropy has also been a prominent approach to corporate social responsibility, with many corporations providing financial contributions and assistance to communities.

In relation to this concept, both transnational and local organizations provide financial contributions and assistance to deprived communities and organizations in poor countries. Although this approach has benefited the communities, it has faced criticism from various groups and scholars. "This is mainly because it only provides short-term assistance to the community and fails to provide the necessary skills and knowledge to help improve their situation. By continuously accepting philanthropic donations, communities become dependent on assistance, which ultimately worsens their situation rather than solving it. However, philanthropy has been significant for corporations as it helps build their public image and enables them to achieve their objectives." As previously discussed, according to the stakeholder value theory, this approach acknowledges the interdependence between corporate success and societal welfare.

The concerns have been focused on developing sustainable and worthy schemes that can integrate the community into their involvements. A key aspect in achieving shared value is the intense development of an educated workforce, sustainable resources, and healthy relationships for effective competition in the market. It is important for companies to prioritize costs and the fulfillment of externally set societal and environmental standards. Enhancing corporate strategy is primarily

driven by opportunities for competitive advantage. Benchmarking is a widely used approach for corporate social responsibility, enabling businesses to outperform their industry rivals and improve their performance and profitability.

In essence, benchmarking entails the analysis and reassessment of rival CSR initiatives while evaluating and measuring the impacts of other businesses' adopted policies on society and the environment. The perception of rival CSR strategies has also become a significant consideration in the business sector recently, with businesses being highly aware of their competitors' efforts in this area. Recent research has demonstrated that this approach to CSR is now more relevant due to its influence on corporate strategy, enabling businesses to compare their rivals' CSR efforts and make informed decisions about appropriate actions.

Reasons for the Increase of CSR

The rise of ethical consumerism has been shaped and enhanced by globalization and technological advancements. Nowadays, the public's awareness of their rights and freedoms regarding corporate matters is higher than ever before.

In comparison to earlier generations, individuals in contemporary times possess a higher level of consciousness regarding the impact that a company's actions have on the environment and society. Moreover, heightened competition among businesses has led to consumers becoming more knowledgeable about their rights and the obligations of businesses. Consequently, this competition has caused consumers to not only prioritize price and quality but also consider the ethical components associated with a business. As a result, corporate social responsibility has experienced substantial growth.

Globalization has had a notable effect on global business and corporate social responsibility (CSR). It has fostered greater collaboration and interaction among global communities, necessitating businesses to uphold ethical practices that align with societal

norms. This is particularly evident in foreign corporations operating across different countries, as they are expected to conform to the region's established business practices. Consequently, businesses are prompted to embrace CSR initiatives due to the influence and pressure exerted by their competitors.

The media's role in exposing unethical practices across industries has prompted businesses to adopt more socially responsible behavior. Media coverage of pollution, for instance, has publicly shamed companies involved and compelled them to reform their unethical practices. Simultaneously, recent changes in corporate and business laws have also fostered greater participation in corporate social responsibility initiatives.

Concerns are required to comply with the laws and regulations established by governments and institutions in the countries where they operate. Governments are currently aware of corporate law and the ethical issues in business. Businesses must adhere to business laws and regulations, taking into account the expectations of the public and safeguarding the interests of all stakeholders. The issue of pollution is a pressing global concern, and businesses are responsible for their environmental impacts.

For example, issues that have caused harm to the environment are required to compensate for the damages.

Analysis

Importance of CSR

According to Waddell (327), CSR holds great significance in both the business and social realms. Research on various groups' opinions on corporate social responsibility has revealed a positive attitude and perception toward the matter. This is due to the fact that it has promoted order and adherence to ethics in the business sector. With the adoption of corporate social responsibility, businesses have significantly altered their behavior and embraced more commendable practices. For instance, they have effectively addressed the problem of environmental pollution.

The Effect of Positive &

Negative CSR on Companies' Performance

Corporate social responsibility (CSR) has played a significant role in enhancing the performance of businesses. This is particularly evident in terms of revenue, as businesses have been able to increase their sales through the implementation of effective CSR initiatives. It is crucial to acknowledge that engaging in ethical business practices allows companies to attract the attention of customers and the general public. Consequently, consumers are more inclined to engage with companies that prioritize ethical behavior.

The gross revenues volumes and profitableness of different concerns are improved by implementing CSR initiatives. While these initiatives may be expensive in the short term, they ultimately result in significant returns for the business in the long run. By gaining loyal and trustworthy customers, the business can focus on sustainable sales projections and future profits. Furthermore, corporate social responsibility also helps establish a sustainable relationship with the community.

Businesses have also experienced negative impacts from the concept of corporate social responsibility. Firstly, the process of undertaking CSR initiatives is costly and strains the financial resources available to corporations. This has particularly affected small and medium corporations that cannot afford the high costs of engaging in various CSR activities. As a result, businesses have incurred losses.

Detailed Analysis of corporate that implements CSR in Kuwait- NBK-ZAIN ; A ; EQUATE

Research conducted on corporate practices in Kuwait has identified a significant implementation of corporate social responsibility. This is mainly due to intense competition among businesses in Kuwait, leading to the promotion of CSR initiatives.

Additionally, the demand for concern to pattern moralss has been influenced by public consciousness, which has also contributed to corporate social responsibility (CSR). EQUATE, a prominent

organization, has extensively operated in the field of CSR and has demonstrated a strong commitment to ethical performance. An examination of the company's structure and performance reveals a focus on maintaining high ethical standards. EQUATE's corporate mission and vision prioritizes the establishment of a diverse and highly qualified workforce. As a result, the corporation strives to meet rigorous standards in all aspects of its operations. Over the years, EQUATE has consistently played a role in implementing safety programs.

The main purpose of this is primarily to ensure the welfare of the staff is protected in all company operations. Additionally, the human resources management of EQUATE has also been commendable by providing the best benefits to all members. In terms of human resources management, EQUATE ensures that all staff have access to necessary support services and competitive compensation, thus increasing their motivation. In addition, EQUATE prioritizes attractive packages for employees, guaranteeing optimal compensation for their services. Importantly, EQUATE has been recognized as the first company in Kuwait to provide comprehensive health insurance to its employees.

This is a societal development that has ensured the wellness of employees and their households. This issue of wellness is a cardinal factor in the sustainability and continuity of the human society and ought to be enhanced. This has been efficaciously been shown by EQUATE. The company has been able to offer interesting occupations to the society therefore guaranting that they are given an chance to better their public assistance. In add-on, the construct of community authorization and enlightenment on of import life issues has besides been fostered by EQUATE. Based on this phenomenon, the CSR enterprises undertaken by EQUATE has lead to

significant betterment of its public presentation.

NBK has also engaged in commendable practices within the market that have contributed to its current position. Primarily, NBK has demonstrated ethical business practices that have influenced other banks in Kuwait and Asia. In addition to this, NBK has actively sponsored and supported impoverished communities. For instance, the corporation has initiated and financed numerous educational programs that have had a positive impact on the community. Furthermore, NBK has also been involved in various human resources development initiatives.

For example, the support of the health care sector has been made a priority by It. It has a specialized Children's infirmary that cost more than KD 4 million. [15] In 2008, It launched a public safety awareness campaign called "Think Twice". This year-long campaign involves distributing energy-saving light bulbs and also partnering with "Green Target Company" to start recycling in the country. The goal is to provide interesting jobs to the society, ensuring that they have the opportunity to improve their welfare.

Additionally, NBK has also fostered the construct of community authorization and enlightenment on important life issues. The CSR enterprises undertaken by NBK have significantly improved its performance.

CSR Internationally: General Motors, BP, Coca-Cola

On the contrary, global research and analysis has demonstrated that multinational corporations engage in extensive CSR initiatives. Specific analysis of multinationals such as General Motors and Coca-Cola has revealed a strong commitment to CSR. For example, General Motors actively participates in sponsorships and contributions to impoverished communities.

General Motors and Coca-Cola have both demonstrated a strong commitment to community involvement and public welfare. General Motors has initiated various social projects, including the establishment of schools, dikes, hospitals, and other amenities in

the areas where it operates. Similarly, Coca-Cola has been actively engaged in extensive corporate social responsibility initiatives aimed at improving the welfare of the general public. Furthermore, Coca-Cola is also highly regarded for its efficient human resources management, providing the best treatment and considerations for all employees.

Coca-Cola prioritizes human resources by empowering staff with necessary services and competitive compensation to increase motivation. The company also focuses on providing attractive bundles and optimal compensation for employees. Additionally, Coca-Cola is committed to ethical business practices including proper pricing and quality. Moreover, the company actively participates in excessive contributions and sponsorships to improve people's welfare.

Coca-Cola has effectively demonstrated this by providing interesting job opportunities to society, ensuring that they have a chance to improve their well-being.

Comparison between Corporate in Kuwait and Global Corporate implementing CSR

Through research and analysis of CSR in Corporate in Kuwait and Global Corporate, significant differences and similarities have been identified. The CSR practices in Kuwait have been widely implemented to enhance business performance and meet the needs of corporate members.

Both EQUATE and NBK have internally oriented CSR initiatives focused on safeguarding the welfare of their employees. However, Kuwait corporate entities also engage in societal developments and sponsorships aimed at improving community welfare. In contrast, global corporate CSR efforts primarily aim to improve the welfare of the wider public. Internal issues of business are not the main focus of CSR for global corporates, unlike in Kuwait corporate entities. All these corporate entities have taken the initiative to incorporate CSR into their operations.

However, complying with the ideal Corporate Social Responsible (CSR) is a challenge for most companies. Despite the increasing adoption of CSR in Kuwait, there

is still a need for greater awareness. Meeting the requirements for an efficient CSR is difficult to achieve. One such requirement is operating under the Social Accountability International SA8000. Obtaining certification from SA8000 is a rigorous process that involves an audit to assess the company's operations and ensure they meet the standards. The Social Accountability Requirements, as listed below, further complicate CSR implementation:
- Child Labor: Companies must adhere to specific conditions and document requirements when employing young workers and providing suitable working environments.
- Forced and Compulsory Labor: Companies are prohibited from using force or coercion to make employees work. This includes withholding wages or documents (such as passports).
- Health and Safety: Companies must provide a safe working environment for their employees, including equipping them with necessary gear and clothing in biohazardous environments.
- Freedom of Association and Right to Collective Bargaining: Employees have the right to form labor unions or other organized trade unions to negotiate on their behalf.

• Discrimination: The company must not engage in discriminatory hiring practices based on race, nationality, sexual orientation, or gender. The company must also prevent any behavior that is considered abusive, such as the use of offensive gestures.
• Disciplinary Practices: The Company must operate in a way that does not use any inappropriate or disrespectful penalties towards employees.
• Working Hours: The Company must comply with working hour and public vacation standards and laws. If overtime is required, employees must be compensated for it.
• Wage: The company must provide a minimum wage to ensure that employees' basic needs are met. Deductions should only be imposed for disciplinary actions.
• Management Systems: The company must document
  

its policies for social accountability and labor conditions. They must also prominently display the SA8000 standards in a visible location for review.[16]

All of these standards are mentioned in the SA8000 certification for social accountability. If a company is certified by SA8000, it indicates that they operate in a socially responsible manner.

Suggestions for promoting CSR awareness in Kuwait

Based on the assessment of Kuwait's current state and understanding of CSR, the following recommendations are proposed by the businesses operating in the region.

To begin with, it is important for businesses to be more conscious of the welfare of the surrounding community rather than solely focusing on internal organizational matters. For example, companies like Coca Cola and General Motors in Kuwait should redirect their focus to address the concerns and interests of the broader population, ensuring social and environmental progress. Additionally, businesses should also prioritize addressing ethical and moral issues to ensure that their operations are accepted.

On the other hand, the idea of prioritizing public involvement should also be reflected in the budgetary decisions.

Decision

Ultimately, the extensive and intensive research as well as analysis of the concept of CSR has shown its profound importance to business setups. The main objective of implementing corporate social responsibility is to establish the business among consumers and the general public. According to research, businesses engage in social projects in order to attract the attention of consumers. In this regard, corporate social responsibility is categorized as part of the marketing communication strategies aimed at positioning the business. Businesses that have strongly adhered to the practice of corporate social responsibility have been able to effectively position themselves in the market, thereby

increasing their sales and profitability.

There is a great need for all businesses to adapt their practices and adopt corporate social responsibility (CSR).