The concept of CSR and factors that influence CSR

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Introduction
The term corporate social responsibility (CSR) uses for signifying engagements of corporates
with the society which has become very common in contemporary society. Corporate social
responsibility refers to a process through which a company develops and expresses its social
consciousness and organisational culture (Carroll, 2016). In the present environment, CSR is
gaining enormous attention not only of management of corporates but also of various
scholars and researchers because of its increasing use in the organisation and for focusing on
the concepts of it. The corporate social responsibility of a company signifies the obligations
and norms of the authority of decision making for taking suitable actions. Such actions can
improve and protect the welfare of the society along with the interest of the business concern.
The organisations are using CSR for fulfilling their responsibility towards the community,
along with improving its growth. Certain factors impact on the implementation of CSR in a
company and the effectiveness of outcome gained by the organisation from it. This essay will
shade light on the concepts of corporate social responsibility along with the factors that
impact on it.

Discussion
The increasing expedition for sustainable practices in the present time has developed the
requirement of becoming an accountable corporate citizen as one of the important business
strategies of management. In this era of globalization, the organisation can not exist in the
segregation of the immediate community of them for which they are developing products for
serving their requirement of making profits. As the organisations immerse in the commercial
and industrial activities for earning a profit, the need of inculcating the effective CSR in the
core strategy of their business has become a critical task for their commercial success and
sustainability in the long term (Rasche, et al., 2017). Companies use various other terms for
denoting the corporate social responsibility such as corporate accountability, stewardship,
corporate citizenship, corporate ethics, responsible business, corporate responsibility,
sustainability, triple bottom line and others. As per Carroll (2016), the concept of corporate
social responsibility is evolving with time and does not pertain any definition which is
universally accepted. The corporate social responsibility understands by the ways by which a
company integrate economic, environmental and social apprehensions into their decision
making, operations, values and strategies in an accountable and transparent way. It helps the
company to establish better conducts in the company, create profits and also improve society.

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According to the Vishwanathan, et al., (2019), CSR can refer as a business contribution in the
sustainable economic development which implements based on compliance with regulations
and legislations. In general, CSR involves beyond the law activities and commitment about
the ethics and management of the business, safety and health, human rights, environmental
stewardship, community involvement, human resource management, corporate philanthropy,
anti-corruption and anti-bribery measures. It also includes the customer satisfaction,
development and investment, adherence to the fair competition principles, supplier relations,
accountability, performance and transparency for both international and domestic supply
chain.

According to the Fryzel, B. and Seppala (2016), CSR previously referred to as social
responsibility (SR), over time, it has gained an unparalleled momentum in the business. It has
become a strategic issue that crosses the boundaries of the department and affects the
activities and operations of a company. As per the Carroll and Brown (2018), the evolution of
CSR can be traced from the prehistoric time, but in general, the evolution of it initiated with
the 1950s and1990s, the term gained popularity along with the development of the similar
themes. In the 1990s, the increase in the number of reports of CSR, codes of conduct and
standards illustrates the interest of organisations towards CSR. Still, it has delayed due to the
definitional debates of several decades. As per the Yiğit and Kirezli, (2019), one of the initial
definitions of CSR was given in the 1950s which evolved with different names like corporate
social performance and organisational social responsiveness. Such evolution also signifies the
enhancement in awareness in the vital fields of action and the performance which was
overlooked in the early definitions of corporate social responsibility. It has also been noticed
that until the 1970s, despite legislations and regulations, the organisations conduct its
operations mainly on a sovereign path, ignoring the critics and heeding only to the
shareholders towards whom they felt responsible. The perception had changed in the decade
of 1960s when the citizens were sceptical of the business, government and the indeterminate
“establishment” (Pareek, 2017). The consumers became suspicious towards the ingredients in
the foods and the harmful impact in the goods they purchased. People were also becoming
aware of the fragile nature of the ecology of the earth and becoming more acquainted of
human rights simultaneously. The corporate social responsibility is an evolution from
international legal instances such as compensation policies for more employees and others.

As per the Djelic and Etchanchu, (2017), every organisation, reports and policies display their
struggle for corporate social responsibility. It has become a method of making sure that the

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company is achieving every obligation of it towards society. It also makes the organisation
eligible to perform its business activities. The CSR policies provide assurance that the
company can develop on the sustainable basis. As per Brejning (2016), there are some
pressures from society regarding social issues, for example, the environment of companies
and human rights and CSR primarily regards as a response of the companies to such
pressures. CSR also faces specific issues among which central issue is the overlapping of the
appropriate role of the business with the reference area of it, which has made the corporates
to be committed towards the corporate social responsibility. It happens because now
companies can not play the role of wealth-creating entities only in society, but they also have
to focus on acting sensibly towards their stakeholders. CSR enables the company to perform
a dual-task in which one is generating profits which is one of the objectives of the company.
Another is to fulfil their responsibility towards society. The hindrance in achieving any of the
roles signifies the presence of lack in CSR policies of the company. Such deficiency can be
caused by different factors such as ethical consumerism, globalization, social awareness, laws
and others.

The ethical consumerism is the increasing interest of consumers for gaining knowledge about
the source of the product and whether the products are made, distributed and sourced
ethically or not (Burgoon and Fransen, 2017). Such behaviour of the consumers has
developed the need for accountable decision making not only in the domestic market but also
in the global market for ethical services and products. In modern business, consumers play a
significant role in motivating the corporates to advance and adopt ethical and responsible
practices. The customers are more alert, demanding of the accountability and transparency
across the business practices and aware. When the buyers show concern regarding the issues
of organisation and products, the company start taking notice, investing for satisfying needs
of them and engaging them seriously. As per Palihawadana, et al., (2016), consumers always
concerned about issues of society. Such concerns have frequently converted into actions like
an evaluation of CSR profile of companies before making decisions regarding purchase. In
the present time, the impact of ethical consumerism can be noticed in support of CSR in the
trends of the market like increasing production of the hybrid models of automobiles, the
popularity of the eco-tourism, increasing availability of the fair trade and organic foods and
others. According to Elg and Hultman, (2016), by making the values parallel to the actions of
companies, the organisations can minimise the trust gap with the aware consumers and also
gain rewards of the deeper relationships which endures the loyalty.

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There is also a conflict between the role of CSR in a company as either corporate social
responsibility can be a fundamental part of the strategy of the business and the corporate
identity or CSR can be utilised as the defensive policy. As per the Samuel and Mqomboti
(2017), there are specific scenarios under which a company can move towards the
implementation of CSR. In any organisation, levels of the CSR can be influenced by various
factors like financial stature of the company, appropriately enforce regulations of state and
economic condition of a country. The primary level of the pyramid of CSR in an organisation
is the economic responsibilities which further continues with the ethical, legal and other
responsibilities. In the changing business environment of the companies, the ethical
responsibilities have become more prominent on the legal and economic obligations as a base
for the success of the business (Wang, et al., 2017). Corporate social responsibility can be a
path for the business entities to match their corporate operations with the values of society
mainly when there are rapid changes are occurring in the environment. In such changes, the
ethical behaviour has become a need for strategic corporate social responsibility. Ethical
behaviour of a company can refer to a replica of their culture, set of values which among
share company and its stakeholders and the guiding principles that are profoundly rooted in
the organisation. It makes the culture and ethical behaviour as a part of the corporate identity
of a company and therefore creating the culture and ethical behaviour as an essential factor
that influences the CSR of an organisation.

The accountability is also a factor which can influence the corporate social responsibility of a
firm. As per the Yusoff, et al., (2019), accountability is the process in which an organisation
or a leader assure integrity. In the global society of stakeholders, accountability can be said as
a critical challenge for a company. The leaders in an organisation are mainly concern about
aligning and reconciling the needs, demands, values and interest of the customers, suppliers,
employees, shareholders, communities, environment and also society at large. The track
record of a company concerning the CSR accounting will be considered to be useful if the
measures of CSR include both supply chain and internal activities. As per the Demirag
(2018), the increasing need for accountability in the CSR practices has inserted more pressure
on the companies to shoe themselves as accountable, ethical and transparent. The factor of
accountability has made the corporates to design their CSR policies in a balanced manner
among the economic, ethical and legal considerations. It also makes the companies adopt a
holistic approach by which they can engage with the stakeholders and also develop an
essential link between the management of the business and the stakeholders.

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The globalisation has provided the opportunity of growth to the organizations, but it has also
created various challenges which can cause limitation in their potential profits and growth.
The regulations of the government, environmental restrictions, varying standards and tariffs
can cause multiple problems to the organisations. As per the Rasche, et al., (2017), the ethical
issues can also impact on the growth and profit of a company. It makes the organisations use
CSR as their strategic method of gaining support in the global market by having a
competitive advantage. The global competition, which is an outcome of globalisation, is
causing pressure on the companies because of which the organisations are avoiding
evaluation of their labour practices, supply chain and others from the CSR perspective. Such
avoidance in the global market impact on the CSR policies of a company and reduces the
benefits which a company can gain due to its CSR strategies.

Conclusion
The concepts of corporate social responsibility are not one or two decade old, the evolution of
the CSR can be traced from prehistoric times, but its discussion has been identified in the
1950s. The definition and concepts of CSR have been evolved with time like involvement
about the welfare of employees, but still, the global definition of CSR does not exist. The
organisations are using CSR for gaining profits and fulfilling their social responsibilities but
there are certain factors which influence the CSR and cause limitations in the outcome of it.
The ethical consumerism is one of such factors. The impact of such a factor is positive on
CSR as it enables the corporates to be ethical in every activity of them. Accountability makes
the organisation design balanced CSR for every stakeholder. Still, moral and cultural
behaviour makes the CSR more social than economic, which is not beneficial for the profits
of the company. The conclusion that can draw from this essay is there are a universal
definition and concepts required for CSR so that the impact of the factors can be balanced.

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