The purpose of this critical analysis is to be acquainted with transformations of
Corporate Social Responsibility (CSR), giving credence to the significant groundwork accentuating insights into the development and concerns of environmental issues in the context of business and management.
CSR is the creation of social and environmental benefits under the responsibilities of businessmen, a social contract between business and society, where benefits accredited for aligning sustainable perspective which is contingent upon the development of CSR in their business activities, the righteous activities necessary for sustainable alignment and not the activities that would imperil.
The evolution of key events and developments contributing to the increase adoption of CSR globally, with cogent examples as to why CSR has changed over time, (see Table 1 and 2).
Change architecture, and benefits realised through corporate behaviour from the growing belief that business’s and society ought to incorporate a responsible and sustainable development in their business activities, (see table 3).
Timeline – Tracing the development of CSR
The table below highlights key developments of CSR however, not an exhaustive list of events and issues.
The Case Study of Disney’s CSR Journey
Table 2. are highlights extracted from Disney’s CSR implementations as part of their business model documented in their CSR fiscal year of 2019 report, and showing their priorities amongst key areas of known interest to their business.
Contrary to when a company that does not contribute to these social goods will eventually decrease revenues because low-cost production in the long-run ultimately depends on their accomplishments, therefore it pays to support and fund your employees to further their education/skills, akin to Disney’s ‘Aspire Participation Program’.
Although it may seem paradoxical to propose that funding social programmes (usually costly) will increase company profits, but true indeed with the case of Disney’s ‘conservation fund’ to coalesce the environmental conservation and reducing green-house gas emissions, by the ability to source alternative renewable electricity ‘solar-facility’ transforming power from the sun to run its theme parks resulting to long-term profits, which circumvent the argument that CSR initiatives hinders business’s from making profits.
Gavin (2019) states ‘in which for-profit companies seek ways to create social and environmental benefits while pursuing organisation goals, such as revenue growth and maximising shareholder value’.
Freeman (1984) introduced ‘stakeholder theory’ whereby businesses have responsibilities to stakeholders beyond shareholders, such as employees, customers, and the community.
Table 2. Case Study of Disney’s CSR Journey. Adapted from Disney’s CSR 2019 Report.
Change Agents
CSR requires business’s moral conviction in its behaviours towards society, just as Bowen (1953)
describes how businessmen have a duty to pursue policies, choose courses of action, and make decisions that are in keeping with the goals and values of our society.
Change agents are the drivers of change, similarly any work in developing theories is accredited for change agents bringing about realisation for change, such as the example from Force Field theory by Kurt Lewin in his work titled ‘Resolving Social Conflicts’ is to bring about change via
balancing between forces to maintain level of social self-regulation.
Weybrecht (2014) supports the demands of finding methods to improve society and leave it in a better state than when we found it.
Change Architecture and Benefits of CSR Activities
Not being cognizant to CSR requirements can lead to ‘no-change’, where there is a mismatch between the ‘talk’ and the ‘walk’ such as in greenwashing policies, or excessive white-washing, exaggeration, false disclosures or lack of transparency. The complex and nuanced definition of CSR leaves room for interpretation in the recommendations it makes for societal, economic, and ecology. Resulting to less ethical corporations to greenwash their policies, as suggested by Dahlsrud (2008). Having frameworks in-place to combat plausible ‘greenwashing’, exaggeration or
misrepresenting their Environmental, Social, and Governance (ESG) efforts according to Christensen, et al., (2021).
Managing CSR through change architecture, social contracts, policies, regulations, frameworks etc, as a vehicle to circumvent archaic delays and to mitigate risks. Including change agents who can contribute in the development and implementation for the sake of improvement, for example frameworks in Table 3.:
Understanding Change and Outcomes of Corporate Behaviour
The ‘Iron Law of Responsibility’ makes mention that the corporations social power which is given by society can be taken away by them if power is not used responsibly, and history seems to confirm that society ultimately acts to reduce the power of those who have not used it responsibly, according to Davis and Blomstrom (1971). Furthermore when society takes a stand and decided to coalesce the community together to achieve the many social goods, this convinces social goals are highly valued by the public, and any company hoping to project a positive public image must
demonstrate that it supports these goals as well. The rationale behind the existence of the corporate institution is that it provides significant benefits to society. Business has a charter granted by society, to uphold its standards in order to maintain its current social role and social dominance. This corporate behaviour is customary in business, to apply the public image notion to the achievement of many kinds of social goods. Every business aspires to a better public image in order to attract more clients, hire talents, and reap other advantageous.
According to Agudelo (2019) due to the post-world war II economic boom and rising consumer consciousness, firms were compelled to consider their social impact. The 1960s and 1970s environmental movement increased public awareness of corporate environmental responsibilities.
Brent (2014) refers CSR to the moral and practical obligation of market participants to consider the effect of their actions on collective, and then regulate their behaviour in order to contribute to bringing those outcomes into congruence with societal expectations.
CSR through their charitable activities where sustainable alignment through philanthropy occupies forethought consciousness of the wealthy.
The Future
As suggested by Investor’s Chronicles (2024) that weather-related disruptions brought on by climate change may exacerbate inflationary pressure, while supply-chain disruptions resulting from geopolitical tensions may raise the cost of commodities.
The more regulated and safety-conscious the world becomes, the more global initiatives such as climate change, poverty and social diversity issues there are to direct future resources into priorities for social impact programs such as supporting disaster relief, local collaboration and volunteerism.
According to Friede, et al., (2015) the rise of investors relying on Environmental, Social, and Governance (ESG) criteria as standards for decision-making that acknowledge the importance of non-financial factors on a business’s long-term viability and performance, provides a shift towards broader coherence of corporate responsibility.
Recent plans to introduce new European Artificial Intelligence (A.I) Act that will bring about the categorisation of the A.I systems by the Act, due to concerns around ‘What is A.I cognitive behavioural manipulation?’, fearing society’s beguiled by an A.I-driven manipulative system, exploiting individuals cognitive biases and undermine their decision-making processes bouts to key provisions, further regulations, administrative infrastructure, and possible restrictions over the purpose of A.I models, and practices. EU’s A.I Act accruing more obligations for developers and providers of A.I systems.
Conclusion
CSR is a strategy adopted by an organisation giving ability to operate outside its long-run self-interest such as profit maximisation reasons. Disney’s case study CSR report shows the priorities it sets, paying the greatest attention to the requirements of its community, it will consequently have a better community in which to operate.
Change architecture frameworks enables businesses to self-regulate, achieve both social benefits and the conventional economic gains that business’s seeks, promoting responsibility of the business to consider how its key priorities will affect the external social system during the decision-making process.
Beyond what is required by law, social responsibility is a business’s recognition of an additional social commitment. The goal to preserve business’s long-term viability as an institution is closely related to public perception and image. The ‘Iron Law of Responsibilities’ makes mention that Business’s has a charter granted by society, which can be changed or revoked whenever it is deemed by society if it is fitting to maintain its current social role and social dominance.
The time-line of CSR events and key issues could attest to the change leading the move away from archaic ways, ignorance to the needs for change towards sustainable alignment is being challenged by many factors, such as society, policies and even A.I technology infrastructure.
The future introduction to EU’s A.I Act accruing more obligations for developers and providers of A.I systems, restrictions on general-purpose A.I models, and prohibitions of A.I practices.
The sustainable perspective through conserving the environment and social priorities is gradually becoming less inconsequential and contentious, bringing consciousness of the wealthy, the voice of the powerful members of society together. For sustainable perspective to align, its contingent upon the development of CSR in their business activities, those activities needs to happen for sustainable alignment so that the welfare of our society and eco-systems advancements continues.
Critical analysis by Jenny Cameron, MBA, Business Analyst.
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