Theories of CSR

Why is Corporate Social Responsibility Important?

• Introduction to the course on corporate social responsibility (CSR) by Aradhna Malik.

• Discussion on the significance of CSR and various organizational approaches to it.

Approaches to CSR

• Obstructionist Strategy: Organizations ignore societal demands for CSR.

• Defensive Strategy: Compliance with laws only; minimal effort beyond legal requirements.

• Accommodative Strategy: Organizations take steps to please stakeholders while complying with laws.

Organizational Decision-Making in CSR

• Weak stakeholder and institutional pressures lead to an obstructionist approach.

• Intense institutional pressure results in a defensive strategy, focusing solely on legal compliance.

• High stakeholder pressure without strict laws leads organizations to adopt an accommodative strategy.

Antecedents of Corporate Social Responsibility

• Both high stakeholder and institutional pressures encourage proactive strategies in organizations.

• Economic conditions affect CSR; weak financial performance limits willingness to give back.

Stakeholder Pressure and CSR

• Low competition reduces stakeholder pressure, impacting corporate social responsibility (CSR).

• Effective compliance systems are developed collaboratively between organizations and regulatory bodies.

• High penalties for non-compliance encourage socially responsible behavior.

Industry Influence on CSR

• Industry norms push organizations to act responsibly; peer behavior influences actions.

• Monitoring by NGOs, investors, and the press increases accountability in CSR efforts.

• Public scrutiny prompts companies to contribute positively to society.

Education's Role in Promoting CSR

• Business curricula emphasize ethics and social responsibility, shaping future managers' perspectives.

• Students engage in volunteer programs, fostering a sense of societal obligation.

• Institutional recognition of CSR importance drives organizational commitment to ethical practices.

Collective Responsibility through Associations

• Trade associations promote socially responsible behaviors among member organizations.

• Continuous dialogue with stakeholders reinforces the significance of CSR initiatives.

Individual Motives for Social Responsibility

• Three motives drive individual involvement: instrumental, relational, and morality-based.

• Instrumental motives link organizational care for the environment with employee well-being.

Corporate Social Responsibility and Organizational Influence

• Aguilera et al. propose that individual actions can propagate social change within organizations through corporate social responsibility (CSR).

• Internal stakeholders like shareholders, managers, and consumers influence firms to engage in CSR.

• Pressure from management teams encourages organizations to adopt CSR activities.

National Level Antecedents of CSR

• External actors pressurize firms to contribute positively to society through CSR initiatives.

• Relational motives include promoting social cohesion and partnerships with marginalized groups.

• Moral motives emphasize collective responsibility for societal betterment.

Government's Role in Promoting CSR

• Governments incentivize firms engaging in CSR by offering benefits like subsidies and easier permissions.

• A compensatory relationship within government motives strengthens pressure on firms for better CSR practices.

• Multinational corporations leverage their resources to support NGOs and promote social welfare.

Transnational Relationships and Altruism

• Collaborative relationships among intergovernmental organizations arise from shared CSR activities.

• Altruistic motives drive efforts to improve global living conditions through corporate actions.

• NGOs push transnational firms towards greater engagement in social change via CSR initiatives.

Summary of Motives Influencing Firms' Engagement in CSR

• The multiplicative relationship of motives among transnational actors enhances firm pressure for engaging in CSR.

Corporate Social Responsibility Motives

National and Individual Level Motives

• Competitiveness drives corporate interest groups to engage in CSR for power and resource acquisition.

• Individuals feel a sense of belonging by contributing to organizations with good reputations, enhancing their own reputations.

• Organizations aim for stakeholder interests and collective identity, focusing on long-term welfare.

Social Cohesion and Collaboration

• At the national level, CSR promotes social cohesion, ensuring no one is disadvantaged while giving back to society.

• Corporate interest groups collaborate for interest alignment and quasi-regulation, aiming for mutual benefits.

• Altruism motivates organizations at the transnational level to improve global living conditions.

Interactions Between Motives

• Hierarchical interactions vary: individual motives rise upward while organizational directives flow downward.

• Community perception of goodness stabilizes organizations; intergovernmental entities benefit mutually through compensatory actions.