Corporate Social Responsibility
Suman Katkuri
Literature Review
1. Strategy
The economic crisis has brought a raising need for redefining the pillars of the current economic thinking and redesigning the economic motivators. Nowadays, the need for cooperation at all levels, for active partnerships and for societies with active multi-stakeholder performance determine the implementation of a concept called Shared Social Responsibility. Being an integrative concept, shared social responsibility compensates and enlarges the term of corporate social responsibility. (Lucian,2011)
2. Malaysia
Although most of the companies viewed CSR as an additional cost and found it not to be relevant to their business strategy, the involvement of CSR activities has opened the “eye” of more companies in managing their business to a better financial reputation and performance impact. CSR disclosure will give positive impact in a company’s performance and management believe to gain trust from multiple stakeholders for long-term benefit. (Hizam, et al, 2019)
3. Responsibility vs Irresponsibility
Managers in the position to influence their teams must understand that they are the ones that inspire others through establishing in their field of activity a set of values, standards and clear, realistic and appealing expectations. Consequently, it is fundamental that managers explain to everybody that assuming a moral behavior and CSR activities is expected and rewarded. In this way they can enhance the economic and social performance, and create feelings of trust, fulfillment and satisfaction. (Mirela & Irina, 2014)
4. Earnings management
Earnings management damages the interests of stakeholders. Hence, managers who manipulate earnings can deal with stakeholder activism and vigilance by resorting to corporate social responsibility (CSR) practices. Furthermore, CSR is a powerful tool that can be used to garner support from stakeholders and, therefore, provides an avenue for entrenchment to those managers that manipulate earnings, so as to reduce significantly their chances of being fired. (Prior et al, 2007)
5. Individual & CSR
Prosocial behavior by investors, consumers and workers is driven by a complex set of motives: intrinsic altruism, material incentives (defined by law and taxes) and social- or self-esteem concerns. These motives are mutually interdependent, and both policymakers and social activists must have a good understanding of these interactions in order to properly harness people’s desire to behave prosocially. (Jean & Roland, 2010)
6. Management
Corporate social responsibility should take into account the interests and contribute to improving the quality of life of the main stakeholders (interested parties, which include employees, shareholders, investors, government, customers, business partners, professional communities, society as a whole, etc.). The companies need to develop ongoing interaction with the stakeholders to take into account their expectations and opinions for making and implementing effective management decisions. (Gulnara & Guzel, 2021)
7. Sustainable development
Corporate social responsibility implies the involvement of companies in increasing the quality of life and living standards of the population, in protecting the environment and promoting green technologies, in the financial and professional education of young people and the most vulnerable on the labor market, ensuring and maintaining the state of health, safety and security at work, combating poverty and social exclusion, reducing inequalities and creating opportunities for all regardless of race, gender, nationality, participation and voluntary involvement in economic and social projects, defense and respect for human rights, fight against corruption, and bureaucracy, etc. (Daniela & Simona, 2019)
8. Inventory
In the expansive periods, a significant proportion of firms invest more on CSR, which according to our results may generate a reduction in inventory accumulation and with that in production. On the contrary, in recessive periods, we find a reduction in CSR, which stimulates inventory investment for CSR-intensive firms, thus preventing steep reductions in production. (Barcos et al, 2010)
9. Reputation
corporations should incorporate CSR into their strategic decision making process in order to build good reputation and motivating employees for better performance. It is worthwhile for corporations to integrate their business activities internally (employee motivation to become more committed) and externally i.e. corporate reputation in order to survive the economic downturn (Ali et al, 2011)
10. Brand Identity
CSR activities have a positive effect on the companys responsible image perception. So, consumers perceive better the companys if the link with CSR in their past and attitude is highlighted. Surely this is possible if the company can show this link with the responsible behavior in a track record and in its core values. (Banu & Caner, 2017)
11. Conclusion
There is a relationship between corporate social responsibility and corporate financial performance. CSR benefits the firms in the long-term and help gain trust of multiple stakeholders. CSR enhances the economic and social performance and improves quality of life and standard of living. Individuals need to behave prosocially. CSR activities influences inventory, the companies spend financial resources to support the society development. It has a positive impact on brand image and reputation.
Reference
1. Ali, Imran & Ali, Jawaria Fatima (2011): Corporate social responsibility, corporate reputation and employee engagement
2. Banu Dincer & Caner Dincer (2017): Corporate Past and Attitude towards Corporate Social Responsibility: Impact on Brand Identity
3. Barcos, Lucía & Barroso, Alicia & Surroca, Jordi & Tribó, Josep A. (2010): Corporate social responsibility and inventory policy
4. Daniela Virjan & Simona Maria Stanescu (2019): Role Of Corporate Social Responsibility In Supporting Sustainable Development
5. Gulnara Raisovna Chumarina & Guzel Azatovna Abulkhanova (2021): Corporate Social Responsibility Management
6. Jean Tirole & Roland Bénabou (2010): Individual and Corporate Social Responsibility
7. Lucian BELASCU (2011): From Corporate Social Responsibility Through Corporate Social Responsiveness To Corporate Social Performance – A Strategic Choice For Business
8. Mirela Popa & Irina Salanță (2014): Corporate social responsibility versus corporate social irresponsibility
9. Prior, Diego & Surroca Aguilar, Jorge & Tribo Gine, José Antonio (2007): Earnings management and corporate social responsibility
10. Sheikh Muhamad Hizam & Zulkarnian Iylia Syazana binti Othman & Mohammad Mohammad Amin & Zalina Zainudin & Mohd Faiq Abdul Fattah (2019): Corporate Social Responsibility in Malaysia