Corporate Social Responsibility Analysis Assignment Help
Impact of Corporate Social Responsibility in the Context of Global Supply Chain
Executive Summary
Corporate social responsibility (CSR) is not restricted to supply chain as it is a wide idea. Nonetheless, it is encircled to the corporation’ general treatment of humans and the environs. Businesses are socially, morally and ethically accountable to pay attention to the society in which they function. The factor of ethics in business activities has turned out to be an integral part of the concept of Corporate Social Responsibility (CSR). It is apparent that consumers seem less concerned about retailers than they are of giant manufacturers. Consumers perceive retailers as being little accountable for the activities involved in the supply chains and typically tend to trust retailers’ business behaviors. The majority innovative retailers have capitalized on this opportunity and have commenced to amend their offers and marketing policies through employment of CSR as a source of economic value addition in sum total activities and dealings with all the supply chain actors. The altering nature of business relations has drastically transformed the world-wide notion of CSR. The worth of evaluating CSR in global supply chains should be seen in view of the fact that a large part of global trade is carried out through systems of governance, that tie internationally operating firms together in a variety of sourcing and contracting accords.
Introduction to the Research Topic
A number of research analysts have elucidated their thoughts on the corporate social responsibility (CSR). Like, in the early 1950’s, Bowen (1953) created the CSR concept which was later discussed by Carroll (1999) who also outlined the development of the CSR notion. About seventeen years (1953-1970), majority of the researchers cracked down on the responsibility of an entrepreneur. For around a decade (1970-1980), a number of research studies (Davis, 1973) focused on the attributes of socially responsible conduct (Carroll, 1979). In the era of 1980s, Freeman (1984) analyzed the subject matter of stakeholder theory, Fredrick (1986) discussed about the corporate morals, and Drucker (1984) concentrated on the business social behavior. On the other hand, pragmatic analysis was carried out by a number of researchers, for example, Kotter & Heskett (1992), Collins & Porras (1995), Waddock & Graves (1997), Berman et al. (1999), and Roman et al. (1999). These researchers tried to associate CRS with monetary operation.
According to Ostrau & Walter (2012), a corporation can handle legal, reputational and economic risks in a better way by means of a well-organized corporate social responsibility (CSR) course of action that effectively deals with the concerns of supply chain. In accordance with Maloni and Brown (2006), in general, supply chain of a corporation may possibly be described as the chain of corporations, consisting of suppliers, consumers, and logistics sources that act as a team in order to give a worthy package of merchandise as well as facilities to the end customer. Irrespective of the CSR’s history, uses of CSR to the supply chain have come into sight in the past fifteen years. In 1989, Poist discussed about social responsibility in the domain of supply chain. An overall responsibility mode was suggested by Poist (1989) in which social concerns to conventional monetary/ financial drivers of the supply chain was also included.
Aims and Objectives of the Research
This study aims to present a detailed literature analysis on CSR in the context of global supply chain. Besides, it aims to answer: How is CSR associated to global supply chains and what are the major forces behind the CSR’s development in global supply chains?
Plan of the Report
At first, we are going to analyze the literature on corporate social responsibility. After that, discussion on corporate social responsibility and global markets will be carried out. Lastly, a thorough literature analysis will be presented on corporate social responsibility in the context of global supply chains.
LITERATURE REVIEW
Corporate Social Responsibility
Corporate social responsibility (CSR) is not restricted to supply chain as it is a wide idea. However, it is bounded to the corporation’ general treatment of humans and the surroundings. Carroll & Buchholtz (2000) and Ougaard (2004) highlighted that CSR is an entrenched notion and there is no general consensus on the CSR’s meaning in reality. A precise description of CSR is hard to pin down because viewpoint and mind-set concerning the type of the association flanked by both corporation and society show a discrepancy with the pertinent concerns of the period. In addition, it was argued that the intricacies with reaching at a description/ elucidation of CSR partially relate to the issue of shaping (operationally) the managerial insinuations of such a description. This is a chief issue taking into account corporations’ differences in magnitude, products, productivity, resources, communal influences, and so forth.
One more aspect which contributes to the confusion concerning the kind of CSR is the huge amount of notions employed to explain mainly the same observable fact. A range of elucidations to business’s commitment in moral concerns have been presented by intellectuals, professionals as well as company executives. Marrewijk (2003) highlighted that aside from CSR, surrounded by the ideas that have been employed are sustainable development, sustainable capitalism, corporate nationality, the triple bottom line, and business moral values.
By and large, the structure of CSR as we recognize it in the present day has the following two chief features:
1) At the outset, it elucidates the association flanked by business and the broad society.
2) After that, it alludes to a corporation’s generous activities in the context of ecological and social concerns (Carroll & Buchholtz, 2000; McWilliams & Siegel, 2001; Commission of the European Communities, 2001).
Corporate Social Responsibility and Global Markets
Businesses are socially, morally and ethically liable to take care of the society in which they operate. They are responsible to make their contribution towards the betterment of the society and lending a hand to the vulnerable. Since last few decades, the component of ethics in business activities has become an integral part of the concept of Corporate Social Responsibility (CSR). This term basically refers to the good activities firms do that they are not compelled to do under the rules and regulations and laws governing environment, workers’ health and safety; and investments for the welfare of their community (Bruce et al., 2005). CSR has now developed from merely a righteous choice to a significant area of business matters. Moreover, CSR has become an indispensible parameter with which the consumers evaluate a company and eventually build their perceptions related to a company and its products.
Flourishing Significance of CSR
A heightening concern regarding general ethical issues; specifically Corporate Social Responsibility (CSR) and its environmental and social issues associated with firm-consumer relationship have been well studied by various renowned researchers (Dagnoli, 1991; Shaw & Clarke, 1998; Shaw & Shui, 2001; Caselli, 2003; Pepe, 2003; Maignan & Ferrel, 2004). Today’s well-informed and acquainted consumers are not only interested in advance products, but they also want to be fully aware of the companies that produce those products; the labor working conditions, the processes employed and how these production processes affect the environmental settings and economic growth of the local communities along with the companies’ supply chains (Strong, 1996; Shaw & Clarke, 1998, Harrison et al., 2005). As consumers are becoming widely alert of the significance of ethical behaviors; their motivation has increased towards a sustained balance between personal and social benefits (Macchiette & Roy, 1994; Hemingway & Maclagan, 2004). In response to consumers’ such anxious approach, companies have progressively abide by the ethical and social responsibilities through implementing CSR related methodologies and initiatives. These interventions have fueled business growth and goodwill to a great extent. A positive correlation lies between CSR and business performance that has been already tested by various researchers (Balabanis et al., 1998).
CSR and Retailers
The significance of CSR has increased in almost every economic sector, particularly in the retail sector. Leading international retailers are heavily flowing funds to fulfill the business ethics related demands of consumers and also to build up wide self-perception regarding the ethical issues (Whysall, 2000; Jones et al., 2005). Renowned international retailers are now offering products that meet high ethical standards. These companies are consolidating comprehensive approaches towards CSR by issuing offers related to sustainable development and greater fair trade in terms of distribution of impartial benefits among all active loops in the supply chain. Restructuring their offers in accordance with the ethical ways, have won a competitive advantage to some prominent retailers. The most relevant example of such CSR innovation is a US retailer, Whole foods, which has characterized its assortments with organic products and products manufactured using a sustainable approach (Eurostaf, 2001).
It is evident that consumers seem less concerned about retailers than they are of giant manufacturers. Consumers perceive retailers as being little responsible for the activities involved in the supply chains and usually tend to trust retailers’ business behaviors (Musso & Risso, 2006). Thus, retailers enjoy the perk of positive image and are not directly linked to social issues because they are naturally closer to consumer communities, whereas manufacturers are rather perceived to operate ‘out there’ in someone else’s community. However, retailers are generally regarded as a link between corporate social responsibility and consumer trust. They often act as channel leaders and control various activities in the supply chain; thus they are capable of playing a dynamic role in pushing the manufacturers involved in large international supply chains to adopt a CSR approach. Most innovative retailers have capitalized on this opportunity and have begun to alter their offers and marketing policies through employment of CSR as a source of economic value addition in sum total activities and relationships with all the supply chain actors.
CSR in Global Supply Chains
The changing nature of business relations has significantly transformed the world-wide concept of CSR. In the past, companies were involved in manufacturing goods within entirely self-owned facilities in national operations; but in the contemporary world, companies are engaged in supply chains and supplier-based manufacturing across the borders. CSR is no longer an individual company’s domain; rather, it encompasses the entire supply chain that includes. In other words, the multinational companies are expected to behave responsibly in compliance with their local juridical restrictions plus they are equally held responsible for the environmental and labor practices of their global trading partners which include; the suppliers, third party logistics providers, and other intermediaries over which they enjoy no ownership right (Jenkins, 2001; Maloni and Brown, 2006; Business for Social Responsibility, 2001; Pedersen and Neergaard, 2004; Jørgensen and Nielsen, 2001; Roberts, 2003).
The significance of evaluating CSR in global supply chains should be seen in light of the fact that a large part of global trade is conducted through systems of governance, that tie internationally operating firms together in various sourcing and contracting agreements (Gereffi, 1994; Sobczak, 2006; Nielsen et al., 1997). Here, the term ‘governance’ implies that some chief actors in the supply chain – often large multinational corporations – take responsibility for the inter-firm allotment of labor and definite participants’ capacities to enhance their activities (Gereffi, 2001). Thus, they are competent to administer the production function over great ranges devoid of exercising ownership rights (Jenkins, 2001). It has been demonstrated that these chief actors are in general located in well-developed regions and encompass not just international manufacturers, but great retailers and well-recognized branded firms as well (Gereffi 1994; 2001). The privilege enjoyed by these business giants is derived from their market dominance and control over major resources required for the continuous flow of products in a supply chain. Possessing these authoritarian powers, the key actors are capable of advising or rather specifying what should be produced, how and by whom (Gereffi, 1994). The corporations might also provide practical guidance and assistance to their suppliers to facilitate them to accomplish the mandatory level of performance. Jenkins (2001, p. iii) claims that under global value chain practices, the retail buyers are responsible not only for particulars like manufacturing procedures and delivery date but also the social aspects like labor working conditions and environmental impacts of their processes. This shows the domain of retailers’ authority over the suppliers’ activities.
The pressures imposed on conglomerate companies come from both internal and external stakeholders which include; customers, employees, labor unions, shareholders, business partners, governments, NGOs and more specifically the media that plays an influential role in provoking the concern for environmental and social conditions at foreign production spots, principally in emerging economies (Welford, 2000; Maloni and Brown, 2006; Barrientos, 2002). This wide-spread awareness is chiefly the outcome of a boom of multimedia communication technology, which has made it almost for the firms to conceal their unethical practices at their suppliers and consumers. The increased flow of facts and news across the borders has given rise to stories about unethical and morally ill practices of the firms, such as violation of union rights, use of child labor, hazardous working conditions, race and gender inequity, etc. Distinguished examples groups exposed by the media enlist; Nike, Gap, H&M, Wal-Mart, and Mattel (Frost and Burnett, 2007).
