Abstract
The issue of Corporate Social Responsibility (CSR) is an old theme that has generated a lot of controversy in recent times, so scholars and researchers can’t agree with one another about it to a great extent. This literature review critically appraises various viewpoints about the importance of business involvement in society and the advent of sustainable development as a non-profit-oriented approach outside profit maximization.
The essay charts the history of CSR from the time when the concept first emerged in the 1930s, which powerfully highlights Howard R. Bowen’s contribution to the writing of “Social Responsibilities of the Businessman,” a pioneering work that set the course for subsequent studies on the societal responsibility of corporations. Sometimes, as the term lost part of its original meaning in the following decades, two sides of view would arise, with some scholars stating that CSR could be used as a strategic tool to increase companies’ reputation and create better relationships with internal and external stakeholders. In contrast, others conversely expressed that CSR was just a public relations tool used to present the “for profit” mindset of the corporations.
This review focuses on the numerous theoretical models formulated by scholars, including the ” Pyramid of Corporate Social Responsibility” created by Carroll Archie B. and ” Stakeholder Theory” offered by R Edward Freeman, that worked to conceptualize and operationalize the multifaceted nature of CSR. Also has research foci on the expanding body of such research, with detailed analysis of the empirical studies that were carried out in the 1990s and 2000s and whose results were meant to assess linkages between CSR and various business performance indicators, including some of Porter’s (1996) and Kramer’s (2004
This review explicitly addresses the methodological hurdles encountered while finding and measuring the CSR impacts. These include at the same time, the lack of standardized metrics for use, the self-reported data from the companies who report about CSR being used and the voluntary nature of CSR reporting, which have brought the data validity, reliability and potential greenwashing practices into question.
The review next covers the literature gap, such as prolonging the economics, social life, and environmental factors. The implication becomes more complex when there might be competing interests among stakeholders and sustainable development goals. It is another lesson that any future CSR model should acknowledge in order to address the exceptional challenges and opportunities for SMEs.
The report recommends research directions with a focus on elaborating robust and universal measuring instruments to assess CSR activities as well as combining different disciplinary approaches with CSR so that practitioners shift from imitating implementations of large MNCs to creating customized solutions that respond to specific capabilities and constraints of SMEs (Sadiq et al., 2022). Given these gaps and deficiencies, scholars may bring a more inclusive comprehension of the nature and consequences of CSR to such organizations as businesses, society, and the environment.
Introduction
In an increased social and environmental awareness age, “Corporate Social Responsibility” (CSD) has become a critical factor in business operations and academic sectors. CSR conveys the increasing awareness that in their continuing thirst for profit, in addition to other purposes, corporations are meant to be ready to help the community to solve societal and environmental problems and offer positivity to the community where they operate. There has been a stunning transformation in the conversations about CSR in academic work and among practitioners. There emerged contrasting theoretical schools of thought that sparked a passionate issue of the existence and strength of social responsibility.
This section will review the previous studies, summarise the main findings, and critically assess the existing literature. We outline the CSR historically and examine the competing views that have influenced its development, deriving the methods used to study the enterprise. The review will be narrated chronologically. The statement will represent a chronicle about the breeding of CSR from its first launch in the 1930s when the foundational works appeared and started accentuating the broader social responsibilities of businesses.
The review will continue in the following decades with its objective of signalling the different frameworks guiding scholarly thinking about CSR alongside longitudinal studies. The focus will be given to the conflicting ideas that have risen, with some scholars powerfully promoting corporate social responsibility as a strategic tool for improving and developing corporate image, stakeholder participation and long-term financial performance. At the same time, proponents of the argument critically opposed CSR to company public relations to hide their profit-seeking nature.
In this part of the review, the author will discuss in depth the field’s current state and focus on the main arguments presented by the two assessed views in the literature, as well as on the methodological challenges that can resurface in the context of CSR evaluation. The voluntary nature of CSR reporting, the lack of rigour and standard in measurements we take and reliance on self-reported data from companies are the primary concerns, the validity of which will be analyzed in depth.
The next step entails critically analysing the causal logic, evidence, reasoning, and guiding assumptions used in the existing CSR literature to pinpoint the deficiencies and limitations in the extant knowledge. The literature coverage will entail the degree of its relation to the economic, social and environmental elements, as well as the point where there can be a conflict and interruption of the multiple stakeholder interests and the sustainable development aims.
To conclude the paper, the review will suggest future research focusing on the discrepancy among different reporting metrics of CSR projects, the adoption of interdisciplinary approaches that influence disparate frameworks, and the examination of peculiarities, local factors, and financial restrictions in the sphere of SME CSR. Scholars can thus help fill the void and identify the weaknesses of CSR, making it complete and clearly understood, its effects on business, society, and the environment, and how it can be applied to shape a responsive, green, and equitable now meaningfully and in the future.
State of the Field
The principle of CSR is derived from the statement that businesses should not only focus on profit maximization but also bear societal responsibilities towards the community. Primary pieces like Howard R. Bowen’s “Social Responsibilities of the Businessman” (1953) helped establish the underlying convergence for the further systematization of Corporate Social Responsibility regarding its native theories and the joint practices. Bowen’s central idea of his work contends that firms should strive to establish a corporate order—undertaking business-specific policies, decision-making, and choices—which are happening in society and being pursued by individuals more.
During the late 1960s and 1970s, CSR marked its ascension as a theoretical frame of reference, and scholars explored the contour of the concept. The scholar Keith Davis’s “Can Businesses Disregard Social Responsibilities?” (1960) argued that businesses should consider the social repercussions of their actions and accept liability for their effects on society. At the time, Milton Friedman’s ‘The Social Responsibility of Business is to Increase its Profits’ essay (1970) gave the polar opposite view of this concept by stating that businesses are obliged monetarily solely to the shareholders’ gain as long as they work within legal and ethical standards.
Scholars proposed various theoretical frameworks to conceptualize and operationalizing CSR as the discourse progressed. Archie B. Carroll’s “Pyramid of Corporate Social Responsibility” (1991) suggested that businesses have four responsibilities: markets, systems, laws, ethics, and giving of the. Freeman’s “Stakeholder Theory” in 1984 also had a similar perspective that businesses should be concerned with everybody else affected by their operations, such as employees, customers, suppliers, and local communities, as part of their decision-making processes.
In the 1990s and at the beginning of the 21st century, empirical investigations on the influence of CSR on a firm’s financial performance made waves, with experts trying to find a reliable way to quantify and measure such impacts. Some of the scholars, for example, Michael E Porter and Mark R Kramer, believe that the degree of involvement of various social entities is a strategic component of CSR, which firms, therefore, can create shared value by addressing societal problems that have areas of business operations intersection with firms (Kumari & Joshi, 2023). David Vogel, another group, criticized CSR as public relations in the government’s disguise that claims that companies, in a more crucial part, commit to abusing the money spent for virtue-signalling purposes while focusing solely on a search to profit maximizations.
In terms of methodology, researchers have used approaches like content analysis, surveys and interviews with stakeholders, and quantitative assessment of financial performance indicators to measure and evaluate the level of CSR. Nevertheless, many remarkable issues, such as the absence of criteria and the idea of CSR reporting voluntarily, have presented obstacles in comparing and evaluating CSR practices across organizations and sectors.
Critical Assessment
Even with the undeniable scholarly research in Corporate Social Responsibility (CSR) that has unearthed numerous valuable perspectives and meanings, some shortcomings and problems can only be handled adequately if they are critically analyzed and reflected upon. One of the most considerable controversies is associated with suspicions raised against the basis and motivations of CSR that the company employ; thus, the purposefulness and justification of these initiatives are also doubted.
Critics have mocked various companies which came into CSR only for a spin to let their image or reputations soar. The point is that CSR is only a tool to make money, given the absence of genuine care and concern. This criticism examines deep-seated conditions that provoke such a move, asserting that companies use CSR to engage in public relations exercises where reasons for harmful practices are deflected or paint their organizations in a good picture (Lingnau et al., 2022). From one point of view, CSR is how businesses use CSR as a strategic tool to maintain the social license to operate and steer clear of any criticisms or deflect potential intervention of regulators.
This criticism seriously questions the CSR discourse itself, asking if corporations sincerely act in the interest of society or not to upgrade their profit motive. This makes people wonder whether CSR activities can stand at the forefront of solving societal and environmental dilemmas or remain a cover-up for business-as-usual practices that produce profits over lasting societal changes.
The problematic in the arguably of the methodological problem is quantifying and measuring the effects of CSR initiatives. The absence of comparatively uniform metrics and self-reported corporate data has caused significant alarm about the effectiveness of CSR appraisal. Such diversity without standard criteria and capability of measuring parameters has posed problems in how these CSR activities can be compared or benchmarked within companies or different industries, leading to the incorrect assessment of their actual impact and effectiveness.
However, self-reporting, which is the voluntary nature of CSR reporting and has no mandatory disclosure requirements, has been the cause of increasing criticism about greenwashing and selective disclosure practices (Getele et al., 2022). Companies do not have to obey any legally binding norms or third-party verification. Such companies may trick their way into disclosing only favourable information and either obscure the less-glamorous details or omit them entirely from the public. This way, they will engage in a corporate spin representing an unreal or enhanced image of their CSR initiatives.
However, the current practice literature has shortcomings, such as needing help considering the complex intersections and potential trade-offs between economic factors, social impacts, and environmental factors. Indeed, some scholars claim that CSR can be the ‘win-win’ solution that simultaneously adopts the approach of ‘social well-being’ and ‘profit gain’. Still, they do not accept that these two goals are in contradiction in some situations. A more subtle reasoning and a comprehensive approach to literature which depicted tensions and grey areas associated with fulfilling the needs of multiple stakeholders concurrently would be of great help.
The situation is challenging to manage sometimes as a business is expected to make choices that involve sacrificing short-term gains in favour of goals for society and the environment in the long run. However, literature still needs to provide a solid foundation for conflicts that may arise when something should be sustainable and ethical.
Besides, the main topic of the study of large corporations is either multinational corporations (MNCs) or small and medium-sized enterprises (SMEs). On the other hand, the SMEs are challenging to study because of the risk of being overlooked. SMEs are frequently portrayed as epitomizing the philosophy of “one size fits all” in the existing research literature. This philosophy presupposes that SMEs are burdened with resource constraints and peculiar organizational structures (Widyawati, 2020). The inspection at this moment is especially critical because of the significant number of SMEs spread all over the economy and their participation in the country’s development activities together with fighting local problems.
Conclusion and Implications
The scholarly discourse on Corporate Social Responsibility (CSR) has seen a remarkable evolution during the previous three decades, mirroring the enhanced apprehension of businesses’ central role in achieving societal and environmental goals. As the idea of CSR changes its position from the fringes to the centre, researchers have given valuable theoretical approaches and empirical findings that have only helped to enrich the understanding of the complicated features of balancing the dual motives: profit maximization and fulfilment of societal responsibilities. Admittedly, these contributions are seen as a projection of the gaps and the limitations, thereby calling for more studies to find solutions.
A provoking question that should, along with time, be studied is publicized; it is the production of more refined and uniform standards for data collection, analysis and quantification of CSR practices. Presently, the situation (environment) is characterized by disparity, which involves companies having different metrics to determine the value of their social impact programs. A common approach also needs to be made possible to compare and benchmark organizations from other branches of the economy, jeopardizing the credibility and the effect of CSR procedures. Researchers can promote higher transparency, accountability, and comparability by implementing and agreeing on the scores used to assess CSR initiatives (Saini et al., 2023). As a result, stakeholders’ decision-making process would be closer to reality, and their outcomes would be more accurate.
Furthermore, future research should consider an even more comprehensive and integrated method that can assist in discovering and addressing the intricacies of the complexity of the various economic, social, and environmental factors. The ongoing literature commonly assigns these three dimensions as distinct and separate one from the other, not considering the absolute need to capture the comprehensive interactions and possible compromises that might arise when aiming to balance profit with ecological and social requirements. A more diverse and interconnected perspective is needed to comprehend the complex system of connections and power relations that stimulate CSR campaigns’ results and to design approaches that incorporate these seemingly incompatible factors in one CSR strategy.
However, it is noteworthy that the recurring interest in mega-corporations in CSR literature has raised some questions about the issues and opportunities distinctive to small and medium enterprises (SMEs). The businesses of these micro-sized organizations frequently operate within a localized context of their own that has its own organizational structure, resource constraints and stakeholder networks, which are unique and may significantly differ from those of their larger counterparts. Tomorrow, research should not be limited to the area, but it should penetrate the mysteries of how CSR is pronounced in SMEs and its effects (Freitas et al., 2020). Through various situations, including limited resources and diverse stakeholder groups, the researcher can assist the less privileged NGOs, small enterprises and fully cooperative communities by developing specific and contextually applicable CSR structures.
Moreover, this multidisciplinary strategy should involve establishing networks with practitioners, policymakers, and other relevant actors, ultimately becoming a platform for forming a knowledge bank that combines the science of medicine with the art of a patient’s life. Through actively involving research professionals with industry practitioners in CSR, researchers may obtain meaningful firsthand experiences of the practical side, complexities, and challenges of different strategies devised for CSR implementation, thus supplying the basis for more empirical and actionable frameworks.
References
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