This chapter defines the concept of CSR. It gives an overview of its current trends, advantages and disadvantages, the criticism of the concept.
1.1 Defining CSR
The Corporate Social Responsibility has become an important part of doing business nowadays. It is vital for companies to understand its aspects well and be able to meet the stakeholders’ expectations. However, this concept is pretty new and not fully understood. The companies either do not use it to full extent or even abuse it and cause negativity with that.
What exactly is CSR?
Business Leaders Forum defines it as a voluntary commitment of companies to behave responsibly towards the environment and society in which they operate.1
Corporate social responsibility, CSR focuses on creating social and environmental value in addition to economic performance, commonly denominated as the people, planet and profit dimensions. Businesses themselves decide to what extent they are willing to assume
responsibility for developmental processes taking place within and beyond the company walls.2
There are characteristic features of the concept. They include:
• Philanthropy – the company is engaged in all the activities voluntarily, not obligated by law.
• Stakeholders are a necessary part of it.
1 BUSINESS LEADERS FORUM. What is CSR [online]. [Accessed 1 December 2020]. Available from:
https://www.csr-online.cz/en/what-is-csr/
2 INGRAM, V. Corporate Social Responsibility: the role of public policy. A systematic literature review of the effects of government supported interventions on the corporate social responsibility (CSR) behaviour of enterprises in developing countries. IOB. [online]. Study. 2013. [Accessed 1 December 2020]. Available from:
https://www.government.nl/documents/reports/2013/05/14/corporate-social-responsibility-the-role-of-public-policy
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• Long-term perspective – CSR activities are implemented long-term and bad economic situation is not an excuse to end it.
• Credibility – “CSR contributes to increased confidence in the company; activities must be transparent, durable and authentic.3”
1.2 Current trends
CSR was commonly implemented mostly by larger, multinational companies, in industry and trade. Most frequently in oil, consumer retail products and agriculture sectors. Many of those have been intensively covered by media and have been a part of academic and societal debates concerning the social and environmental performance of enterprises. However, nowadays CSR appears to be spreading rapidly to companies from emerging and developing countries and among all types of enterprises4, including the small ones.
We can see the common patterns among companies engaged in CSR, they include cooperation with government, non-profit organizations, researchers, institution. Fighting against gender discrimination.5 Data privacy, which is already being regulated by the government (e.g. GDPR by European Union). Trainings conducted on the national and international levels about issues on the corporate world.
Getting your employees aboard the sustainability journey is a necessary first step to implementing responsible marketing strategies that will have social impact.6 Therefore companies are trying to engage their employees in CSR activities or might even take this aspect into consideration when considering employing a new one.
3 BUSINESS LEADERS FORUM. What is CSR [online]. [Accessed 1 December 2020]. Available from:
https://www.csr-online.cz/en/what-is-csr/
4 INGRAM, V. Corporate Social Responsibility: the role of public policy. A systematic literature review of the effects of government supported interventions on the corporate social responsibility (CSR) behaviour of enterprises in developing countries. IOB. [online]. Study. 2013. [Accessed 1 December 2020]. Available from:
https://www.government.nl/documents/reports/2013/05/14/corporate-social-responsibility-the-role-of-public-policy
5 OECD (2020), Annual Report on the OECD Guidelines for Multinational Enterprises 2019. [online].
[Accessed 1 December 2020]. Available from: http://mneguidelines.oecd.org/2019-Annual-Report-MNE-Guidelines-EN.pdf
6 BHATTACHARYA, C.B. Responsible Marketing: Doing Well by Doing Good. GfK Marketing Intelligence Review, 05, 2016, vol. 8, no. 1. pp. 8-17 ProQuest Central. ISSN 18655866.
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Customers, on the other hand, are also changing their behaviour and their references.
According to a research conducted by Accenture, certain factors make businesses more attractive. The following were considered the most important by consumers older than 18 years: highly ethical way of resource seeking, supporting societal causes that consumers believe in, minimizing negative impact on environment, being sustainable, transparency. 7
1.3 CSR as a Marketing Tool
CSR has become an important part of marketing strategy in various industries. Investment in CSR is a marketing investment.8
Hadjikhani in his work is considering CSR as a marketing strategy in foreign markets, which is particularly interesting, since the consumer behaviour can significantly differ among states.
He is studying the case of Korean Multinational corporations in the Chinese market. I consider his findings to be widely applicable.
As important actions of corporations were mentioned proactiveness towards socially responsible marketing, recognition of consumers’ right to information and protection, the need to respond to the customers to adapt to their needs. The business mission was defined in broad social terms rather than along narrow product lines. Marketing managers were
required to be engaged in community service on a daily basis, to invest regularly in the
environmentally friendly products and factories. There are three degrees of specificity in CSR strategy. The first type is a direct commitment towards a specific group, such as consumers, the second type is the commitment towards the general public and the third type concerns employees. “In the first type, the commitment attempted to gain trust and legitimacy, not only from those specific groups, but also they hoped that the diffusion of information would
7 BARTON, R., MORATH, J., QUIRING, K., and THEOFILOU, B. Generation Purpose [online]. rep.
Accenture, 2020. [Accessed 5 January 2021]. Available from: https://www.accenture.com/_acnmedia/PDF-117/Accenture-Generation-P-urpose-PoV.pdf#zoom=40
8 CRANE, A., and DESMOND, J. Societal Marketing and Morality. European Journal of Marketing, 2002, vol.
36, no. 5. pp. 548-569 ProQuest Central. ISSN 03090566. DOI http://dx.doi.org/10.1108/03090560210423014.
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indirectly strengthen the position of the firm among the public, local political units and business firms.”9
Samsung Electronics China’s (SEC) applied its marketing concepts to non-governmental organizations both in urban and rural areas. “The company has been implementing marketing strategies and concepts to be better able to compete for customers and to improve brand image efforts. Towards this end, SEC has more clearly defined its target market away from value-oriented or price conscious consumers towards style- and technology-conscious consumers of premium brands.” 10Marketing specialists and advisers were hired to better communicate company’s principles and ideals to the customers.11
Hohnen, Paul a Jason Potts advise to use a part of the marketing budget to associate your business or brand with a social cause. Mostly companies start with giving responsibilities to carry out CSR activities to existing branches in the firm. Most typically, CSR gets directed to senior public affairs, communications or marketing staff. In other instances, it is placed in the human resources, government affairs, environment, health and safety or legal departments. It is a good place to start, but this approach is rather unsustainable, unless the management is strong and the resources allocated accordingly.12
Companies nowadays know that social and business realities urge them to be active in CSR activities, adopt CSR practices. On the one hand, the company is forced to do the right thing
9 HADJIKHANI, A., JOONG, W.L., and PARK, S. Corporate Social Responsibility as a Marketing Strategy in Foreign Markets. International Marketing Review, 2016, vol. 33, no. 4. pp. 530-554 ProQuest Central. ISSN 02651335. DOI http://dx.doi.org.zdroje.vse.cz:2048/10.1108/IMR-03-2014-0104.
10 HADJIKHANI, A., JOONG, W.L., and PARK, S. Corporate Social Responsibility as a Marketing Strategy in Foreign Markets. International Marketing Review, 2016, vol. 33, no. 4. pp. 530-554 ProQuest Central. ISSN 02651335. DOI http://dx.doi.org.zdroje.vse.cz:2048/10.1108/IMR-03-2014-0104.
11 HADJIKHANI, A., JOONG, W. L., and PARK, S. Corporate Social Responsibility as a Marketing Strategy in Foreign Markets. International Marketing Review, 2016, vol. 33, no. 4. pp. 530-554 ProQuest Central. ISSN 02651335. DOI http://dx.doi.org.zdroje.vse.cz:2048/10.1108/IMR-03-2014-0104.
12 HOHNEN, P., POTTS P. Corporate Social Responsibility: An Implementation Guide for Business.
International Institute for Sustainable Development [online]. 2007, s. 115 [cit. 2021-09- 01]. Available at:
http://www.iisd.org/pdf/2007/csr_guide.pdf
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and do it better, on the other hand, it has a positive impact on key stakeholders, especially consumers.13
1.4 Criticism of CSR
Even though CSR is getting popularity and being highly appreciated by a lot of people, companies and governments, it also gets criticized.
The critique of CSR can be divided into three main groups:
1. Violating obligation to shareholders. Business functions according to the principles of traditional economics theory.
2. Covering wrongdoing. CSR could create distorted view of business. The businesses are considered to be evil for society and executives are thought to only focus on short-term economic profit for themselves. Therefore, to save their reputation the top managers need to do something good.
3. Creating false distinctions. CSR is responsible for creating a set of questionable
dichotomies, such as Economic vs. Social, Business vs. Ethics, Profits vs. Society. They have become adopted by scholars, institutions, they are being taught at MBA programs. 14However, they are not necessarily true and could lead to potential distorted view of our life.
The criticism has its points and they can be considered as reasonable. On the other hand, it would be wrong to generalize that way and accuse all the companies of these. Also, all these factors do not have to be seen as negative.
Traditional economics theory has its disadvantages and is also being widely criticized.
13 RIVERA, J.J., BIGNE, E., and CURRAS-PEREZ, R., 2019. Effects of Corporate Social Responsibility on Consumer Brand Loyalty. Revista Brasileira De Gestão De Negócios, Jul, vol. 21, no. 3, pp. 395-415 ProQuest Central. ISSN 18064892. DOI http://dx.doi.org.zdroje.vse.cz:2048/10.7819/rbgn.v21i3.4003
14 FREEMAN, R.E., and DMYTRIYEV, S. Corporate Social Responsibility and Stakeholder Theory: Learning from each Other. Symphonya, 2017, no. 1. pp. 7-15 ProQuest Central. ISSN 15930300. DOI
http://dx.doi.org/10.4468/2017.1.02freeman.dmytriyev.
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Not all the companies and executives consider the profit to be the most important factor. They might do business to bring the good to the world and help others. On the other hand, there are some who do evil and do not try to cover it up with good actions.
Finally, scholars and business schools are themselves responsible for what they believe to be true and it is their obligation to think critically and discover all the possible interpretations.
Therefore, if companies want to carry out CSR activities, they have to be careful not to fall under false accusations. They should do their business integrally and believe in good social impact of their actions.
1.5 Advantages and disadvantages
Doing business in accordance with CSR principles brings a number of advantages:
• increased credibility of the firm,
• higher attractiveness for investors,
• reputation building and the resulting strong market position,
• competitive differentiation,
• brand visibility for customers,
• increasing productivity and employee loyalty,
• better chances to employ the most talented people,
• CSR is vital for determing work-social identity15,
• reduce the cost of risk-management,
• direct financial savings associated with environmental behaviour (e.g. energy conservation, re-use of waste materials in production),
• increase in turnover,
• increase the quality of products or services16,
• positive impact on human rights.
Nevertheless, there are also some disadvantages to be considered:
• poor transparency,
• low level of data credibility,
15 MADEN, C., ARIKAN, E., TELCI, E. E., KANTUR, D. (2012). Linking corporate social responsibility to corporate reputation: a study on understanding behavioral consequences. Social and Behavioral Sciences, 8th International Strategic Management Conference, 58, (pp. 655-664). Barcelona: Elsevier.
https://dx.doi.org/10.1016/j.sbspro.2012.09.1043
16 BUSINESS LEADERS FORUM. What is CSR [online]. [Accessed 1 December 2020]. Available from:
https://www.csr-online.cz/en/what-is-csr/
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• government interventions,
• disruption of some industries,
• the company’s motivations for engaging in sustainability is often questioned,
• unless the shareholders are aware of company’s actions, they will not reward it,17
• consumers might suspect lower quality of products or services,
• the concept of bad and good products is highly contestable18.
As we can clearly see, the advantages outweigh disadvantages. It is in company’s interest to try to maximize the benefits from being socially responsible and to try to minimize the negative aspects. It would be different from industry to industry and from company to company, but if company pays attention to that, it will beneficial for it and society.
17 BHATTACHARYA, C.B. Responsible Marketing: Doing Well by Doing Good. GfK Marketing Intelligence Review, 05, 2016, vol. 8, no. 1. pp. 8-17 ProQuest Central. ISSN 18655866.
18 CRANE, A., and DESMOND, J. Societal Marketing and Morality. European Journal of Marketing, 2002, vol.
36, no. 5. pp. 548-569 ProQuest Central. ISSN 03090566. DOI http://dx.doi.org/10.1108/03090560210423014.
10