Creating Shared Value From Corporate Social Responsibility Commerce Essay

Creating Shared Value From Corporate affectionate Responsibility Commerce EssayThis enquiry is an investigation into Corporate Social Responsibility (CSR) and what it means to the companies that practice it. The radical remains an intriguing one beca workout it raises questions rough a companions responsibility towards friendship and whether it is good or bad for businesses (Crane et al, 2008). thither is a need to substantiate why a corporation should be concern about what is happening to the communities they are operating in, the push of its operation and whether it finish assist without compromising its bottom- cable television.The concept of CSR came in to digest in the early 1950 (Crane et al, 2008), it is now broadly speaking accepted by most companies and is expected by communities (Porter and Kramer 2006, Savitz and weber 2006, B wiped out(p)field 2008). This has come about because of several events that boodleed in the USA, causing negative impact on communities for example the Vietnam War 1960, the Watergate s cigaretdal during the Nixon era, the crude oil embargo 1973, later Enron collapse, Exxon Valdez oil spill (Argenti 2003) and recently the BP oil spill in the Gulf of Mexico. Another factor has been globalisation by large companies in less positive countries whereby there has been human and milieual consequences (Blowfield et al 2008 92).These events have propelled the rise of pressure groups, public and media scrutiny and g overnment legislations on brotherly and environmental issues and so encouraging companies to be ethical, accountable and liquid at all levels of management and not sightly at operational level. However CSR has been generally voluntary with philanthropic and charitable activities (Crane et al, 2008) aimed towards the environment and the immediate community because of these practices, CSR has been perceived by m any(prenominal) to be a marketing tool and for enhancing the image and reputation of the conjunc tion (Savitz and Weber, 2006). in that locationfore companies need to exclude public suspicion by finding ways to satisfying the stakeholders, make a profit and be competitive in a sustainable come such as building on material resources, cultural advantages and, stakeholder connection (Savitz and Weber 2006 145). As a result there is a need to understand how companies house secure long-term economic performance by avoiding short-term behaviour that is societally detrimental or environmentally wasteful (Porter and Kramer 2006 6). This send packing be achieved by making CSR part of core company strategies and integrated into the apprize ambit to create shared value and gain competitive advantage over rivals (Porter and Kramer 2006 13). However, Blowfield (2008) states that the social responsibilities of multinationals varies from small or medium businesses.Overall aim and objectivesFollowing what has been mentioned above the overall aim of this research is to provide an unders tanding on how CSR loafer add value to the company in the course of get hold ofing stakeholders expectations, be profitable and competitive in a socially acceptable manner. There is a lot of literature on CSR, however not a lot has been written on how CSR in the value drawstring good deal create a shared value for the stakeholders and the business simultaneously. With regards to the value chain most literature on it is related to gaining competitive advantages and profits making but little impact on societal needs. Therefore this research shall investigate CSR in the context of the value chain. However the investigation extends to the offer chain which, if sustainable creates the value chain. To urinate the overall research aim, the following objectives have first to be realized.Critical examine the concepts CSR shared value in relationCritically evaluate the consolidation of CSR into the supply and value chain.Analyse how practices of CSR can create shared values.Draw conclu sion on the findings of CSR practices in the supply and value chain.This allows further questions to be raiseWhy is it, that CSR means different things to different people?What is the relationship of CSR practices, within in the supply chain and the value chain?How can value gained from CSR be musical rhythmd?It is hoped that this research leave make a contribution to the current literature of CSR practices. Consequently offer an understanding of CSR in the supply and value chain and the benefit of value creation it can offer. This choose is suitable for other business management students or academic researchers that whitethorn wish to subscribe more than on the subject of CSR and its purpose in the supply and value chain.Overview of literatureThe first aim of this literature review is to identify the most important concepts in the field of CSR, identify definitions and key issues that arise. Secondly the background and similarities and differences between the supply and value chains will be considered. The final discussion shall be on the relationship of the value chains and CSR. The research within this literature review focuses on objectives 1 and 2 as driven out above.3.1 CSR ConceptCSR not a relatively new concept it can be traced back centuries, the mid 1800s the industrial revolution brought about the first steps of CSR as businesses where concerned with their employees welfare and increasing their productivity (Crane et al, 2008). However CSR really gained importance in the 1950s it was known as the philanthropic era (Crane et al, 2008). One of the first CSR definitions came from Howard Bowen who make the link between business responsibilities and communities expectations.It (SR) refers to the obligations of businessmen to charter those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society (Crane et al 2008 25).Bowens definition places a social obligation o n businesses when making decisions to consider their impact on the communities. However in contrast to Bowen, Milton Friedman sees management as having only one responsibility to maximize profits of its stockholders (Friedman, 1970). This leads to the shareholder theory, which suggests that companys managers, are supposed to spend corporate funds only in ways real by the shareholders (Smith, 2003). Therefore managers are not to spend this fund on non-profitable activities that does not increase shareholders value. Friedman does state that while it is true that managers should increase profit for the shareholder they need to play by the basic rules of the society (Carroll, 1991). However individuals and groups are affected by negative business activities and operation. These are the stakeholders internal and external of the company to whom they have obligation and responsibilities (Galbreath, 2009).In contrast to shareholder theory Freeman citied in Crane et al 2008 69 states that m anagers have a moral commerce to protect all stakeholders.To merge the stakeholder and the shareholder theory Carroll introduced the Pyramid of Corporate Social Responsibility.Figure 1 Source (Carroll, 1991)The pyramid, attempt to summaries and classify the numerous definitions of what pull in CSR within four categories economic, legal, ethical and philanthropic (Carroll, 1991). However it gives the impression that economic responsibility is the first step toward CSR and once achieved the next levels can be essay and that philanthropic responsibility can only be achieved when all the levels are completed. Secondly ethical and legal responsibilities are pursued concurrently with any application gear towards for profit maximisation and cannot be practise separately as it frequently required by the law. Philanthropic responsibility can be say to be voluntary and companies does not have to contribute to the communities that should the responsibility for governments.To address the c onfusion, the four tiers can be further broken down. The Triple Bottom breed (TBL) may better represent the pyramid with the trine Ps (Savitz and Weber, 2006).TBL like Carrolls Pyramid suggest that companies should take care not only of their bottom line but also their social/ethical and environment bottom lines (Meijer Schuyt, 2005) commonly identified as People, Planet and Profit. The diagram above illustrate that companies can pursue any of the three Ps in any fact order depending on what is priority for the company With these three social responsibilities to focus on companies should depend at, how it can be integrated into the business.3.2 The Supply Chain and the value chainThis chapter shall look at the concept of the supply and value chain along with how economical, social and environmental responsibilities are managed to gain benefits for the stakeholders and the company. The supply chain is defined asThe supply chain is defined by Supply Chain Council (1997) as a term increasingly utilize by logistics professionals it encompasses every effort touchd in producing and delivering a final product, from the suppliers supplier to the customers customer (Lummus Vokurka, 1999) (Lummus Vokurka 1999 11). It is a flow of goods (raw material) and service from a number of suppliers linking together to meet the needs of the customer at the end of the supply chain. From the researchers understanding the supply chain is a business surgical procedure that forms part of the value chain. This understanding comes from the supply chain definition given by Cox citied Lummus Vokurka 1999 11 the function within and outside a company that enable the value chain to make products and provide services to customers.The value chain of a company is a appeal of activities that are performed to founding, produce, market, deliver and place upright its product (Porter, 1998). It is a combination of two types of value adding activities primary and support (Porter, 1998) with in the company that creates economic and social value (Porter and Kramer 2006 13). Both the supply and value chains are vital for the integration and practice of CSR. The supply chain is more about effective and efficient processes from supplier/ producer to costumer, whilst the value chain activities links together to provide value to the stakeholders. Companies must use their supply and value chain to convert social needs and social issues into opportunities with the aim of meet the expectation of their stakeholders and achieve a unique strategic identify.3.3 From CSR to creating shared valuedTraditionally companies carried out CSR through cash donation, charitable and philanthropic activities but these social initiative according to Michael Porter are however not effective as its lots not carefully planned and not part of company strategies hence in the long term it is not effective (Porter Kramer, 2006).However, companies are increasingly aware that they can have long-term suc cess only if they can create the same value for shareholders and the community in which they operate (Brabeck-Letmathe 2010). jibe to Nestl Chairman Peter Brabeck-Letmathe, for CSR to be a success for the company it needs to be part of the business function of creating value for shareholders and communities. Companies need to be able to integrate unmet social needs of employees and communities into the core business strategy and so fuse all stakeholders values. Nestl employs the approach of Creating Shared Value (CSV) as a CSR practice. It involves addressing social causes that can in the long term provide added value for the shareholders and community. explore convention and MethodologyA research is something that is underinterpreted by the people to find out things in a systematic way to increase knowledge (Saunders et al 20033). These involve finding a research methodological digest that can explain how the research is designed, how contractive information will be collected, how the findings will be analysed and presented and also account for any limitations. In order to find the best research approach and the research strategy the researcher will follow the research process onion developed by (Saunders et al 2003 83). This process allow for a systematic approach to solvent the research questions and consequently meet the objectives set out above. The research methodology has five sub headings starting with the research philosophical system and ending with selective information collection method at the centre of the onion.Figure 2 The seek bring Onion Source Saunders et al 2003 834.1 Research PhilosophyThis is about the way knowledge is gain and how it is developed. There are three recognised research philosophies positivism, interpretivism and realism. Positivism research process attempt to copy the method of the natural science and takes the role of an objective analyst, collecting selective information from the social external instauration in a value free manner (Saunders et al, 2003). Knowledge by this method is developed by reducing phenomena to simple elements representing general laws (Blumberg et al 2005 23). While, the philosophy of interpretivism is motivated by subjective meaning of human interest (Saunders et al, 2003). Realism shares the philosophies of both positivism and interpretivism but at the same time stressing the error of perusal people as objects in the style of natural science (Saunders et al, 2003). The philosophy framework pick out shall be the interpretivism, for the reason that corporate social responsibilities in the supply and value chain are complex and unique phenomenon which cannot be generalised in a value free manner (Saunders et al, 2003). Furthermore, social phenomenon cannot be mute from just facts but from the exploration of people different experiences and why these differences result in the different fashionion and meanings people give to the social world (Blumberg et al 200521).4. 2 Research approachThis involves the use of theory and the design of the research (Saunders et al, 2003). The theory approach includes inductive and deductive whilst the latter involves soft and quantitative approach.4.2.1 DeductiveThis approached is adopted for scientific researchers were by a hypothesis is deducted and tested rigorously from a theory by the use of the enamour research strategy (Saunders et al, 2003). For the deduction to be correct it must be both true and effectual (Blumberg et al, 2005).4.2.2 InductiveThis involves building theory and defining the hypothesis by observation of empirical data (Saunders et al 2003479). This study will have an inductive approach with the aims to understand why something is occurring and to build the theory by investigating CSR in the supply and have a bun in the oven why it influences the value chain and so infer a hypothesis that will answer the research questions.4.2.3 Qualitative vs. quantitativeThese two approaches are gener ally used to gather data for unique phenomenon. Quantitative approach relies on gathering of numerical data and figures only. The objective of this approach to seek answers by measuring, analysis and interpretation of data with the aid of computer programmes (Saunders et al, 2003) (Zikmund, 2003). Such quantitative data gathered from large scale surveys or from electronic database are suitable for descriptive and causal studies (Hair et al, 2003).Qualitative approach involves the gathering of non numerical data (sentences or narratives) (Blumberg et al, 2005). The researcher has more control over the type of information gathered though leading or probing questions (Blumberg et al, 2005) or if collecting primary data through observation method, decisions can be taken on how and where the study will take place (Blumberg et al, 2005). Typically this study requires smaller samples or typesetters role studies and it is best suited for exploratory studies (Hair et al, 2003).4.3 Research strategyResearch strategy can be described as tool(s) utilised to answer the research questions. Saunders et al (2003) identify six main strategies experiments, Survey, case study, grounded theory, ethnography and action research that can be used, depending on the research approach selected.A case study is defined as a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using eight-fold sources of evidence (Saunders et al 200393) In this research a case study strategy will be used because of its ability to provide answers to the why and how questions. Saunders et al, states that a simple and well constructed case study can be used to challenge existing theory and provide source to hypothesis (Saunders et al, 2003).4.4 Time horizonsThis involves deciding whether the research will be a snap shot taken a point in time (cross-sectional) or be a representation of event over a long period of time (lon gitudinal studies) (Saunders et al 200395).This research will utilise a snapshot approach or cross sectional studies because the research is not interested in change or development (Saunders et al, 2003) but at a point in time where the supply chain and value chain are influence by CSR practices.4.4.1 Research purposeSaunders et al states that research enquires can be classified in terms of their purpose. These classifications include exploratory, descriptive or explanatory studies (Saunders et al, 2003). The purpose of this study is classified as an exploratory, whose objective is to find what is happening to seek new insight to ask questions and to assess phenomena in a new light (Saunders et al, 2003).The exploratory study may be achieved by the use of both qualitative and quantitative tools but is most dependent on qualitative approach (Blumberg et al, 2005).4.5 Data collection methodsData is collected depending on the nature of the research (Hair et al, 2003). As mentioned abo ve this study is exploratory with the aim of exploring relevant literature and interviewing specialist on the subject (Saunders et al, 2003). Exploratory research provides the secondary data and primary data needed for analysis. The research aims to make use of both secondary and primary data. The former relates to data previously collected for other purposes and these are classified as documentary data, survey- based data and those complied from multiple sources (Saunders et al, 2003). For this research, secondary data regarding CSR practices shall be collected from relevant companies websites. In contrast primary data are collected for specific purposes through observation of peoples behaviour or utilizing semi and in-depth interviews (Saunders et al, 2003).Primary data can be collected by two methods, observation and survey which are further sub-divided into human and electronic observation as well as self completion and interviewer administered surveys (Hair et al, 2003). In th is study primary data will be collected via interviewer administered surveys of individuals (Hair et al 125). This approach is particularly helpful in collecting valid and reliable data (Saunders et al 2003 245).4.5.1 InterviewsThe primary data can collected from structured, semi-structured and unstructured interviews. This study shall employ a semi structured approach which is often used in exploratory research. This type of interview usually starts with specific questions but the respondents are permitted to follow his or her own thoughts subsequently (Blumberg et al, 2005). The interviewer has the flexibility to escape or raise new questions depending on the organisation or change the order of the questions to suit the flow of the conversation (Saunders et al, 2003). This type of interview being qualitative in nature requires that data are collected by note taking or by tape- recording (Saunders et al, 2003).4.5.2 SamplingSampling is the technique that enables the diminution of data by selecting only part of the population rather than all possible cases or elements (Saunders et al, 2003) due to time constraint. There are two approaches to choosing the appropriate sample chance or non-probability sampling. In probability sampling each case or element of the population has known and none zero probability of being selected randomly (Saunders et al, 2003 486). While, for non-probability sampling the probability of each case or element being selected is not known (Saunders et al, 2003). Non probability methods include quota, purposive, snowball, self- selection and gimmick sampling. Non probability will be best suited for this study as it allow for the selection of participants that can help answer the research questions and meet set objectives. This type of sampling is used when the researcher wishes to select cases that are particularly informative (Saunders et al, 2003).Data Analysis and interpretationData analysis involves managing large fare of data co llected by summarising and arranging it in a meaningful format (Zikmund, 2003). Saunders et al put forward two strategies for analysis of qualitative data these are theoretical or descriptive frameworks (Saunders et al, 2003). The first strategy of theoretical framework relies on the analysis of data according to a deductive position where the use of existing theory is needed to formulate research questions. The second strategy entail an inductive position whereby the descriptive framework is used to start and direct the analysis of your data (Saunders et al 389) by transforming data in a form easy to interpret (Zikmund, 2003). This research will make use of the second strategy descriptive framework, in order to organise the case study on the basis of description of the general characteristics and relations to the research questions (Yin, 1994).Research LimitationLimitations should to be taken into consideration while conducting a research. This research will be investigating multip le case studies as oppose to just a single case study. This is because with multiple case studies their results are considered more robust (Blumberg et al 2005 376). However, it demands a lot of thinking on how to best select the appropriate case studies for the required evidence (ibid).The research also utilise a range of academic literatures and reputable publications. However, the literature listed in the reference may not include all of the best up-to-date sources. Many other sources that could have been used but decision was taken to focus on particular literature mainly due to having access to them albeit some dated from the year 1991 and 2003. So the research structure depends on the type of sources found.Validity and reliabilityAccording to Saunders et al reducing the possibility of getting the answer wrong means that attention has to be paid to two particular emphases on research design reliability and validity (Saunders et al 2003100).ReliabilityThis means that the resear ch can only be characterised as reliable, firstly if it can yield the same results consistently free from error (Saunders et al, 2003) (Zikmund, 2003). Secondly, the same observation ought to be observed by others and thirdly raw data has to be interpreted in a transparent way (Saunders et al 2003101). Reliability of a research can be tested by repeatability and internal consistency. The former involves, similar scale or measure to the same respondents at different times to concur the same result (Zikmund, 2003). If the results gathered at the different times are dissimilar this indicates a low degree of reliability (Zikmund, 2003). However this test is more suitable for longitudinal studies where there is little time constraint. Internal consistency involve the measure of homogeneousness where by all similar questions are grouped together in a questionnaire to measure the same concept (Zikmund, 2003).ValidityOn the other hand, this is about how data collection methods accurately m easure what is intended to be measured and whether the findings are really about what they appear to be about (Saunders et al 2003101, 492). There are three tests to be used when testing quality of case studies these are construct validity, internal validity and external validity (Yin 1994 33).Table 1, summaries the three tests for validating of research.TestDescriptionCase study TacticConstruct ValidityEstablishing correct operational measures for the concept being studiedUse of multiple sources of evidenceEstablish chain of evidenceHave key information review draft case study reportInternal ValidityEstablishing a casual relationship, whereby certain conditions are shown to lead to other conditions, as distinguished from spurious relationshipDo pattern matchingDo explanation- buildingDo time- series analysisExternal ValidityEstablishing the domain to which a study findings can be generalisedUse replication logic in multiple- case studies.Table 1 Quality Test Description and case st udy tactic (Yin 1994 33)In this research, certain measures will be employed to increase the validity. To increases the construct validity it is import prior to the interview the questionnaire is pilot tested so as to ensure that respondents will have no problem to understand and answer questions (Saunders et al 2003 308). A tape recorder will be verified to ensure that data can be recorded proficiently and this should allow focus on the interview and not note taking. The benefit with a tape recorder is that it can be replayed whenever required.Internal validity concerns with explanatory studies, where the research guess to determine casual relationship between variables (Saunders et al, 2003). This research is exploratory and the internal validity of this study is not relevant.External validity is concerned with knowing that the results of the case studies are generalise or not (Saunders et al, 2003) and retested through replication (Yin, 1994) to other research settings.Timescale