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INTRODUCTION
T
he terms like corporate social responsibility, corporate social
performance, strategic volunteerism, enviropreneurial marketing,
and strategic philanthropy have infiltrated the mainstream business
literature since long and their integration with and marketing strategy is
being seen as an effective socio-marketing strategy (Turban & Greening,
1997). The Corporate Social Responsibility (CSR) concept has been
increasingly in picture and in demand for its greater transparency (Ogrizek,
2002) regarding organizational operation environment and performance.
The organizations are being seen to show remarkable concern in undertaking
social initiatives in a highly competitive environment. Further, the growth
in socially responsible investments and in CSR awareness among public
have led to the thinking that the successful firm of future will be the firms
which will proactively balance short-term financial goals with long-term
sustainable corporate brand building (Ogrizek, 2002, Stroup & Newbert,
1987 and Varadarajan & Menon, 1988).
The factors that are driving this move towards corporate social
responsibility include new concerns and expectations of stakeholders,
citizens, consumers, public authorities and investors, influence of social
criteria in the investment decisions of individuals and institutions both as
consumers and as investors, increased concern about the damage caused
by economic activities to the environment, and transparency of business
activities brought about by the media and modern information and
communication technologies. Generally, CSR is considered as firm’s
obligation to protect and improve welfare of the society and its organization,
now as well as in future (Staples 2004), through various business and
social actions (Sen and Bhattacharya, 2001; Turban and Greening, 1997),
and ensures that it generates equitable and sustainable benefits on the
various stakeholders. Chakaraborty et al. (2004) have viewed CSR as a
mean of achieving commercial success in ways that honors ethical values,
respect people, communities and natural environment, and encompasses
all those actions of the organizations which affect the society and its well
being. The main fundamental embedded in CSR, according to them, is that
no business corporate can act as isolated from broader issues of society.
According to Ogrizek (2002), CSR is all about competing beyond technology,
quality, services and price, in fact, all areas where competitive advantage
is short-lived or lacking. He defines the scope of CSR to embrace not only
charitable, philanthropy and community involvement activities but also
business practices including environment management system, human
resources policy, and strategic investment for sustainable future. Rao (2005)
asserted organizations operating with good governance in the interests of
all stakeholders, ensuring to add to company’s wealth by following the
laws and customs of the society, developing the capabilities of all in the
enterprise and particularly of the disadvantaged, sensitivity to environmental
and ecological effects of their actions, and taking some responsibility for
improving the life of the community, can be said to be following CSR
practices.
Impact-wise, CSR has been considered as one of the antecedents for
economic performance and also as a measure of proactive social responsive
view (McGee, 1998). Maignan & Farrell (2004) have conceptualized CSR
CSR EFFECTS
The increase in CSR initiatives are being taken by companies that have
increasingly recognized CSR as a key factor to success (Liechtenstein,
Drumwright & Braig, 2004). Majority of the past researches on corporate
social performance have been basically conducted to find out the
relationship between corporate social involvement and financial performance
(Maignan & Farrell, 2001). The effects of CSR on economic performance
are found to be inconsistent in the literature (Maignan and Farrell, 2001;
Sen and Bhattacharya, 2001; Stanwick and Stanwick, 1998 and Coffey
and Fryxell, 1991). The research has also begun to focus on the effects of
CSR on employees and customers (Maignan and Farrell, 2001, Ellen, Mohr
and Webb, 2000; Brown & Dacin, 1997; Creyer & Ross, 1997; Murray
and Vogel, 1997 and Turban & Greening, 1997). Ellen, Mohr and Webb
(2000) found that consumers attitudes vary with the type of cause-related
marketing efforts taken by the retailer companies. Murray and Vogel (1997)
expressed that managers are more willing to consume from acompany
which is associated with CSR. Creyer and Ross (1997) found a positive
association between ethics and consumer choices. Because of the positive
relationship between CSR and Business performance, companies are found
to be successfully integrating public purpose marketing with their economic-
oriented marketing strategies (Handelman and Arnold, 1999’ Drumwright,
1996). The present paper, in addition to economic performance and
relationship based measures, has also included social measures to assess
the overall impact of CSR. The existing literature on CSR and its return on
social investment is found to be missing in the literature. CSR, being
considered as social investment (Ogrizek, 2002; Stroup and Newbert, 1987),
as such the cost-benefit analysis of company’s CSR efforts and their
return on investment can be measured to assess the social performance of
the organization. In addition, the Four C Methodology, comprising
construction, content, certainty and continuity, given by Lingane and Olsen
(2004) can be considered for the social investment analysis.
CONCEPTUAL FRAMEWORK
The conceptual framework for CSR proposed here comprises five
antecedents-organization culture, human resources, product/services, social
Organisation
Culture
Relationship
Human Measures
Resources
Products/
Services Economic CSR Brand
Performance Image Equity
Measures
Regulatory
Environment
Social COMPETITIVE
Measures ADVANTAGE
Social Development
Activities
quality and suggested the role of job autonomy in providing the necessary
behavioral discretion for employees to be able to perform citizenship
behaviors. Thus, to what extent the organizations satisfy its employees and
retain them to contribute maximally to organizational goals will be the
significant implications of the human resources domain of the CSR. Hence,
Hypothesis 2: Higher the degree of service to employees, better will be the
long-term relationship with employees, and higher will be orientation of
organization towards corporate social responsibility.
Product and Service : Delivering continually qualitative products and
services to the customers is valued as the key component for the sustainable
success of the business operations (Henard & Szymanski, 2001), which
demands adequate investment on research and development and market
research efforts. According to Chakraborty et al., (2004), corporate social
responsibility starts with producing quality product using fair process and
with ploughing back a substantial part of profits so that the products can be
further improved, delivered faster and produced at much lower costs. Though
no company can neglect to focus on its products and services, but
involvement of the company in community issues can help to improve the
product acceptability by making the customers and employee aware about
the role of the organization in various philanthropic, cause-related and
charitable activities. Thus, the hypothesis,
Hypothesis 3: Better the quality of product, better will be the degree of
economic outcomes. Higher will be the retention rate and higher will be
the contribution to the community services
Social Development Activities: In hyper competitive atmosphere, growth,
stability, economic existence and social orientation of an organization
strongly depends upon its ability to perform social responsibility towards
community. The philanthropic or charitable activities of a business include
voluntary contribution of the business to the society like involvement in
community development or other social programmes. Unlike these voluntary
programmes, cause-related social programmes always contribute to the
economic performance positively (Varadarajan and Menon, 1988). The
social development activities also include in its domain the co-opting and
green-environment concerned activities. Stroup & Newbert (1987) reflected
that philanthropy and social responsiveness, undertaken by corporations
MANAGERIAL IMPLICATIONS
Corporate Social Responsibility is being considered as a marketing strategy,
which adds to the knowledge of managers and provides broader benefits to
their companies ( Liechtenstein, Drumwright and Braig, 2004) by enhancing
image and building corporate brand equity. The introspection of organization
culture, human resources capital, product/services capital and regulatory
environment can help the managers in understanding the impact of CSR in
strengthening the relationship with stakeholders, enhancing corporate
reputation and ultimately economic/ financial performance. On the contrary,
poor monitoring over CSR antecedents and their relationship with economic,
social and relationship measures or absence of CSR investment or wrong
portfolio investment in CSR can damage company’s reputation, and create
misunderstanding and wrong perceptions about the company’s offering.
Per se, the proper focus on various determinants can help in maintaining
long-term meaningful relationships with stakeholders and contribute to
building strong brand image and competitive advantage over competitors,
which is difficult to imitate (Aaker,1996). Thus, pursuing such type of
study, at local, national or global levels, could provide a roadmap for the
companies to proceed further to strengthen its image, competitive advantage
and credibility from various stakeholders’ perspective. The longitudinal
study on corporate social responsibility in the organizations will surely
contribute to a better understanding of the CSR antecedents and its outcome
and prove to be very beneficial for the organizations which wants to sustain
competitive advantage and excel in the market.
FUTURE RESEARCH
In the wake of its growing significance, pursuing research on CSR has
become essential to establish CSR framework. Though the paper contributes
to building CSR grounding but still further examination of the CSR
antecedents namely organization culture, human resources, products/
services and regulatory environment and their impacts on business
performance viz, economic, social and relationship performance measures
may be analyzed. This makes it essential for the researchers to test various
research propositions made in the paper regarding culture, products/services
and regulatory environment in different settings at various levels. Though
the relationship between corporate social performance and corporate
financial performance has received much attention, but still concrete
relationship between these two could not be identified (Margolis and Walsh
2003). Some researchers have considered positive relationship, some group
of researchers have linked it negatively with the business performance and
some others even have concluded absence of relationship between the two
(Dentchev, 2004). In such circumstances, the model proposed here could
strengthen the CSR conceptual framework and may provide a new path for
analyzing this relationship. Further, the other research implications is that
can CSR be considered as a marketing tool for the companies? These and
other related issues have to be resolved in the further research.
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