Evaluating Voluntary Corporate Social Responsibility (CSR) HRM 1.1

This essay explores the concept of Corporate Social Responsibility (CSR) and its evolution, examining whether voluntary CSR initiatives enable companies to be a force of good. It defines CSR, traces its historical development, and discusses various theories like Carroll's Pyramid and Stakeholder Theory. The essay highlights how companies like LEGO and Starbucks have implemented CSR to improve societal conditions and the benefits of CSR for both companies and society. It also presents arguments against CSR. The essay concludes by evaluating the effectiveness of voluntary CSR in achieving positive social and environmental impacts.

Corporate Social Responsibility
Class: BSc (Hons) HUMAN
RESOURCES
MANAGEMENT YEAR 1
HRM 1.1
Submitted to: Dr. Sanjeev
GUNGADEEN
Submitted by: Yashwinee
CHICOOREE
Date of submission: 22nd
December 2021

INDIVIDUAL ASSIGNMENT 1
QUESTION:
Can the adoption of voluntary corporate social responsibility (CSR) initiatives
enable companies to act as a force of good? Make a compelling case for or
against CSR.

TABLE OF CONTENTS
INTRODUCTION AND OVERVIEW OF CSR …………………………………………………………………………… 3
WHAT IS CSR?
 Where it was originated? ........................................................................................... 4
 The different theories about CSR ………………………………………………………………………….. 5
 Carroll’s Pyramid …………………………………………………………………………………………………… 5, 6
 Stakeholder Theory ……………………………………………………………………………………………… 6, 7
HOW COMPANIES HAVE USED CSR TO IMPROVE THE CONDITION OF THE SOCIETY…………. 7, 8
 Benefits of CSR for a company................................................................................... 8
 Benefits of CSR on the society ……………………………………………………………………………… 8, 9
COMPANIES WHO USED CSR
 LEGO Industry …………………......……………………………………………………………………………… 9, 10
 Starbucks ………………………….………………………………………………………………………………… 10,11
ARGUMENTS AGAINST CSR ……………………………………………………………………………………………… 11
CONCLUSION …………………………………………………………………………………………………………………… 12
REFERENCES ……………………………………………………………………………………………………………………. 13

INTRODUCTION
Corporate Social Responsibility (CSR) has been in the spotlight in the last decades. It is a broad
concept that has been spreading rapidly in the business environments. It refers to a company’s
voluntary contribution to sustainable development which goes beyond legal requirements. This
is due to the effect that organizations have on society as general since the vast majority of
decisions companies take can influence the stakeholders somehow be it economically, socially
or environmentally (‘Triple Bottom line’). In addition, it is argued that CSR is very beneficial for
companies. Corporate social responsibility is widely followed by almost all organizations
worldwide. However, CSR is not a mandatory activity; it is a voluntary initiative undertaken by
an organization to assist society in all possible ways. It makes the business socially accountable
to its stakeholders and the public. In addition, providing social value is the prime motto of CSR.
In a voluntary approach perspective, CSR can be defined as policies and practices that
organizations engage regarding creating positive social, including environmental and changes

aimed at different stakeholders. It is important to note that this is a voluntary approach.
Voluntary CSR method entails self-imposed requirements as well as negotiated CSR instruments
for the company. Generally, this results from the company's decision to create a set of
regulations. One of the most prominent voluntary ways to CSR is the use of codes of behavior.
This approach highlights the benefits of CSR as an outcome of its voluntary character. Thus, the
purpose of this assignment is to evaluate whether or not the adoption of voluntary corporate
social responsibility initiatives enable companies to act as a force of good.
CORPORATE SOCIAL RESPONSIBILITY: HISTORY
To begin, we must recall that CSR has a centuries-long history of constant evolution. In Ancient
Mesopotamia around 1700 BC, King Hammurabi introduced a code in which builders,
innkeepers or farmers were put to death if their negligence caused the deaths of others, or
major inconvenience to local citizens. CSR emerged mostly in Western countries, most notably
the United States of America. In Ancient Rome, senators grumbled about the failure of
businesses to contribute sufficient taxes to fund their military campaigns. With industrialization,
the impacts of business on society and the environment assumed an entirely new dimension.
From the 1950’s to the present, the concept of CSR has gained considerable acceptance. The
term Corporate Social Responsibility was coined in 1953 by the American economist Howard
Bowen in his publication “Social Responsibility of Businessmen.” Bowen is often referred to as
the Father of CSR. The first company to implement CSR was Shell in 1998.
CSR evolved beyond code of conduct and reporting. It started taking initiative in NGO’s, multi-
stakeholder concept and ethical trading. The meaning has been broadened to include
additional components like community volunteering, social marketing etc. CSR mandates that
the corporation has not only economic and legal obligations but also certain responsibilities to
society that extend beyond these obligations (McGuire). According to ESCAP (2011), companies
raised concerns about the safety of their employees and their influence on society in general in
the late nineteenth century. With the rise of the labor movement and the growth of slums
brought about by the industrial revolution, companies began to provide social assistance on a
limited scale, such as the construction of hospitals and bath-houses and the distribution of food
vouchers.
WHAT ARE THE DIFFERENT THEORIES ABOUT CSR?
The concept of CSR has changed over the years and the alternative interpretations and
strategies that have arisen are listed in the table below:

The Economist, Milton Friedman ( September 1970) says: “The social responsibility of business
is to increase its profits” but over the years a wider view has developed of the framework under
which businesses make decisions and this is really the basis of Archie Carroll’s pyramid – Profit
is important but businesses need to have a wider purpose and responsibilities to society. So, he
developed the CSR Pyramid - “The Four Responsibilities of Businesses” as shown below:

Furthermore, it is important to note that the stakeholders (people who have a stake or claim in
some aspects of a company’s operations, markets and industry) are a key factor for the success
of the CSR practices. Without their engagement, knowledge, skills, talent and loyalty, the
organization could not achieve its objectives. Thus, the stakeholder theory states that the goal
of a business is to maximize value for all stakeholders. Robert Edward Freeman focuses on only
those stakeholders who are vital to the success of a company; these include owners, suppliers,
management, employees, local community and customers. According to R. Edward Freeman
there are many possible stakeholder theories, each of them starts with the normative core
which is the set of sentences that include things like:
1) Corporations ought to be governed…..
2) Managers ought to act……
Figure 1 shows the Relationship between CSR and Stakeholder Theory:
Carroll’s ‘”pyramid of CSR” is perhaps the
most well-known model of CSR. It shows
the different expectations society has of
an organization at any given time and
helps characterize the nature of
businesses’ opportunities to society

Approaches to stakeholder theory are:
 Normative approach: Establishes ethical rules for how companies should handle their
operations
 Descriptive approach: Focuses on the actual behavior of a firm and addresses how
decisions and strategies are made for stakeholder relationships
 Instrumental approach: Describes what happens if a firm behaves in a particular way
To sum up, the stakeholder approach outlines a new capability for companies to develop their
CSR policy. Managers could more easily develop, integrate and realize CSR policy with bigger
influence by managing their stakeholders and engaging in CSR.
HOW COMPANIES HAVE USED CSR TO IMPROVE THE CONDITION OF THE SOCIETY
Corporate Social Responsibility (CSR) is a broad concept which is gaining a lot of importance in
the business world. The review of literature on this concept has demonstrated that it has been
studied in various contexts. However, in the Mauritian context, there have been few studies on
how customers perceive the concept of CSR initiatives of companies and how it influences their
behavior towards the latter. Should companies have objectives about social, environmental and
ethical issues? There is general agreement that firms must adopt a wider perspective when
setting their objectives and not simply aim for profits or expansion. One reason is the greater
adverse publicity given to business activity that is perceived as being damaging to stakeholder
groups and the wider world. Increasingly, influential pressure groups are forcing companies to
reconsider their approach to decision making. Also, legal changes - at local, national and EU
level – have forced companies to refrain from certain practices. Companies can no longer pay
employees low wages or avoid legal responsibility of their products. Managers clearly wish to
avoid conflicts with the laws or consumers; hence other stakeholders are reacting positively to
companies that act in “green” or publicity-generating manner. There are other reasons for
these trends in business objectives – increasingly socially responsible ways. Examples include:

 Firms that promote organic and vegetarian food
 Retailers that emphasize the proportion of their products made from recycled materials
 Businesses that refuse to stock goods that have been tested on animals, or genetically
modified food
 Green washing
Figure 2 shows the benefits of CSR for a company:
Today, companies focus more on generating profits. Companies are increasingly expected to be
purpose-driven and contribute to the greater good as climate change, economic inequality,
poverty and other key issues influencing communities globally. CSR is a crucial element in many
business organizations and it is concerned with how a company tries to be beneficial to all its
stakeholder groups. CSR can also go a long way to improve product quality and service to
customers. The top 10 companies with the best CSR reputation are: Rolex, Lego, Disney, Adidas
Group, Microsoft, Sony, Cannon, Michelin, Netflix and Bosch.
Figure 3 presents the benefits of CSR on the society:

These days, many companies adopt the concept of CSR and indulge in activities that will benefit
both the business and social environment. Some examples are as follows:
1. LEGO commitment to sustainability
LEGO, as one of the world's most famous corporations, seeks not only to encourage
children develop through creative play and learning, but also to promote a healthy planet. It is
the first toy brand to be recognized by the World Wildlife Fund Climate Savers Partner,
indicating its commitment to lowering its carbon footprint. The toymaker intends to employ
ecologically friendly materials in the production of all of its main goods and packaging by 2030
and it has already taken significant efforts toward that objective.
LEGO’s corporate rules include various promises of care for their employees in their company
policies. They claim to prioritize safety, as well as assess their employees on their motivation,
job satisfaction and work life balance and then compare their findings to other companies to
confirm that they are in line with the most effective applications. In 2018, LEGO held a summer
camp for children in China whose parents worked far away from home. This summer camp
allowed the children to stay with their parents and play as a part of their family friendly
workplace. As most modern companies do, LEGO also has human rights and culture policies and
guarantees of equal opportunity and inclusion in their company.
LEGO reduced packaging sizes by 14% between 2013 and 2014, saving around 7,000 tons of
cardboard. The firm then produced 150 pieces manufactured from sustainably harvested
sugarcane in 2018, a break from the petroleum-based plastic generally used to make the

company's trademark building blocks. Among other steps, the company has recently committed
to eliminating all single-use plastic packaging from its products by 2025. Along with these
changes, the toymaker has committed to investing $164 million into its Sustainable Materials
Center, where researchers are experimenting with bio-based materials that can be
implemented into the production process. Through all of these initiatives, LEGO is well on its
way to tackling pressing environmental challenges and furthering its mission to help build a
more sustainable future.
2. Starbucks’s Commitment to Ethical Sourcing
Starbuck Coffee Company, founded in 1971 is the first retail store opened in Seattle’s Pike Place
Market in the United States. The company’s name was inspired by Moby Dick that it evoked the
romance of the high seas and the seafaring tradition of the early coffee traders (Starbucks
2010a). Starbucks published its first corporate social responsibility report in 2002, with the
objective of becoming renowned for its CSR activities as well as its goods. One way the brand
has achieved this aim is through ethical sourcing. In terms of CSR, Starbucks has good
governance, ethical conduct and social responsibility is core to their way of running business.
Starbucks has driven to create and increase shareholder value. Starbucks also focuses on
maintaining the relationship between stakeholders and their company. The definition of CSR in
terms of Starbucks Company is conducting the business in ways that produce social,
environment and economic benefit for the communities. In 2015, Starbucks confirmed that 99
percent of its coffee supply chain is ethically sourced and the company hopes to increase its
ratio to 100 percent through continuous efforts and relationships with local coffee growers and
groups. Starbucks was recognized one of the world's most ethical corporations in 2021 for its
efforts.
Starbucks focuses on protecting the environment and urges others to do the same in order to
make a great business for mankind. They have launched many projects to encourage the
environment. Examples include:
a) Recycling and Reducing Waste:
Starbucks’s goal for 2015 is to recycle all materials which need to be recycled in cafes and
control trash collection including usable cups by 25%. Approximately 70% of Starbucks stores in
the United States of America can recycle at least one kind of waste where there are commercial
recycling services around Starbucks stores. Moreover, Starbucks offers a 10% discount to
customers who bring in their own commuter mugs that they want to reduce the environmental
impact of the cups. By 2009 reusable cups had served over 4.4 million more customers than in
2008 (Fiscal 2009 CSR annual report).
b) Water

Water is a vital natural resource in the company’s operations because it uses the water to make
coffee and tea beverages. In 2009, Starbucks started this venture in 2009 by installing the
manually controlled hand-meter faucet in all stores in the U.S.A. Starbucks can save around 150
gallons of water per store per day. Additionally, Starbucks continues to utilize water-saving
equipment such as dishwashers that consume less than one gallon of water per cycle (Fiscal
2009 CSR annual report). Another example is that the company has trained its workers to
maintain coils in ice machines clean in order to prevent heat from machines which causes the
ice to melt. Starbucks was able to reduce water consumption by 4.1 percent between 2008 and
2009. Starbucks’ goal for 2015 was to reduce its water consumption in coffee shops by 25%
(Business green 2010).
ARGUMENT AGAINST CSR FOR A COMPANY
Consumers are wise to Green washing:
Even for larger businesses, the cost of CSR can be burdensome. Green washing refers to
corporate actions that appear to be environmentally friendly but do not truly reflect the
difference of how a business runs its operation. For example, a product may be labeled as "All
Natural", even though it has been manufactured in the same method it has always been. Some
dry cleaning firms use the term "Organic" which sounds similar to "organic food" but has no
precise meaning. Some customers may respond positively to such statements while others are
suspicious of corporate Green washing. Moreover, financial expert Milton Friedman typically
criticized CSR, claiming that it pulls the company’s emphasis of the profit-making goal. For any
type of monetary entity, profit-making is a miraculous priority. However, when companies get
involved in CSR tasks, they are required to reduce the earnings margin, which can make their
shareholders dissatisfied.
Above all, the Volkswagen reflects a complete failure in terms of CSR. According to the article in
the Forbes, the company attempted to save its “embarrassingly low market shares” by
launching “clean-diesel” market push in the United States to compete with environmental
friendly alternatives to hybrids such as the Toyota Prius and Honda. Their diesel vehicles were
equipped with defeat-device software that monitored when emissions tests were taking place
and increased pollution controls to ensure the cars passed. This case was successfully examined
and revealed that Volkswagen cars emit far more poisonous nitrogen oxide than allowed by law
Volkswagen’s misconduct cost the company, consumers, and the environment a lot of money.
Corporate Social Responsibility focuses on making safe products and reducing pollution which
Volkswagen failed to do. In addition, Volkswagen failed miserably in CSR while focusing on
profits rather than the welfare of society.