Critical Literature Review: CSR in Business Management

This report presents a critical literature review on the strategic use of Corporate Social Responsibility (CSR) in contemporary business management. It explores the evolution of CSR, from its early philanthropic roots to its current status as a vital business strategy. The review examines the rationale for CSR, emphasizing its role in building customer trust, loyalty, and enhancing a company's reputation. It delves into the stakeholder theory and social contract theory, highlighting how CSR aligns business practices with societal expectations. The report also addresses criticisms of CSR, including concerns about its potential as a tool for profit maximization and manipulative tactics. The literature review synthesizes various sources to offer insights into how businesses can leverage CSR to achieve sustainability, competitiveness, and improved financial performance. The research question addressed is: How do CSR models help contemporary businesses to earn profits and benefit from sustainability? The report is a valuable resource for business managers, strategists, and researchers seeking to understand and implement effective CSR strategies.

1
The Strategic Use of Corporate Social Responsibility in Contemporary Business
Management
Critical Literature Review
Name
Course
Date

2
Abstract
Inarguably, Corporate Social Responsibility (CSR) is one of the most trending issues in the
contemporary business environment. Classical and traditional businesses did not consider the
need to have models that require ensure social accountability in their business activities.
Classical business models required managers and leaders to employ models that will help
their businesses to attain profits by minimizing costs as well as ensure stable growths that
will facilitate the sustainability of their businesses in the long term. At the beginning of the
twentieth century, CSR would be synonymized to "giving back to the community"- a practice
that was uncommon in classical business models. Social accountability was considered to be
the practice of non-profit and humanitarian organizations. However, at present, the success
and sustainability of many for-profit organizations can be attributed to social accountability.
As evident from the many sources in this critical literature review, many businesses use the
CSR model as a powerful strategy to ensure a ceaseless loyal customer base. Literature
affirms that CSR is known for forming effective liaisons between business enterprises and
their respective societies. In the modern business environment, it is very difficult, if possible,
for firms to survive without engaging their neighboring societies as well as their stakeholders.
In modern business, profits and sustainability are seen as functions of CSR. For a company to
thrive and enjoy profits, "giving back to society" has proven to be a working strategy. This
critical literature review aims at rendering a considerable number of literature sources that
will serve as arguments for the use of CSR in the contemporary corporate environment. The
literature used in this review discusses theoretical and practical insights of the CSR concept
as seen in the world today. The background, history, and rationale for CSR are also succinctly
described in this literature review. Moreover, the literature reviews capture some of the
insights that critique the use of CSR in modern-day business practices. This literature review
acts as a rich source of information to researchers that may need to get a grip on what CSR

3
entails. The secondary sources used in this critical literature review are not only credible but
also recent, thus providing researchers with updated insights regarding the concept of CSR.
The literature review is also commendable to business managers that may wish to ensure
business growth, prosperity, and sustainability. Strategists, managers, advocates, and
policymakers may count on this literature review.

4
Introduction and Background
In the modern competitive business environment, many business managers, leaders
and strategists have greatly benefitted from the concept of corporate social responsibility
(CSR). Business organizations reap the benefits attributed to using CSR models and
strategies by ensuring that their practices and activities are in line with their respective social
environments. Essentially, CSR models and strategies require companies, organizations, and
institutions to embrace a self-regulating culture where social accountability is highly
venerated. Business managements using the CSR models ascertain that their companies are
accountable to themselves, their stakeholders, and the public. Such management strategists
recognize the impact of the external social environment on the internal business environment.
The concept of CSR is very fundamental in new and existing business firms because it
ensures that business practices are aligned as per their communities’ demands. The concept
eliminates unnecessary conflicts and antagonism between businesses and their respective
societies. Furthermore, good CSR practices ensure business sustainability because firms are
poised to exploit a loyal customer base.
This critical literature review aims at examining, assessing and analyzing the existing
literature surrounding the concept of CSR in our contemporary business environments. The
literature review borrows from a significant number of articles and books that delve into the
concept of CSR. Therefore, this literature review may serve as a credible source of
information to businesses that aim at exploiting CSR models. The literature review mainly
serves to illustrate how businesses can take advantage of ensuring social accountability
throughout their business activities. The main research question in this literature review is:
How do CSR models help contemporary businesses to earn profits and benefit from
sustainability? Links between business social accountability and customer trust and loyalty
are stressed throughout this literature review. This critical literature review optimizes a large

5
number of online literature sources that cite the concept of CSR. CSR-related articles from
Google Scholar proved to be very helpful in the development of this literature review. In the
process of identifying the appropriate online literature, keywords such as CSR, businesses,
and social accountability were typed and searched in the Google Scholar Search Engine. The
Google Scholar searching tool also enabled the exclusion of old and irrelevant literature
sources. Therefore, the online articles used in this literature review apply to firms in the
contemporary business environment.
History of CSR
Social accountability started from the voluntary benign initiative of businesses and
businessmen to practice philanthropy, then grew to a corporate agreement with corporate
standards, and now, it is called corporate social responsibility (Jean and Yazdanifard 2015,
1123). At the beginning of the twentieth century, for instance, large companies such as
Standard Oil and the Carnegie Steel were known for offering large sums of money to their
communities (Gordon, et al. 2016, 335). Rich entrepreneurs such as John D. Rockefeller and
Andrew Carnegie are known for their entrepreneurial philanthropy and altruism. Although
many people in history have bestowed the act of goodwill to the societies, the actions by
Rockefeller and Carnegie can be linked to their companies. The two men are the pioneers of
corporate social responsibility.
After many more complex corporate-community relations between businesses and
their societies, the corporate social responsibility concept came to fruition in the 1950s
(Wanvik 2016, 519). Scholars assert that in the 1950s, the concept of CSR was designed to
help big corporations in "cleaning up their act" to their respective neighboring societies.
Large corporations and companies aimed at constructing bonds with their societies with an
attempt to reduce the inefficiency that occurred when there were conflicts between the

6
businesses and their communities. As the number of large corporations and companies has
been increasing, CSR has been overtly displayed. Many large companies in all sectors have
been offering some proportions of their funds to build better working conditions with their
environment. Today, many large corporations and organizations have been involved in CSR
by facilitating the production of socially desirable goods and services (Becker-Olsen and
Guzmán 2017, 293). Companies practice CSR practices by employing the local communities,
educating and training people, provision of funds, initiating developmental projects and
supporting the communities from natural disasters and epidemics.
The rationale for CSR in Contemporary Businesses
The need to adopt CSR practices is not a voluntary or an autonomous choice but
rather, the consequences of an interplay between the external and internal drivers of a
company (Pistoni, Songini and Perrone 2016, 655). In the contemporary business
environments, CSR has become a mandatory strategy (Mitra and Schmidpeter 2017, 2). The
scholars attest that these transitioning from voluntary to mandatory CSR practices is a
positive measure of success to many businesses. These scholars aim at explaining how and
why the concept of CSR is relevant in the contemporary business world. The scholars posit
that CSR normally functions because both the business and the community advantage from
the concept. This source seems to differ with many classical models that would have taken
CSR as a voluntary expense choice by a company. In the modern business field, many
businesses have a bird-eye view and know that social accountability certainly leads to the
acquisition of unceasing yields. Contemporary business managers and leaders acknowledge
that CSR activities function to induce the public to gain trust and goodwill, which eventually
serves to leverage for corporate credit (Ham and Kim 2017, 354). The public and the relevant
stakeholders perceive CSR activities as ethical motives. This perception is very necessary for
developing good and working relations with the society, which serves as the ultimate

7
customer for any company (Kolk 2016, 24). Considering that the public judges the activities
of businesses through their societies' conventions, firms must align their practices within their
society's expectations.
Corporate social responsibility is linked to the increase in performance,
competitiveness, and sustainability of Spanish technological companies (Bernal‐Conesa, et al.
2017, 96). Corporate social responsibility serves to promote sustainability considering that
businesses align by the needs of its relevant stakeholders and also the public. CSR models
demand that companies must adhere to some social benefitting standards. Companies adhere
to these standards to ensure that they reach their stakeholders' expectations as well as
receiving reputational benefits. Research done for 285 companies listed in Fortunes reveal
that for five years, the most admired companies have had a tendency to fulfill stakeholder
expectations and improving their social performance to receive reputational benefits (Tetrault
Sirsly and Lvina 2019, 1234). This means that many large companies depend on their
societies' perception. Companies that successfully convince their communities through their
practices are likely to thrive in competitive conditions. Sustainability is also ensured by the
public who serve as a consistent customer base for businesses. Considering that CSR
activities strategically help business to portray positive images in the minds of the public,
companies practicing such activities are likely to benefit from high revenues and profits.
Moreover, companies practicing CSR usually employ the local people in the community, thus
helping companies to cut their human resource and operational costs.
According to the stakeholder theory of corporate social responsibility, the decisions
made by top management and leadership in business companies must ensure maximum
possible value to the stakeholder (Thijssens, Bollen, and Hassink 2015, 873). On the other
hand, companies thrive through reputation. In the contemporary world, well-reputed

8
companies usually thrive for many years. Moreover, the social contract theory posits that
every company must ensure that the world is a better place. Many companies rely on the
legitimacy and the social contract theory to retain congruence between their immediate
societies and their objectives (Frynas and Yamahaki 2016, 258). Corporate social
responsibility includes actions such as engaging the local communities in activities such as
recruitment and production. This ensures that companies engage with their communities
before making critical decisions. These social contracts are also supported by the social
exchange theory which hypotheses a smooth, effective and efficient interaction between
CSR-practicing firms and their communities (Slack, Corlett and Morris 2015, 540).
Companies that involve their communities also eliminate conflicts that may occur due to poor
communication between the business and the community. Considering that businesses aim at
maximizing their profits, their activities may suppress the welfare of society. A conflict may
arise between the two entities. In her book, Jeanette Brejning asserts that much corporate
social responsibility ensures that the welfare of the public is not overstepped by business
enterprises, and thus, eliminating impending conflicts (Brejning 2016, 112.). In a nutshell,
companies rely on CSR to ensure survival, growth, and sustainability. The aforementioned
theories serve to provide the relevant arguments for the use of corporate social
responsibilities by firms. CSR has proved to be a successful strategy both in principle and
practice. Company managers that are acquainted with the aforementioned theories are usually
characterized by propelling their companies into higher sustainable levels.
Criticism of CSR in Contemporary Businesses
A section of Marxist scholars criticizes the corporate social responsibility as a self-
defeating oxymoron” (Toft 2015, 303). The other set of critics of the CSR concepts is the
libertarian skeptics. According to these scholars, judging a company's legitimacy through its
social responsibility is a flawed approach. Moreover, the Marxists argue that CSR strategy is

9
not spearheaded by goodwill and ethics. The scholars suggest that just like the other
manipulative strategies of capitalism, the CSR strategy used by contemporary business is
meant to accumulate more profits and take advantage of the less advantaged members of the
community. In essence, companies that practice the CSR strategy operate on a "give and
take" basis. In some cases, companies use the CSR strategy to veil their manipulative tactics.
For instance, the finance industry usually practices CSR activities to reduce the degree of
their perceived immoral behavior (Norberg 2018, 401). Therefore, CSR acts as a scapegoat
for business enterprises. It is clear that firms that practice CSR trick their surrounding
communities to yield to the misconceived belief that their actions are meant to help them.
CPR strategies are criticized to be capitalistic tools that facilitates “to take more than they
give”.
CSR proponents assert that they sacrifice a proportion of their business’s profits for
the benefit of their neighboring communities (Sheehy 2015, 629). These "profits", however,
are the minimum of what they should be paying to the societies. According to egalitarian and
communist tenets, businesses should channel their larger proportions of profit to their
communities. On the other hand, the entire process of CSR can be criticized for contradicting
its basic activities of making profits. Businesses should aim at making profits, non-profit
organizations should function to serve the community. Thus, the CSR concept can be
criticized because it allows, sometimes demands that companies should give back to their
communities.
Research Gaps
There is insufficient literature covering the criticism of corporate social responsibility
in the mainstream business environment. Many scholars have unanimously and singularly
praised the concept, without noticing the concept's major flaws. Moreover, scholars have

10
failed to cover the evidence available where the concept of CSR has failed in practice. Lastly,
most of the authors of the articles used in this literature review offered a theoretical
examination of CSR. There is insufficient statistical and empirical data that argues for CSR in
contemporary business activities.
Conclusion
To conclude, many businesses' success in the contemporary corporate world can be
attributed to the practice of corporate social responsibility (CSR). Businesses that engage
their communities usually enjoy increased profits and positive growths that guarantee
sustainability. Moreover, as evident from the many authors, corporate social responsibility is
an effective tool to inspire the neighboring community towards painting a positive image.
Considering that businesses mainly depend on their reputation and the community members'
perceptions, CSR is a very effective strategy towards facilitating increased performance,
competitiveness and sustainability. The practice of CSR theories such as the social contract,
legitimacy, and stakeholder theories is effective in ensuring the survival, competitiveness,
and sustainability of companies. CSR has also been linked with solving conflicts that may
arise between businesses and their communities. However, CSR has been criticized to be a
manipulative "give and take" strategy. The advantages of CSR surpass its criticisms and
disadvantages. In future studies, scholars should put more focus on providing statistical and
empirical evidence concerning corporate social responsibility.

11
Bibliography
Becker-Olsen, Karen, and Francisco Guzmán. "Corporate social responsibility
communication in North America: the past, present and future." In Handbook of Integrated
CSR Communication, pp. 293-315. Springer, Cham, 2017.
Bernal‐Conesa, Juan Andres, Carmen de Nieves Nieto, and Antonio Juan Briones‐Peñalver.
"CSR strategy in technology companies: Its influence on performance, competitiveness and
sustainability." Corporate social responsibility and environmental management 24, no. 2
(2017): 96-107.
Brejning, Jeanette. Corporate social responsibility and the welfare state: the historical and
contemporary role of CSR in the mixed economy of welfare. Routledge, 2016.
Frynas, Jędrzej George, and Camila Yamahaki. "Corporate social responsibility: Review and
roadmap of theoretical perspectives." Business Ethics: A European Review 25, no. 3 (2016):
258-285.
Gordon, Jillian, Charles Harvey, Eleanor Shaw, and Mairi Maclean. "Entrepreneurial
philanthropy." The Routledge companion to philanthropy (2016): 334-347.
Ham, Chang-Dae, and Jeesun Kim. "The role of CSR in crises: Integration of situational
crisis communication theory and the persuasion knowledge model." Journal of Business
Ethics 158, no. 2 (2019): 353-372.
Jean, W.A. and Yazdanifard, R., 2015. The review of shared value in contemporary CSR run
by two successful companies to sustain the business in recent years. International Journal of
Management, Accounting and Economics, 9, pp.1122-1129.

12
Kolk, Ans. "The social responsibility of international business: From ethics and the
environment to CSR and sustainable development." Journal of World Business 51, no. 1
(2016): 23-34.
Mitra, Nayan, and René Schmidpeter. "The why, what and how of the CSR mandate: The
India story." In Corporate Social Responsibility in India, pp. 1-8. Springer, Cham, 2017.
Norberg, Peter. "Bankers bashing back: Amoral CSR justifications." Journal of Business
Ethics 147, no. 2 (2018): 401-408.
Pistoni, Anna, Lucrezia Songini, and Oriana Perrone. "The how and why of a firm’s approach
to CSR and sustainability: a case study of a large European company." Journal of
Management & Governance 20, no. 3 (2016): 655-685.
Sheehy, Benedict. "Defining CSR: Problems and solutions." Journal of business ethics 131,
no. 3 (2015): 625-648.
Slack, R. E., Sandra Corlett, and Rachael Morris. "Exploring employee engagement with
(corporate) social responsibility: A social exchange perspective on organisational
participation." Journal of Business Ethics 127, no. 3 (2015): 537-548.
Tetrault Sirsly, Carol-Ann, and Elena Lvina. "From doing good to looking even better: The
dynamics of CSR and reputation." Business & Society 58, no. 6 (2019): 1234-1266.
Thijssens, Thomas, Laury Bollen, and Harold Hassink. "Secondary stakeholder influence on
CSR disclosure: An application of stakeholder salience theory." Journal of Business
Ethics 132, no. 4 (2015): 873-891.
Toft, Kristian Høyer. "Liberal CSR and new Marxist criticism." In Corporate social
responsibility and governance, pp. 303-316. Springer, Cham, 2015.

13
Wanvik, Tarje I. "Governance transformed into corporate social responsibility (CSR): New
governance innovations in the Canadian oil sands." The Extractive Industries and Society 3,
no. 2 (2016): 517-526.