ORGANIZATION AND CSR .pdf



Nom original: ORGANIZATION AND CSR.pdf
Titre: The Effects in the Structure of an Organization through the Implementation of Policies from Corporate Social Responsibility (CSR)
Auteur: Dimosthenis T. Mousiolis

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Procedia - Social and Behavioral Sciences 148 (2014) 634 – 638

ICSIM

The Effects in the Structure of an Organization through the
Implementation of Policies from Corporate Social Responsibility
(CSR)
Dimosthenis T. Mousiolis, Apostolos D. Zaridis
University of the Aegean, Chios, Greece

Abstract
The purpose of this paper is about how the policies, which have been adopted by CSR’s factors, affect the structure of an
organization, the dedication of the personnel, the sensitivities of the organizations upon social matters, the critical decisions of
the management, how they can be a significant advantage for the market and how affect’s the competition after the
implementation of CSR’s strategies, how affect’s the sales, the profitability and the liquidity, the impact on the strategic planning
and how the stakeholder engagement affect this planning, public relations and communications. We have to find from which
point the CSR strategies, which have been adopted from an organization, is not just a Public Relationship matter, but infiltrates in
the basic construction and initiates changes that affect the culture and the functionality of the organization.
©
Authors.
Published
by Elsevier
Ltd. under the CC BY-NC-ND license
© 2014
2014 The
Elsevier
Ltd. This
is an open
access article
Selection
and peer-review under responsibility of the 2nd International Conference on Strategic Innovative Marketing.
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and peer-review under responsibility of the 2nd International Conference on Strategic Innovative Marketing.
Keywords: CSR’s factors, strategies, sales.

Comentary
Corporate social responsibility (CSR) is a business approach that views respect for ethics, people, communities
and the environment, as an integral strategy that improves the competitive position of a firm. Over the past decade, a
growing number of companies have recognized the business benefits of CSR policies and practices. Companies also
have been encouraged to adopt or expand CSR efforts due to the pressures from customers, suppliers, employees,
communities, investors, activist organizations and other stakeholders. CSR can be understood in terms of corporate
responsibility, but additionally focuses on the obligations a company has to the community and the environmental
stewardship. There has been a plethora of information readily available on the topic of CSR (Kenneth et al., 1985;
Jean et al., 1988; Blackburn et al., 1994; Business Week, 1999; Kumar et al., 2001; Nelling and Webb, 2006). A
large body of literature has also emerged on why the corporations should or should not engage in socially
responsible behavior. Proponents of CSR claims that CSR leads to improved financial performance, enhanced brand

1877-0428 © 2014 Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and peer-review under responsibility of the 2nd International Conference on Strategic Innovative Marketing.
doi:10.1016/j.sbspro.2014.07.091

Dimosthenis T. Mousiolis and Apostolos D. Zaridis / Procedia - Social and Behavioral Sciences 148 (2014) 634 – 638

635

image and reputation, increased sales and customer loyalty, increased productivity and quality, among other
benefits. The opponents of CSR argue that it takes away precious times of firm’s CEO and other top executives. So
the main question that is under discussion in this paper is the change that has been done inside an organization from
the implementation of CSR’s policies.
Many of us who have engaged with practitioner debates about corporate social responsibility (CSR) reporting
over the past few years will have frequently heard that a prime motive for corporations to report on issues of social
responsibility is a desire to minimize risks to their reputations. A corporation’s reputation among its economically
powerful stakeholders is a valuable asset which needs to be protected and developed, and a key aspect of this
reputation is stakeholders’ perceptions of the corporation’s CSR – or, more precisely, perceptions of how well the
corporation’s CSR policies, practices and outcomes meet stakeholders’ social and environmental values and
expectations. Within this context, CSR reporting is a potentially powerful medium which corporations can use to try
to influence these perceptions, thereby contributing towards maximizing the earning potential of their reputation.
CSR reporting plays this role either when opportunities to develop a CSR reputation in a new area arise through a
change in stakeholders’ social or environmental values (witness, for example, the number of corporations currently
seeking to build positive reputations in relation to their carbon footprints), or when negative incidents occur that
expose CSR shortcomings of particular corporations or industries. (Unerman, J. 2006)
The review of organizational CSR should happen at three levels: management systems development, people skills
development and learning and change in organizations. In other words, organizations need to review their
management systems that should embrace the extended scope, principles and content of CSR policies.
Socially responsible actions can lead to improved brand image and firm reputation among key stakeholders
(Brown and Dacin, 1997; Maignan and Ferrell, 2004), and from a resource-based view a positive reputation among
suppliers can be a source of competitive advantage (Barney, 1991; Porter, 1980) and might be posited to lead to
enhanced performance by suppliers. Further, supplier development, which can be defined as activities that include
plant visits, supplier audits, and supplier training (Krause et al., 1998, p. 40), is often an indirect part of the
Purchasing Social Responsibility (PSR) activities of firms. For example, buying organizations might work with
minority suppliers to improve their quality and overall competitiveness (Krause et al., 1999); may interface with
suppliers in general to make changes to production processes, packaging, and product design in terms of
environmental initiatives (Carter and Carter, 1998); and might visit and qualify supplier plants in terms of human
rights issues (Emmelhainz and Adams, 1999). Existing research has shown that supplier development efforts can
result in improved supplier capability performance along the lines of improved quality processes and manufacturing
process capabilities (Easton, 2000).
But, many writers have observed these actions also involve costs. The conclusion they draw is that appealing to
abstract principles is counter- productive. A “change in the existing system (of social arrangements) which will lead
to an improvement in some decisions may well lead to a worsening of others. Furthermore, we have to take into
account the costs involved in operating the various social arrangements (whether it is the working of a market or of a
government department) as well as the costs involved in moving to a new system. In devising and choosing between
social arrangements we should have regard for the total effect. This, above all, is the change in approach which I am
advocating” (Coase, 1960, p. 44).
Some usually say this is not CSR policy but just public relations, etc. To its critics CSR is all about cover up and
spin. Many companies used CSR as a kind of corporate PR rather than as genuine attempt to change the way they
interact with society (WARC, 2003). When CSR is driven only by risk management it is not only fake and
unsustainable, but also doomed to failure on its own term (Kitchin, 2003). Instead of addressing real issues, CSR
merely stages an elaborate pantomime to conceal or distract public attention away from the corporate illness. CSR
never tells the audience what happened behind the scene, i.e. what is really going on inside the company. The
greatest CSR show in recent years was put on by Enron: before its demise Enron had been on the list of the 100 Best
Companies to Work for in America and received six environmental awards in 2000. It issued a triple bottom line
report. It had great policies on climate change, human rights, and (yes indeed) anti-corruption. Its CEO gave
speeches at ethics conferences and put together a statement of values emphasizing “communication, respect, and
integrity”. The company’s stock was in many social investing mutual funds when it went down (Kelly, 2002).
However, CSR means serving social and political interests without direct remuneration but which is consistent with

636

Dimosthenis T. Mousiolis and Apostolos D. Zaridis / Procedia - Social and Behavioral Sciences 148 (2014) 634 – 638

and indirectly serves long-term investor value, it is not philanthropy. Some will argue that the firm is not really
being responsible or generous but only serving its own long-term interest.
The prominent scholar of a brand, David Aaker, is telling the “story” of the brand. Kodak, Saturn, Nike – each
are described in terms of their particulars, their stories (Aaker, 1996). The “case” for each brand and its power is
described, but not in terms of a specific theory that defines the brand as an entity. Neither are specific brand
management tasks and processes described. Reasoning about brand management is largely shaped by paradigmatic
examples. Branding is not rooted in theory, in the strict sense. Instead, paradigmatic examples or strong brand cases
illustrate what “happens” to a brand and how it is formed. For example, Coke tried to change its formula – that case
and its aftermath singularly influenced how managers think about brands. Since brand strength is a matter of
consumer perception, the branding literature has been built in a manner that may be more akin to mythology than to
science.
Also Ernst and Young (2002) suggest five key drivers have influenced the increasing business focus on CSR:






Greater stakeholder awareness of corporate ethical, social and environmental behaviour.
Direct stakeholder pressures.
Investor pressure.
Peer pressure.
And an increased sense of social responsibility.

The Commission of the European Communities (2002) argues that CSR has gained increasing recognition
amongst companies as an important element in new and emerging forms of governance because it helps them to
respond to fundamental changes in the overall business environment. These changes include: globalization and the
responsibilities that companies find the need to address as they increasingly source products and services from
developing countries, issues of image and reputation, which have become increasingly important elements in
corporate success and the need for companies to recruit and retain highly skilled personnel.
Also the Australian experience over the last few years provides compelling reason to believe that where
management dominates the board and controls the company with little or no constraint, or effective accountability,
there is substantial increased risk that the interests of shareholders will be dis-regarded and that serious damage may
be done to creditors and other stakeholders. This experience corresponds to that in Britain and the USA and has
played a major part in recent changes in thinking about corporate governance (Bosch, 1995, p. 16).
As Polonsky & Jevons (2006) indicate that CSR linked brand positioning needs to carefully consider the
implications of changes to products and certainly is not a short-term tactical activity. CSR positioning will usually
require a significant strategic shift in the way the organization thinks about itself and its activities, including
communications with internal and external stakeholders. While presently CSR is presently a “voluntary action,”
increasingly it is becoming expected by a wider range of stakeholders. It may be the case that firms choose to
undertake responsible actions without seeking to leverage these actions. Any leveraging of CSR should ensure that
the firm has genuinely integrated CSR into its corporate culture and actions. To do this the firm needs to understand
its behaviour in the context of issue complexity and be able to substantiate its actions as well as leveraging them.
This allows proactive external leveraging with the confidence that actions support the brand positioning.
When companies starting adopting CSR policies in fact they are accepting to change accounting systems so that
companies are audited not just according to their financial performance, but also according to a wide range of
environmental and social indicators. When we use the term ``bottom line'' in relation to the performance of
companies, we are referring to financial profit. But imagine that every company was audited according to three
bottom lines: financial, environmental and social, so that the auditing system took account of the full impact of a
company on society, including its impact on human rights (Frankental P. 2001). A well-known environmental
consultant, John Elkington (1997), has written a book on the subject of the triple bottom line. Methodologies are
now being developed to measure the environmental and social performance of companies. The auditing industry
would welcome an accounting system based on three bottom lines a multi-billion pound industry in the making. So
as result the companies starts, not immediately, to accept the effects from the CSR’s policies which they are
necessary to adapt to their own structure, in order to comply with this specific policies.

Dimosthenis T. Mousiolis and Apostolos D. Zaridis / Procedia - Social and Behavioral Sciences 148 (2014) 634 – 638

637

At 1984 Freeman (1984, p. 25) gives a definition to the meaning of the ”stakeholder” as “Any group or individual
who can affect or is affected by the achievement of the firm’s objectives”. According to Freeman the primary
stakeholders are those who have a legitimate interest in the company, i.e. investors, employees and customers.
Competitors, distributors, local society, interest groups, media and society are secondary stakeholders. Stakeholder
management is a concept, which can be used to understand and manage internal and external changes (Freeman,
1984, p. 52). Freeman distinguishes three different perspectives or levels: the rational level, the procedural level and
the transactional level. He gives several examples to illustrate how the lack of coherence between the goals, strategy
and processes and the lack of consistency in the messages sent out by the organization internally and externally,
creates problems in the interaction and communication with the stakeholders. Freeman stresses that stakeholder
management is a voluntary concept. However, according to Freeman organizations with an expressed stakeholder
management capability develop and implement communication processes with many different stakeholder groups,
negotiate with stakeholders about critical issues and aim to sign voluntary agreements with them. The stakeholder
model can be used to describe the company, but it can also be used as a means to obtain economic results, stability
and growth. Finally, the model can be used normatively – morally or ethically – as it shows how companies should
treat stakeholders (Donaldson and Preston, 1995).
But companies change their attitudes as they see it as in their interests to engage with the issue, or else are driven
by overarching values that are at least not inconsistent with their underlying financial imperatives. Typically,
businesses move through a period of compliance, then see the need and gain from integrating issues into core
management processes. Over time, they find themselves facing deeper strategic challenges, caricatured by oil
companies seeing their future in energy, car companies in mobility and pharmaceutical companies in delivering
health rather than drugs. At the highest stages, particularly the fifth – ‘‘civil learning’’ – companies find themselves
actively engaged in lobbying for public policies that are supportive of their increasingly ‘‘responsible’’ practices
(Zadek, 2001).
Further, Freeman (1984) observed that managers’ priority perceptions may attach to stakeholder groups as well
as to specific stakeholder claims. And, in addition to arguing that stakeholder attributes function as variables, not as
steady states, and can change for any particular group or stakeholder- manager relationship, Mitchell, Agle, and
Wood (1997). So these policies affect the basic construction of the organization where the managers acting.
So the policies coming from CSR theories effect the structure of an organization, I think the answer is positive.
Of course not in same level for everyone but depends from the inside and the outside environment. Also the time
where the effects will appear it’s also depends on the organization environment. But when a company starts to adopt
CSR policies the main reason is to protect their interest and their image in relation to the stakeholders.
References
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