This document discusses corporate social responsibility (CSR) in developing countries from a critical perspective. It notes that while CSR is often touted as benefiting poverty alleviation and development goals, current CSR approaches have limitations. The document explores definitions of CSR, criticisms of CSR including that it is "bad capitalism" or "weak CSR is bad development." It argues a critical research agenda is needed to better understand CSR's potential and limitations for development.

1. Corporate Social
Responsibility
in the developing world
•MICHAEL BLOWFIELD
•JEDRZEJ GEORGE FRYNAS

2. Group Members
 Muhammad Umair
 Azhar Sarwar
 Alishba Saeed
 Maryam Shabir
 Aroosa Munir

3. Need a Critical Perspectives
 To understand what CSR does….
 And could mean for the poor and
marginalized in developing countries.

4. Need a Critical Perspectives
 However, the contributors to this
issue have reached the conclusion that
current CSR approaches do not
warrant such claims.
 Their work shows the need for a
critical approach to the strengths
and limitations of CSR

5. Numerous claims about CSR
 The contribution to make Poverty
alleviation
 Other development goals

6. Why Critical Agenda
 Many policy-makers see business as important in
meeting development challenges:
 Not just those of economic growth, but also in
areas such as combating HIV/AIDS, reducing
poverty and building human capital.

7. Why Critical Agenda (cont)
 Moreover, government, civil society and business all to some
extent see CSR as a bridge connecting the arenas of business and
development, and increasingly discuss CSR programmes in
terms of their contribution to development.
 Implicit in this view is that developing economies are different
from developed ones, and require particular attention.
 There are unique aspects to issues such as poverty and
sustainability in the developing world that demand different
solutions from those that might be implemented in developed
economies.

8. To understand the potential and limitation of CSR
Contribution.
 What is CSR.
 (we provide a short overview of how CSR is defined.)
Various criticisms made of CSR.
(and consider whether they are valid in a developing-country context)
 Explore several ways in which CSR affects international
development.
 What we know and need to know about how the ideas, norms
and values that underpin CSR theory and practice relate to
developmental goals.

9. What is CSR?
 ‘Corporate social responsibility’ is a recent term, a
preoccupation with business ethics and the social dimensions
of business activity has been around for a very long time.
 Business practices based on moral principles and ‘controlled
greed’ were advocated by pre-Christian western thinkers.
 Islam and the medieval Christian Church publicly condemned
certain business practices, notably usury.

10. What is CSR? (cont)
 Nineteenth-century boycotts of food stuffs produced
with slave labour.
 Nuremberg war crimes trials after the Second World
War.
 the moral vision of entrepreneurs such as Cadbury and
Mars.
 Directors of the German firm I. G. Farben found guilty
of mass murder and using slave labour.

11. What is CSR? (cont)
 From a historical perspective, then, CSR is simply
the latest manifestation of earlier debates on the
role of business in society.
 What is new, according to Fabig and Boele, is that
‘today’s debates are conducted at the intersection of
development, environment and human rights, and
are more global in outlook than earlier in this [the
twentieth] century or even in the 1960s.

12. What is CSR? (cont)
 Why the concept of CSR has risen to prominence in
recent history, or on the definition of what
companies should be responsible for and how.
1. As Michael Blowfield argues in this issue, there
are common elements to managing CSR, and
discernible these significantly influence how
companies view their responsibilities.

13. What is CSR? (cont)
2. Mean different things to practitioners
seeking to implement CSR inside
companies and to researchers trying to
establish CSR as a discipline.
3. It can also mean different things to
NGOs and to companies.

14. What is CSR? (cont)
 Although these differences are an inevitable and potentially
fruitful element of the innovation process.
 They can be frustrating.
 Not least to company managers who might prefer a bounded
concept similar to quality control or financial accounting.
 Instead, managers find themselves wrestling with issues as
diverse as animal rights, corporate governance,
environmental management, corporate philanthropy,
stakeholder management, labour rights and community
development.

15. What is CSR? (cont)
 New terms such as corporate
accountability, socially responsible
investment and sustainable
development, aimed variously at
replacing, redefining or
complementing the CSR concept.

16. What is CSR? (cont)
 Institutions and individuals can also
change their interpretations of CSR.
 World Business Council for
Sustainable Development (WBCSD)
has changed its definition over time.

17. (WBCSD) CSR definition.
 Initially (1998), it referred
to CSR as ‘the continuing
commitment by business to
 behave ethically
 and contribute to economic
development while
 improving the quality of
life of the workforce
 and their families as well as
of the local community and
society at large’.
 But that definition was
later changed (2002) to
‘the commitment of
business to contribute
 to sustainable economic
development,
 working with employees,
their families,
 the local community and
society at large to improve
their quality of life’.

18.  Aroosa

19. CSR as a Culture
 Culture affects capitalism.
 Notions of corporate responsibility are not unique
to the West,
 More rigid division between ‘social’ and ‘economic’
affairs and the stress on individualistic—rather
than communitarian— values.

20. CSR as a Culture
 Continental European, Asian or African
societies may not have the term CSR in their
vocabularies, yet some of these societies may
have had a longstanding social contract
whereby business has social obligations to
employees or wider society, such as exists in
Japan.
 Meaning of CSR can differ from one society to
another.

21. CSR as a Culture
 When asked by the WBCSD what CSR means to them, people from
different countries emphasized different issues:
 Environmental issues were stressed in Thailand,
 While Ghanaians stressed empowering local communities
 Ethical concerns of business managers differ among nations.
 Managers in multinational companies can find themselves juggling
the perhaps contrary expectations of their local and head offices.
 These differences render any common or comprehensive definition
of what constitutes corporate responsibility elusive, especially when
new initiatives seem to be continually emerging.

22.  Azhar

23. CSR as an alternative to government
 For many proponents and critics, a key distinguishing feature
of CSR is the voluntary nature of the initiatives companies
undertake in its name, in contrast to the formal regulatory
mechanisms historically used to govern business.
 Few hold that business should not be legally accountable, but
in certain circumstances a voluntary approach to regulating
business behavior might be beneficial.

24. CSR as an alternative to government (cont….)
 For instance, where there is a strong system of governance,
voluntary approaches might be a way of extending company
accountability without the need for new legislation.
 A complementary approach encouraging business to act
responsibly but not an alternative to the rule of law.
 Equally, where the rule of law is weak, voluntary approaches
can encourage multinational companies to introduce higher
levels of performance than those required for local legal
compliance.

25. CSR as an alternative to government (cont….)
 Many ‘voluntary’ initiatives also have a
‘mandatory’ aspect, and there are already
many intersections between CSR and the law.
 Including actual new legislation. (example of
logging companies)
 As well as legal aspects to some CSR
initiatives

26. CSR as an alternative to government (cont….)
 ‘Voluntary CSR’ can also be interpreted as part of a wider
revisiting of the role of government, and an increasing focus on
enabling legislation that encourages certain behaviours rather
than simply attempting to codify every detail of compliance.
 The broad idea of ‘voluntary’ mechanisms to regulate business
behaviour is winning support from policy-makers.
 Firms are capable of policing themselves in the absence of
binding international and national law to regulate corporate
behaviour.

27. CSR as an alternative to government (cont….)
 The European Commission’s Green
Paper of July 2001 defined CSR as ‘a
concept whereby companies integrate
social and environmental concerns in
their business operations and in their
interaction with their stakeholders on
a voluntary basis’.

28.  Alishba Saeed

29. CSR as an umbrella term
1. Companies have a responsibility for their impact on society
and the natural environment, sometimes beyond legal
compliance and the liability of individuals;
2. Companies have a responsibility for the behaviour of others
with whom they do business (e.g. within supply chains);
and
3. Business needs to manage its relationship with wider
society, whether for reasons of commercial viability or to
add value to society.

30. CSR as an umbrella term
 Some of the ambiguity about CSR arises because
the term has been used to refer both to a research
agenda and to corporate practice.
 In this special issue we are concerned with both,
but we primarily hope to advance a new research
agenda and a debate on the business–society
relationship.

31.  Maryam Shabira

32. CSR as an umbrella term
 We feel that the current research agenda on CSR lacks
systematic rigour and fails to tackle key questions.
 For example, in business schools much of the research on
CSR focuses on issues related to the stakeholder view of the
firm and the potential contribution of CSR to profitability.
 vital questions are not being asked. For example, while
dozens of studies have investigated the correlation between
firms’ social commitment and profitability, a key causal
question remains unanswered: does social commitment drive
a firm’s profitability, or does profitability allow the firm to
invest in social initiatives?

33. Criticisms of CSR
 In the context of international development and poverty
alleviation, CSR is recommended as beneficial to both the
North and the South, contributing simultaneously to
universal human rights, equity and economic growth.
 In addition to the many companies still resistant to CSR, and
the politicians and academics who see it as a barrier to trade,
civil society advocates are increasingly questioning its
benefits.

34. Criticisms of CSR
 Broadly speaking, most criticism falls
into two camps.
1. ‘CSR is bad capitalism’ school.
2. ‘Weak CSR is bad development

35. Criticisms of CSR
 CSR is bad capitalism’ school.
 Associated with traditional business management theory,
 Echoes Milton Friedman’s famous statement that there is
“only one social responsibility of business
to use its resources and
engage in activities
designed to increase
its profits”

36. Criticisms of CSR
 According to this view, CSR is inherently
misguided in principle.
 By pursuing social and environmental objectives,
firms may ultimately hurt shareholders by
generating lower profits
 Furthermore, firms are said to lack the expertise
to engage in solving social problems.

37. Criticisms of CSR
 Nonetheless, business scholars have tried to reconcile profit-
maximizing objectives with social objectives by suggesting
that CSR can lead to higher longterm profitability.
 Margolis and Walsh found that, between 1972 and 2002, at
least 127 published empirical studies examined
“the relationship between socially responsible behaviour on
the part of companies and their financial performance,
 the majority of them pointing to a positive relationship
between the two variables”

38. Criticisms of CSR
 Weak CSR is bad development’ school
 Associated with civil society organizations and
critics of business behaviour.
 Argues that companies should take responsibility
for the broader impacts of business activity.
 but that current CSR practice is simply
inadequate for this purpose.

39. Criticisms of CSR
 According to this view, the planning and implementation of
social programmes by firms is generally deficient,
 Many of these critics consider the provision of social justice
the domain of state regulation or argue that, at a minimum,
the state has an obligation to monitor corporate social
programmes.
 They point out that—in the absence of state involvement and
proper monitoring—CSR initiatives such as corporate codes
of conduct tend to lack precision and uniformity across firms
and industries, and that there are few, if any, sanctions for
non-compliance.

40. Criticisms of CSR
 Two other critical schools should be
acknowledged:
 One that disputes that capitalism can make any
contribution to social and environmental justice.
 CSR as nothing more than good capitalism and
therefore not worth thinking about in its own
right

41. Criticisms of CSR
 These questions can be broadly divided
into four areas:
1. the meaning of CSR for developing
countries,
2. its relationship to international
governance,
3. its analytical limitations, and
4. the consequences of thinking in terms of
the business case for CSR.