Is the concept of Corporate Social

Responsibility (CSR) a trend or a fad?

ENTR315: Group 3 Learning Pack

04/03/2015

Table of Contents
Seminar Plan ............................................................................ 2
An Introduction to the Question.............................................. 3
CSR: A History........................................................................... 4
CSR: A Definition ...................................................................... 8
Theory and Future of CSR ........................................................ 9
Carrolls Pyramid of CSR....................................................... 9
Stakeholder Typology ........................................................ 10
CSR: A trend? ......................................................................... 14
CSR: A fad? ............................................................................. 18
CSR: A Critique ....................................................................... 20
The Future of CSR................................................................... 21
Views on CSR .......................................................................... 23
Activity: Word Puzzle Game................................................... 25
Activity Key facts.................................................................. 26
Extra Statistics and Information: BP ...................................... 28
Learning Outcomes ................................................................ 29
References ............................................................................. 30

Seminar Plan
Ice Breaker Activity
Introduction into Question
Learning Outcomes
History of CSR
Definition of CSR
Definition of trend and fad

Social context theory

Stewardship/Deontology
Ethical models - Carroll pyramid of CSR and Pestle
Activity - Place CSR on Carrolls pyramid
Stakeholder typology, Mitchell et al
General overview as CSR as a trend or fad

Break
Activity - 4 stakeholder groups BP (20 minutes)

Is CSR a trend or fad? Your opinion

Why CSR is a trend and not a fad
Future of CSR
Critique of CSR

Learning outcomes review

Own opinion is CSR a trend or fad?

An Introduction to the Question

This learning pack has been created with the aim of

accompanying the seminar presentation with extra
information that may be useful for you for in deciding
whether CSR is a trend or a fad. During the seminar,
alongside our presentation, there will be a range of
interactive activities including a case study looking at the
2010 BP Horizon oil spill from stakeholders perspectives.

CSR: A History
Pre 1945

CSR has been around for a long time with some of the
earliest corporations pre 19th Century being chartered
with public goals and public interest objectives, as well
having private economic objectives in mind.

1945

However from the year 1945 there were large changes

around the global business environment, due to the
rapidly changing political and global economy.

Since 1945 (triggered by the end of WW2) the barriers

between communism and capitalist economies were
broken down. Social attitudes towards private and public
institutions also began to change.
1950s

During the 1950s, the primary focus was on businesses'

responsibilities to society, but there was scant discussion
of linking CSR with business benefits.

The concept of CSR has had a long and diverse history in

the literature. Although references to CSR occurred a
number of times prior to the 1950s, that decade ushered
in what might be called the modern era with respect to
CSR definitions. Howard Bowens (1953) book Social
Responsibilities of the Businessman, stands out during
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this period. It was proposed that Bowen deserves the

appellation of the Father of Corporate Social
Responsibility.
1960s

In the 1960s key events, people and ideas were

instrumental in characterizing the social changes ushered
in during this decade.

In each of these arenas, businesses perceived that the

expectations being communicated by stakeholders would
eventually have to be addressed by firms, and CSR
research had an explicit ethical obligation. There was also
a small discussion about the relationship between CSR
and corporate financial performance.
1970s

In the 1970s business managers applied traditional

management functions to deal with CSR issues, most of
them with the enlightened self-interest model.

Definitions of CSR began to proliferate in the 1970s. The

definitions of CSR became more specific; also during this
time, alternative emphases, such as corporate social
responsiveness and CSP, became commonplace.
1980s

In the 1980s, business and social interests came closer

and firms became more responsive to their stakeholders.
In addition, researchers on the issue focused on
developing new definitions of CSR developing alternative
or complementary concepts and topics.
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 The European Union in particular has influenced

expectations (and behaviour) in the realm of corporate
responsibility or corporate social responsibility. The fall of
the Berlin Wall (1989) led the Western alliance to a new
appreciation of internal differences that had been
suppressed in a culture preoccupied with the Soviet
threat.
1990s

However despite the large scale changes since 1945 it is

more recently in the years from the 1990s onwards that
some of the biggest leaps in CSR have been realised.

During the 1990s the idea of CSR became almost

universally approved, also CSR was coupled with strategy
literature.

Most of this is due to the increasing importance and

creation of; TNCs (Transnational corporations), NGOs
(National government organisations) and CSOs (Civil
society organisations), national governments and
international bodies like the United Nations and the
World Fairtrade Association.

In addition to this globalised nature of business and the

use of improved media outlets by consumers have made
consumers more aware of issues such as Child labour
exploitation, global health problems and environmental
issues such as deforestation and including issues like the
BP oil spill attached in our case study for this

presentation.

2000s

CSR became definitively an important strategic issue.

In the 2000s CSR definitively became an important
strategic issue to many companies, since institutional
changes made social and environmental sustainability
an important source of institutional legitimacy of
firms, to the point where firms have some social
responsibilities incorporated as well as legal
responsibilities.

Use of social media and visibility of worldwide events

makes CSR as important today as ever.

1945
Social
consciousness
has increased

1990s
CSR almost
universally
approved

2000s
CSR
becomes
important
strategic
issue

CSR: A Definition
Corporate Social Responsibility known as CSR in short refers
to companies taking responsibility for their impact on society.
CSR is increasingly important to the competitiveness of
enterprises. It can bring benefits in terms of risk
management, cost savings, access to capital, customer
relationships, human resource management, and innovation
capacity.
CSR means that companys business model should be socially
responsible and environmentally sustainable. Corporate
social responsibility is an important part of corporate strategy
in sectors where inconsistencies arise between corporate
profits and social goals. A CSR Program can make executives
aware of these conflicts and commit them to taking the social
interest seriously. It can also be essential to maintain or
improve staff morale. As well as improving the stock markets
assessment of a companys risk to negotiations with
regulators.
The payoff to anticipating sources of conflict can be very
highit can be a matter of survival, as societies penalize
companies perceived to be in conflict with underlying values.
Asbestos and tobacco was a social problem industry in the
past. Perhaps this industry today is the energy industry in
which we will later look at as a case study of the BP 2010
Horizon oil spill.

Theory and Future of CSR

Carrolls Pyramid of CSR
Dr Archie B. Carroll identified four areas that make up the
Corporate Social Responsibility pyramid:
- Legal
- Economic
- Ethical
- Philanthropic

Stakeholder Typology
Managers need to take a view on
1. Which stakeholders have the greatest influence,
therefore
2. Which expectations they need to pay most
attention to and
3. To what extent the expectations and influence of
different stakeholders vary.
Johnson, Scholes & Whittington (2008) 8th Edition
Exploring
Corporate Strategy Prentice Hall

For a business to be considered Ethical they must recognise

the impact their decisions have on stakeholders. A
stakeholder is any group or individual who can affect or is
affected by the achievement of the organization's objectives"
(1984: 46, cited in Mitchell et al 1997 p 854). Although this is
a broad definition, Mitchell et al (1997) used it as a starting
point for their quest in evaluating stakeholders.
Mitchells stakeholder typology proposed three different
classes of stakeholders, by their definition of three attributes1. Power the ability to impose their will on others
and influence other

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2. Legitimacy When different social systems

support the stakeholder
3. Urgency Attributed when the stakeholder
believes their relationship with the company is of
high importance

The model proposes that stakeholder salience the degree to

which managers give priority to competing stakeholder
claims (Mitchell et al, 1997), is in line with their position of
the three attributes Power, legitimacy and urgency.
Depending on how many of the factors are present, the
stakeholder is classed into one of seven typologies. This can
determine the best way to manage the stakeholders. Some
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factors are unstable and not static, this means that the
stakeholders can change, and the influence they have on the
organisation will subsequently change.

Stage
1.

Title
Dormant

2.

Discretionary

3.

Demanding

4.

Dominant

5.

Dependant

Description of stakeholder
Possess the power to impose their
will on the firm, however do not
have a legitimate relationship or
urgent claim to exert it. Dormant
stakeholders need to be monitored
as they can become impactful.
Possess legitimacy within the
organisation, but they dont have
the power to influence or an urgent
claim to exert it. There is no
requirement to have a dynamic
relationship with these
stakeholders.
Have urgent claims but no power or
legitimacy. These stakeholders are
no dangerous.
A dominant stakeholder is powerful
and legitimate, and therefore has
the capacity to influence the firm.
Usually, they are part of the
organisations board of directors.
Dependant stakeholders refrain
from having power, but have both
an urgent and a legitimate claim.
They rely on more powerful
stakeholders.
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6.

Dangerous

7.

Definitive

Dangerous stakeholders have

urgency and power which makes
them dangerous to an organisation.
However, they do have a lack of
legitimacy.
Definitive stakeholders exert
power, legitimacy and urgency.
Usually, dominant, determinant or
dangerous stakeholders move into
this section when they have an
important command. This
temporarily gives them their
missing attribute.

Organisations have to:

Include and address issues of demanding and

dangerous stakeholders,
Try to win support of dominant, dependent and
definitive stakeholders,
Co-operate with dominant and definitive
stakeholders,
Encourage discretionary and dependent stakeholders
to participate,
Bring dormant stakeholders on board,
Mitigate impact of demanding and dangerous
stakeholders.
(Crane & Matten, 2010, p202-203)

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CSR: A trend?
Source: Reputation Institute (2014)

John Lewis has the

highest score, providing a
good workplace
environment alongside
high quality products and
services.

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Most responders believed that Sainsburys did well in

providing high-quality products. Rolls-Royce has the third
highest overall score, doing particularly well because of high
quality products and services.

15

The table above highlights the best performing companies in

the UK in terms of their corporate reputation, which is of
course affected by their actions regarding CSR. As CSR has
emerged, companies now have another issue to consider
when operating their business. Most companies are willing to
create social value alongside corporate value.
Aiming for lucrative profits is no longer the only aim of
corporate business as we can see a number of huge
companies on the above table making a conscious effort to
create social value and enhance their reputation. Instead,
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addressing social, environmental and economic problems has

started to become a global trend. As Sahlin-Andersson (2006)
stated in order to gain trust, admiration, esteem, and good
feeling, it is necessary for businesses to not only deliver on
products and services, but also on expectations on wider
corporate responsibility.
This can be used to demonstrate that CSR is not just a fad,
but that it is clearly becoming a trend. Huge companies such
as John Lewis, Sainsburys and Rolls-Royce are working hard
to ensure they are seen as ethically responsible and more
than just a financially successful business.

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CSR: A fad?

Based on the figures shown above, Unilever and Nestl are

specifically held responsible for failing to declare zero
tolerance against land grabs, although lots of acres of land
have been unjustly seized from poor growers over the last
decade.
The company at the bottom of the list is Associated British
Foods (ABF). They have received a score of only 19%, largely
because of insufficient transparency. Their subsidiary brands
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were not able to prove their relationship with suppliers or

show their implementation of ethical standards and were
unable to illustrate clearly their policies on land rights and
land tenure security within their supply chain, in spite of their
reputation for producing sugar.
All the companies in the table have the influence to create a
more just and ethical food system but have so far neglected
to use this power. As a matter of fact, in some areas, these
companies threaten food security and economic
opportunities for the poorest people in the world. In other
words, they make hungry people even hungrier.
White (2005) proclaims that a series of multinational
company downsizing and consolidation is underway, affecting
thousands of suppliers and workers worldwide. CSR, once
viewed as irrevocably destined to become integral to
corporate strategy, management and governance, has proven
to be fragile and transient. Large corporations are now
shifting their focus to basic economic survival and beating
their competition as a result of globalization. Hence, CSR
enters into dormancy with an uncertain future, characterized
by practices related to its earlier phase, namely compliance
and philanthropy. This is the fad-and-fade scenario.

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CSR: A Critique
Some would argue that CSR, despite its apparent influence
either as a trend or a fad is no more than a glorified PR
exercise. The concept Corporate Social Responsibility is
supposed to be a win-win, with both consumers and
companies benefiting but in some cases it could be argued
that CSR is now just a necessary tool for a company to
achieve their main aim of lucrative profits.
Another main problem, as stated by van Oosterhout et al. is
that it is not clear what CSR is, that we do not understand its
causes and consequences, and that the notion is not very
helpful in understanding and making explicit what is desirable
or required at the business-society interface(van Oosterhout
et al, 2006).
As with most things in business, sceptics argue that if CSR was
not positively benefiting the company then they would not
concern themselves with it, so it is simply just something that
is expected of businesses by society in order to make sure
they maintain their reputation and appear attractive to
consumers.

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The Future of CSR

Over ten years of research at MORI (second largest market
research organisation in the United Kingdom) has illustrated
the increasing prominence of corporate responsibility for a
wide range of stakeholders, from consumers and employees
to legislators and investors. Traditionally, the factors that
mattered most to consumers when forming an opinion of a
company were product quality, value for money and financial
performance. Now, across a worldwide sample of the public,
the most commonly mentioned factors relate to corporate
responsibility (e.g. treatment of employees, community
involvement, ethical and environmental issues, etc).
Furthermore, the proportion of the British public saying
corporate responsibility is very important in their purchasing
decisions has doubled in the last five years.

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Faith in the benefits of profit has dropped dramatically from

1976 to 1999 as shown in the graph. In addition to the
increasing speed and accessibility of the media in which
corporate ethics and behaviour are discussed, recent years
have seen dramatic changes in the attitudes and expectations
brought to bear on companies. One example is the declining
faith in the benefits of profits among the British public. In
1976, the public agreed by two to one that the profits of large
companies help make things better for all consumers. By
1999 the balance of opinion was the exact opposite, with two
to one disagreeing that company profits benefit everyone.

Summary
CSR would appear to be increasing prominence as it would
now seem that the public views it as more crucially than ever
before. A companys CSR is one of the main ways in which the
public form an impression of that business. Customers are
increasingly concerned about the companys responsibility
towards the environment and communities when making a
decision about purchasing products. On the other hand, the
public is expecting companies to conduct themselves in a
socially responsible manner as it is becoming commonplace
for companies to not only conform to legal requirements, but
also to take their social influence into account. For example,
environmental consciousness and benefits to employees.

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Views on CSR

Broadly speaking, business are not perceived to be doing

enough. Expectations of companies are high and unrealised,
and these findings suggest that the media and their mass
audience are not predisposed to be tolerant of companies
who are allegedly failing their obligations. And in the postEnron business world, no company needs to be reminded of
the vulnerability of corporate reputation (and indeed of the
corporation itself) when it is exposed to evidence of
irresponsible business practices.

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Businesses cannot be accountable solely to shareholders or

customers. It is irresponsible and unreliable to evade wide
roles in society. Dawkins and Lewis (2003) suggest that
business must communicate their values and demonstrate
that they live up to societies in their business practices. The
next challenge for these leading companies may well be to
define the limits of their newly recognised corporate
responsibilities and find a balance between the contributions
of governments, companies and non-governmental
organisations to the society of the future.

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Activity: Word Puzzle Game

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Activity
Key facts
1. April 20, 2010 - An explosion occurs aboard BP
contracted Transocean Ltd Deepwater Horizon oil rig
stationed in the Gulf of Mexico. Of the 126 workers
aboard oil rig, 11 are killed.
2. April 28, 2010 - The U.S. Coast Guard reports that the
underwater well is leaking an estimated 210,000 gallons
of oil a day.
3. June 16, 2010 - BP agrees to create a $20 billion fund to
help victims affected by the oil spill.
4. October 25, 2010 - Over 8,000 animals (birds, turtles,
mammals) were reported dead just 6 months after the
spill, including many that were already on the
endangered species list.
5. November 28, 2012 - The U.S. government issues a
temporary ban barring BP from bidding on new federal
contracts. The ban is lifted on March 13, 2014.

6. As of 2012 - BP is responsible for close to $40 billion in

fines, clean-up costs, and settlements as a result of the oil
spill in 2010, with an additional $16 billion due to the
Clean Water Act.
7. December 18, 2013 - Kurt Mix, a former engineer for
BP, is convicted of destroying evidence for deleting text
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messages about the oil spill. The count of obstruction of

justice carries a maximum sentence of 20 years in prison
and a $250,000 fine.

8. January 20-February 2, 2015 - The final phase of the

trial to determine BP's fines takes place. The ruling is
expected in a few months.

For more information about BP case study, please go to

our website:
http://csrtrendorfad.weebly.com/

Looking at the 2010 BP Horizon Oil Spill

Case Study, attempt to put across the
viewpoint from ONE of the Stakeholder
Perspectives.
Discuss and Debate your viewpoint
with other stakeholders.

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Extra Statistics and Information: BP

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Learning Outcomes
To have a more in depth understanding of Corporate
Social Responsibility
To have an idea of the history of CSR
To have a clear idea of whether you think CSR is a trend
or a fad
To look at companies who promote CSR
To examine some of the issues associated with CSR
To have developed your own opinion on the future of
CSR

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