CSR policies are often the result of the influence of various drivers.

Critically reflect on

how companies and organisations consider the implications proposed by each driver when

adopting CSR in practice to tackle the (super) wicked problems of our contemporary times.

Introduction

Business is generally regarded as one of society's most influential organizations. Within this

framework, it is unavoidable that business organizations will be scrutinized for their part in

addressing the community's economic, social, legal, and environmental concerns. The concept of

corporate social responsibility(CSR) is central to the seamless connection between business and

community.

Many people regard CSR as an essential component of an organization's survival because it

specifies its duties and adherence to the various societal standards (Luo & Bhattacharya, 2006).

It is regarded as a firm's dedication to achieving sustainable growth, requiring them to balance

and better environmental and social impacts without jeopardizing economic success. According

to this viewpoint, businesses offer the factors that may contribute to a better world (Friedman &

Miles, 2002), while also facing demands to demonstrate accountable business practices (Pinkston

& Carroll, 1994). Businesses are now required not only to return profits to their shareholders, but

also show a balanced business perspective by incorporating social and environmental concerns

into their operating mandates, which go above and beyond the usual call for meeting economic

and legal obligations. The business case for a business to participant in CSR is frequently based

on three important drivers: consumers, workers, and investors care in ways that generate

economic incentives for businesses to prioritize corporate responsibility (Carroll & Shabana,

2010). This essay will look at managers, consumers and investors as drivers of CSR.
Managers as Drivers of CSR

The notion that top managers can be drivers for corporate social responsibility originated in the

business sphere. Corporate social performance models have long communicated the idea that

managers, due to their decision-making power, can be agents of social responsibility. In the past,

these models have been important in reflecting the evolution of business and societal thought and

shaping notions about corporate social responsibility (Swanson, 2008). According to Frederick

(2006)corporate social responsibility was propelled in the 1950s by the idea that companies

should meet societal duties by serving as a fiduciary for a diverse range of social claims. This

ambiguous concept was followed in the 1970s by a similar but separate school of thought. This

next line of thought, called "corporate social responsiveness," was shaped by the work of

Ackerman and Bauer (1975) and others, and concentrated on the patterns of behavior that help

companies meet social demands and requirements. Inquiry into responsiveness, “which is

managerial in tone and quintessentially pragmatic, looks to institutionalized company policies,

such as social auditing and social scanning techniques, as means by which organizations can

carry out their reactions to social expectations, many of which are embodied in public policy

processes that serve as cues for substantive responsiveness goals” (Preston & Post, 1975). While

responsibility has moral connotations of duties or obligation to others, responsiveness arose from

a "how to" mindset. As will be seen, it is the latter that gives the former with a toolset. Indeed,

without the creation of responsiveness methods, the notion that managers can be agents of social

responsibility may never have taken hold (Friedman & Miles, 2002)

While the longitudinal perspective on responsibility and responsiveness has had a significant

impact, most corporate social performance models are rigid categories of these subjects at a

specific moment in time. Sethi (1975) paired responsibility and responsiveness with validity as a
benchmark for assessing corporate social performance in one such early classification,

categorizing three types of business behavior as proscriptive, prescriptive, or anticipatory and

preventative. Firms must only satisfy economic and legal responsibilities to be considered

proscriptive legitimate. In the second instance of prescriptive responsibility, businesses align

their conduct with current societal standards, beliefs, and expectations. Finally, when a company

practices social responsiveness, it predicts social changes and takes an active role in averting

negative effects of business operations even before external social players are conscious of them

or public policy is developed to handle them. Carroll's (1979) three-part model of corporate

social performance in terms of social responsibility, forms of responsiveness, and the social or

stakeholder problems concerned reflects this practical tone.

According to Carroll's model, corporate social responsibility is divided into four categories,

beginning with economic responsibilities, which are viewed by society as the fundamental

building element of business, and progressing to the expectation that companies respect the law.

The third element of responsibility is that company be ethical and adhere to societal standards of

right behavior that are not yet codified in law. Finally, some societal constituents demand

corporation to be a decent neighbor and to accomplish philanthropic obligations to the

community on their own initiative. “This model also conveys that modes of responsiveness can

be expressed as proaction, accommodation, defense, or reaction in response to social or

stakeholder issues such as consumerism, the environment, product safety, occupational safety,

and shareholder interests, highlighting managers' role in determining which social issues should

be of interest to the firm and what responsibilities are entailed” (Swanson, 2008). Carroll's

framework, as a categorization of research subjects, highlights an evolutionary trend in the field

of business and society: its specialists have attached more precision to responsibility and

responsiveness over time, eventually improving the role of managers in both (Swanson, 2008).

“Wartick and Cochran (1985) extended Carroll's model by proposing that one of its dimensions

had matured into a new field called social issues management, which focuses on issue

identification, issue analysis, and response development, and features the business sector as a

moral agent while emphasizing that responsiveness involves managerial approaches” (Carroll &

Buchholtz, 2006). Wood (1991) subsequently highlighted “the role of managerial discretion as a

driver of corporate social responsibility, processes of corporate social responsiveness, and

outcomes of corporate behavior”. Throughout the process, she delineated the potential managers

have to influence social performance by deciding an organization's responses to society in terms

of environmental evaluation and stakeholder and issue management, which lead to a variety of

outcomes for society that can either reinforce or contradict society's expectations of social

responsibility.

The notion that corporate social responsibility begins at the top harkens back to Abrams' (1951)

early appeal for leaders to embrace their societal responsibilities, which is mentioned in the

introduction. For Abrams, this suggested how managers should approach their responsibilities to

a broad variety of stakeholders, including shareholders, customers, workers, and the general

public, a vision that ultimately became a fundamental tenet of stakeholder theory (Frederick,

2006). Davis (1964) expressed a similar opinion when he observed that the managerial position

in more developed and fruitful societies is differentiated to represent expectations that managers

acquire professional norms that assist them in achieving constructive societal goals. Swanson's

(1999) more recent model elaborates on top-level job difference, connecting it to decision-

making processes in official and unstructured organizations that result in two kinds of social
responsiveness. She defined executive normative myopia and organizational value neglect on the

one hand, and executive normative receptivity and organizational value attunement on the other

as opposing points of reference for investigating the relationship between executive decision

making and corporate social performance. Swanson's overall argument for value negligence is

that when senior managers display normative blindness by neglecting, suppressing, or rejecting

the role of morals in their decisions, entire organizations can lose contact with shareholder

standards of social responsibility. “These value-based standards include calls for product safety,

human rights regard, equitable employment, and sustainable business practices. Since it is the

task of the executive leader to anticipate social problems and work toward their solution”

(Drucker, 1968), Value negligence can be viewed as a standard or frame of reference for

comprehending what can occur when managers demonstrate a blind spot in the domain of social

responsibility. It characterizes a company's general stance regarding the society when senior

managers repeatedly fail to recognize and analyze the values present in his or her decisions along

with those of other employees (Logsdon & Corzine, 1999). Swanson, on the other hand, defined

normative receptivity as executive decision making that actively seeks to integrate principles or

normative information as a forerunner to the organization's ability to do so. Receptivity is the

inverse of reasoning in that it reflects an increased consciousness and respect of values in the

leadership mentality, which is communicated all through the casual and official workplace and

performed by boundary-crossers and other employees.

Consider the long-running dispute regarding Nestle's sales of baby formula to demonstrate how

neglect and attunement can be used as a frame of reference for corporate social responsibility.

Nestle Corporation encountered societal resistance for many years to its promotion of infant

formula in developing nations. Critics, including the World Health Organization, argued that
unclean water and poor literacy rates made the product dangerous for selling in those nations

(Sethi, 1994). Nestle eventually became the focus of strong pressure from stakeholders seeking

to force the company to conform with a global rule limiting such sales. This dispute can be

viewed as a conflict between limited profit seeking and broader societal values in that it appears

that Nestle officials adopted a myopic mentality, referring to narrow company goals at the

expense of wider societal values, especially a regard for baby life (Swanson, 1999).

In a nutshell, Nestle neglected to strive for attunement and to engage detractors in prompt,

productive conversation. It appears that top managers neglected to consider alternatives by

sticking rigidly to initial plans. For example, if Nestle managers had chosen to handle the baby

formula as a pharmaceutical product, distributing it by prescription through pharmacists, the

debate could have been avoided in its early phases (Husted, 2000). There was a model for this

type of re-evaluation in that pharmaceutical firms such as Abbott Labs had effectively reacted to

shareholder concerns by switching (Austin & Kohn, 1990). Nestle's inability to re-envision its

position as a food company can be viewed as an inability of top managers to demonstrate

normative receptivity and measure requiring social values into their decisions, a capacity that

would appear to be especially crucial when businesses exist globally in host country with

cultures that differ from those of the home country.

While attuned responsiveness is best achieved through long-term strategy planning, it can also be

achieved through a more instant response to a disaster. Whether a crisis is caused by an oil spill,

product tampering, or another unanticipated event, traditional thinking holds that businesses

should build the capacity to foresee crises and react quickly to the requirements of negatively

impacted stakeholders. The Tylenol poisonings at Johnson & Johnson have grown into a case

study in manager-led accountable crisis management. In brief, seven people perished in 1982
after cyanide was accidentally added to Tylenol capsules on store shelves, causing Johnson and

Johnson, the product's manufacturer, to pay significant costs by willingly withdrawing and

burning leftover capsules. Throughout this process, James Burke, the Chief Executive Officer,

used the media aggressively to inform consumers of the measures being taken to tackle the

problem and safeguard the general population. Soon thereafter, Johnson & Johnson

implemented tamper-resistant packaging as a safety precaution, showing that successful crisis

management entails not only quick response and effective interaction with stakeholders, but also

the kind of learning within the organization which can assist in minimizing or hindering future

crises. In addition, these lines, receptivity and attunement can be used to understand how critical

it is for senior managers to keep the public welfare in mind while adapting to shareholder

requirements. In contrast, the reasoning contained in myopia and negligence helps to explain

why societal control of business, such as the pressure put on Nestle, is required in the first place.

Consumers as drivers of CSR through Ethical Consumerism

“In Morality and the Market: Consumer Pressure for Corporate Accountability”, (Smith, 1990, p.

7) wrote about ethical influences on buyer behavior ("ethical purchase behavior") and how they

could be used as a type of social control over company, with consumers having control

“purchase votes on social responsibility issues”. This concept was novel at the time, but it is now

taken for granted. It goes by a variety of names— “conscience consumerism,” “ethical

consumerism,” the “green consumer”—but the basic concept is that customers worry about

issues of corporate responsibility, which influences their purchasing and consuming habits,

providing motivation for businesses to be socially and environmentally responsible.

Smith's thesis (1990, pp. 184-196) used customer autonomy as a theoretical justification for

capitalism. Although the notion is frequently ideologically laden (e.g., "the consumer is king"),
there is undoubtedly some consumer power in highly competitive consumer marketplaces. Smith

proposed that the concept of customer sovereignty could stretch beyond the more obvious

qualities of the product to include the producer's corporate responsibility practices. In support, he

invoked the most visible and intentional form of ethical consumerism (at the time): pressure

group-organized consumer boycotts. “Smith cited evidence of relatively large numbers of

consumers boycotting companies over social responsibility issues; for example, as many as one

in four U.K. consumers were said to be boycotting South African produce over apartheid, and the

pressure on Barclays Bank in its home market (coupled with its North American aspirations) was

ultimately a key factor in the bank's decision to withdraw from South Africa (it was the largest

bank there)”. In its description of boycotts in the United States over civil rights and the Vietnam

War. Vogel's (1978) “Lobbying the Corporation” provided comparable proof. Historically, the

boycott has had some remarkable triumphs. “The British government repealed the Stamp Act in

1766 as a result of the colonialists' embargo of British products” (Friedman, 1999). Wolman

(1916) and Laidler (1963) detailed how, at the end of the twentieth century, the consumer

boycott was the key to unionization in the United States. “Gandhi organized boycotts of British

salt and cloth as part of a nonviolent direct action plan that led to Indian freedom in 1947”

(Bondurant, 1965). “Rosa Parks' refusal to give up her place on a city bus to a white man sparked

the Montgomery bus boycott of 1955, which nearly bankrupted the bus company and was backed

by more than 90% of blacks until bus segregation in the city was abolished” (Smith, 2008).

According to Friedman (1999), this was the most important consumer boycott in American

history, launching Rev. Martin Luther King, Jr. as the head of the contemporary civil rights

movement in the United States.

Recently Greenpeace-inspired boycotts of Shell over its attempt to dispose of the Brent Spar oil

platform in the Atlantic Ocean resulted in a 50% drop in sales at some German Shell stations

during the height of the protests (Moldoveanu & Lynn, 1999).The Economist (1995, p. 15)

proposed that "it may be no bad thing... for consumers to ask for a higher standard of behavior

from the firms they buy from" in response to the boycott after Shell abandoned sea disposal of

the platform. Shell's issues were exacerbated by the general public's responses to accounts of

damages to the environment caused by its activities in Ogoniland, Nigeria, and the business's

obvious inability to capitalize on its political influence to avert the execution of Ken Saro-Wiwa

by Nigerian officials, who had been demonstrating for Ogoni rights (Smith, 2008).

Environmental and human rights advocates' critique of Shell, as well as the related boycotts,

were said to be important drivers to a fundamental shift in how the business tries to live up to its

social and ethical responsibilities (Cowe, 1999; Shell, 1998). Activists then shifted their focus to

ExxonMobil, organizing a worldwide protest in response to the company's resistance to climate

change theories. Over one million British vehicles took part in the boycott even though boycotts

are frequently linked with liberal causes, they can originate from both the right and the left and

are not limited to democracies in the West (Smith, 2008). Arla's Middle East sales ($430 million

per year) disappeared almost immediately as a consequence of a boycott in early 2006, after the

release of cartoons depicting the Prophet Muhammad in the Danish daily Jyllands-Posten

(Ettenson, et al., 2006).

These instances of consumer boycotts plainly show ethical consumerism. However, while they

prove the presence of ethical consumerism and its possible impact on corporate responsibility,

they are extreme examples in many ways. What about more mundane examples? "Ethical

purchasers... have political, religious, spiritual, environmental, social, or other motives for
selecting one product over another..." They all have one thing in common: they are worried with

the consequences of their buying decisions, not only on themselves, but also on the world around

them." (Harrison, et al., 2005).

Investors as drivers of CSR

socially responsible investment (SRI), also known as "ethical investment," is the practice of

incorporating social, environmental, or ethical criteria into financial business decisions. Since its

inception in the early 1990s, SRI has grown in popularity as both a competitor and a supplement

to traditional investment (Robson & Wakefield, 2007). SRI in broad terms, is “the theory and the

practice of making strategic investment choices through the integration of financial and non-

financial factors such as personal values, societal demands, environmental concerns, and

company governance concerns” (Lozano, et al., 2006). These non-financial factors are frequently

associated with CSR, which is defined as “the philosophy and practice of voluntarily integrating

social and environmental concerns into company operations and mobilizing company resources

to benefit society beyond basic economic and legal concerns” (Jamali, et al., 2008). There are

still opposing views on CSR, but modern proponents contend that businesses' goals should go

beyond simple legal compliance to include the promotion of financial well-being and the

satisfaction of stakeholders' non-financial aspirations (Baron, 2001; Cheah, et al., 2007). SRIs

(socially responsible investors) are more apt to invest in businesses that have CSR agendas

(Sparkes & Cowton, 2004). Because this investment type has the ability to make significant

changes to the world's climate while also providing better returns to investors, all businesses in
an ethical investment portfolio are evaluated based on environment, social justice, and corporate

governance, also known as ESG investing. Investors can engage in businesses directly through

stocks, mutual funds, or exchange-traded funds, depending on the nature of their company

(Cheah, et al., 2011). Mutual funds are excellent for constructing an ethical investment portfolio

by participating in a variety of businesses from various industries. In 1971, Pax World was the

first to launch the first ethical trading joint fund. Startups can also get modest or microloans from

investors (Vaidya, 2023).

“One of the socially responsible investment funds is the Clearbridge Sustainability Fund. Its

biggest assets include Costco, Apple, Alphabet, and Microsoft. To improve output, all of the

above socially responsible funding firms adhere to high sustainability factors such as software

development. These businesses are also socially responsible, supporting and working for the

upliftment of impoverished people and using green energy sources to power their workspaces. It

does not include any funds with exposure to petroleum, weaponry, or animal-based goods.

Microsoft ranks 32nd out of 1013 businesses in terms of ESG” (Vaidya, 2023).

Conclusion

This essay has discussed the role of senior manager in pushing their companies toward

irresponsible or responsible corporate social performance, as well as the role of customers

through ethical consumerism and investors through social responsible investment or ethical

investment as CSR drivers.

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