The beginning of twenty-first has brought environmental challenges like resources conservation, climate changes and global warming, which have directly impacted the role of business in society. In the last few years there has been an increasing and greater concern about the social and environmental effects of companies’ practices: according to the Triple Bottom Line (TBL), stakeholders (e.g. shareholders, customers, employees, governments, community and the general public) are interested in topics related to social and environmental issues, in addition to economic performance (Ho and Taylor, 2007). This means that stakeholder care about whether a company is socially responsible and environmentally friendly. It is for this reason that Corporate Social Responsibility (CSR) is became fundamental for a business; in fact, CSR is a form of corporate self-regulation integrated into a business model. The purpose of CSR is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders, and all other members of the public sphere (Fontaine, 2013).
Four layers of responsibility
Following the Carroll’s four-part model (1991), CSR is a multi-layered concept that can be divided into four different forms of corporate social responsibility, each addressing individual issues (see Appendix A).
1. Economic Corporate Social Responsibility.
Historically business organizations primary role was to produce goods and services in order to make a profit; the profit motive was the primary incentive for entrepreneurship (Carroll, 1991). Some of the Economic Responsibilities state:
- It is important to perform in a manner consistent with maximizing earnings per share;
- It is important to be committed to being as profitable as possible;
- It is important to maintain a strong competitive position;
- It is important to maintain a high level of operating efficiency;
- It is important that a successful firm be defined as one that is consistently profitable.
The achievement of these responsibilities is essential for a firm, because without it the other three are irrelevant since the firm would go out of business. (Carroll, 1991)
2. Legal Corporate Social Responsibility.
Beside the profit motive, the firm is expected to obey to laws and regulations promulgated by federal, state, and local governments under which business must operate (Carroll, 1991). Some of the Legal Responsibilities state:
- It is important to perform in a manner consistent with expectations of government and law;
- It is important to comply with various federal, state, and local regulations.
- It is important to be a law-abiding corporate citizen;
- It is important that a successful firm be defined as one that fulfils its legal obligations;
- It is important to provide goods and services that at least meet minimal legal requirements.
As for the Economic ones, the achievement of the Legal Responsibilities is required for CSR.
3. Ethical Corporate Social Responsibility.
The Ethical Responsibilities refer to those activities and practices that are expected or prohibited by society even if they are not codified into law. Ethical Responsibilities include those standards, norms, or expectations that are considered by consumers, employees, shareholders and the community to be fair, just, or in keeping with the respect or protection of stakeholders’ moral rights. In some way, ethics and values are the driving force behind the creation of laws or regulations, in fact, the Ethical Responsibilities are in a dynamic interrelation with the Legal ones. (Carroll, 1991) Some of the Ethical Responsibilities state:
- It is important to perform in a manner consistent with expectations of societal mores and ethical norms;
- It is important to recognize and respect new or evolving ethical/ moral norms adopted by society;
- It is important to prevent ethical norms from being compromised in order to achieve corporate goals;
- It is important that good corporate citizenship be defined as doing what is expected morally or ethically;
- It is important to recognize that corporate integrity and ethical behaviour go beyond mere compliance with laws and regulations.
4. Philanthropic Corporate Social Responsibility.
The Philanthropic Responsibilities refer to those corporate actions that meet society’s expectation that business be good corporate citizens, such as acts or programs to support human welfare or goodwill. For example, philanthropic actions include business contributions of financial resources or executive time, like contributions to the arts, education or community. The main difference between these kinds of responsibilities and the Ethical ones is that they are not expected in an ethical or moral sense: communities would companies contribute to humanitarian programs or purpose, but they will not consider the firms as unethical if those do not (Carroll, 1991). !!! Some of the Philanthropic Responsibilities state:
- It is important to perform in a manner consistent with the philanthropic and charitable expectations of society;
- It is important to assist the fine and performing arts;
- It is important that managers and employees participate in voluntary and charitable activities within their local communities;
- It is important to provide assistance to private and public educational institutions;
- It is important to assist voluntarily those projects that enhance a community’s “quality of life”.
Furthermore, philanthropy is highly desired and prized but actually less important than the other three categories of social responsibility (Carroll, 1991).
Five dimensions of CSR
After having seen the four layers of responsibility, it is necessary to introduce the five dimensions of CSR. According to Alexander Dahlsrud of the Norwegian University of Science and Technology, CSR involves five dimensions: the first three are those include in the triple bottom line concept (environmental dimension, social dimension, economic dimension), the other two are the stakeholder dimension and the voluntariness dimension (see Appendix B).
1. The environmental dimension.
According to the World Commission on Environment and Development (WCED, 1987), environmental sustainability means “meeting the needs of the present without compromising the ability of future generations to meet their own needs”; generally, it is the extent to which business activities directly impacts the natural environment in a negative way (Slack et al., 2016). Due the growing interest in environmental issues, nowadays this dimension is of key importance. In order to achieve sustainability is needed a reducing of the burden on the environment, which means that is required to change the way goods and services are created (e.g. using environmentally friendly ingredients / using recycling or non-wasteful packaging).
2. The social dimension.
Social responsibility means being responsible for the social effects the company has on people, both directly and indirectly. Social responsibility is based on the extent to which companies should work to build up a better society, to integrate social concerns in their business activities and consider the full scope of their impacts on society (Nasrullah and Rahim, 2014). A company as social actor, it should work for the wellbeing of community (e.g. sourcing fair-trade products or paying employees a liveable wage).
3. The economic dimension.
Economic responsibility means that a company has to return money to investors, to achieve leadership position in the market, to obtain maximum possible profits, guarantee the customers’ satisfaction and loyalty, to give fair compensation to employees, to give goods at fair prices to customers, to promotion their products or services through costly advertising campaigns (Gonzalez-Rodriguez, 2015). Investment in CSR is like other business investments: companies sacrifice short-term profit for a positive payback in the future.
4. The stakeholder dimension.
The main purpose of this dimension is to minimize conflicts between stakeholder and to avoid all unethical behaviours. Companies implement SCR activities to improve their relationships with stakeholders; they must take in consideration the whole supply chain end define certain levels of collaboration in order to identify and prevent all the unsustainable or socially irresponsible practices (Arsic et al., 2017).
5. The voluntariness dimension.
This dimension is based on the concepts of ethical responsibilities and philanthropic responsibilities. Indeed, voluntariness dimension means that companies do not simply conform to legally established regulations, but they choose to follow the CSR standards voluntarily (Slack et al., 2016).
As stated above, due the growing interest in environmental issues, nowadays the environmental dimension is an essential component of a corporate’s business strategy. One way in which a company can become more environmentally sustainable is through the development and use of green marketing. Peattie (1995) describe green marketing as “the holistic management process responsible for identifying, anticipating and satisfying the requirements of customers and society, in a profitable and sustainable way”; thus, green marketing activities are those designed to achieve the company’s strategic and financial goals in manners that minimize their negative impact on the natural environment. In a practical sense, marketers have to consider the four Ps of the marketing mix (Product, Price, Place, Promotion) and to design and execute them minimizing the burden on the environment (Kotler, 2011).
Consider the Toyota Prius as a prime example of green marketing. The Toyota Prius is a hybrid car – one that runs on both a conventional petrol engine, and an electric battery that recharges during use of the vehicle. In city driving where it is more economical and better for the environment the electric power source is used and when on the open road at higher speeds to petrol propulsion is used when it can be more economical.
The Prius was first introduced in Japan in 1997 and was rolled out worldwide in 2001. It is currently the most fuel efficient car sold in the US (USEPA, 2008), and is the 2nd least CO2 emitting car in the UK (Department for Transport, 2008). The Prius has won several awards from the car industry and consumers and by June 2007 an estimated 757, 600 vehicles had been sold. Interestingly enough the Prius was not strongly marketed on its eco-friendliness but more on its fuel efficiency and the likelihood of reduced fuel costs.
This highlights that impacts upon sustainability do not need to be the headline act in a marketing effort but can still be made. Other example of green marketing included green energy generated from renewable sources such as wind farms, shade grown coffee grown under forest canopy thereby protecting bio-diversity, CFC-free energy efficient fridges, or eco-washing powder containing less chemical additives that are harmful to the environment.
2019-5-2-1556799684