The Government’s vision

It seems that these days people are becoming aware that they are all connected through globalisation. Changes have contributed towards the expansion of the world economy, caused by major shifts in the composition and location of production and consumption activities, and reduced the ability of national and local governments to act independently. As a result, globalisation has reshaped the way millions of people earn their living and the way societies are organised. This, in turn, has serious consequences for the environment. Problems like exploitation, poverty and the growing population rate in one part of the world will not stay isolated geographically.

Current corruption in the corporate sector has also brought into field of vision the relationship between the corporations and the communities, they operate in. Not astonishingly, Corporate Social Responsibility (CSR) is now being discussed and existent around the World CSR reporting has been gaining headlines in the last few months.1 However, there is still a little agreement on what it connotes to be a sustainable corporation and specifically what the definition of CSR is. On the other hand, consumers need more information about multinational companies' contributions to society in the view of their new stakeholder power. Otherwise, the growing of information from the companies on CSR does not essentially mean that companies have become more transparent today.

With this hypothesis and my approach, this paper will analyse and debate the following research questions: 1. Definition of Corporate Social Responsibility 2. Who would be interested in the reports produced? 3. Why is there a need for it? 4. How realistic is the Government's vision? Delimitation The wide extent of information available and the restrictions of the guidelines for the assignment mean that this paper will only analyse and answer the questions posed in the problem statement from a corporate perspective.


In order to answer the assignment questions, I have chosen to use a few articles found on the Internet, and books that I am acquainted with through other modules I have had within the field of CSR and corporate communication. Furthermore, some of the theories I have applied were from a comprisal at my home university in Germany which I did not bring with me. Articles found in journals on the Internet which debate the theories were used instead of the originals, since I do not remember the titles of them and do not in all cases know if they are books or articles in journals available on the Internet. I hope that this background material provides adequate theoretical and practical information on the theme, which can be used as the approach for the analysis and discussion in the report.

Definition of Corporate Social Responsibility

Nowadays, Corporate Social Responsibility, CSR, is a current issue discussed in the industry, in the politics as well as by the average punter, and it seems that the concept has a variety of definitions. Gundlach and Bloom (2001) define Corporate Social Responsibility as the commitment a company has to its stakeholders who can influence public relations who are affected by corporate policies and practices. These allegiances go beyond the law and the company's shareholder duties, and fulfilment of them are intended to reduce any harm to a minimum and maximum of the advantageous impact on society in the long run.

Lantos (2001) describes CSR as "the obligation stemming from the implicit social contract between business and society for firms to react to society's long-term needs and wants, optimising the positive effects and minimising the negative effects of its actions on society." "Environmental and social issues have been viewed historically as circumferential concerns to a company. Before the 1970s into the 1980s, both environmental and social responsibility management were incipiently bordered by managers as inevitable added costs driven mainly by public demands or regulations. During the 1980s and 1990s, more companies began to assume humanitarianism where they felt forced to do good deeds that in some way gave back to the natural environment or the community." 

Many multinational companies have started centring on the Triple Bottom Line where they perform on financial, social, and environmental dimensions at the same time.5 There is a growing awareness that CSR is a significant part of good business which also impacts the long-term profitability and efficiency of a company.6 Several leading corporations have awake that social contributions and competitiveness are not necessarily exclusive.

However, since there is no clear definition of Corporate Social Responsibility, it is very difficult to adopt standards to decide if a company is socially responsible. Every company could promote itself as socially responsible if it takes environmental issues into consideration, keeps pollution rate to a minimum and recycles. These concerns can be carried even if the company has practiced racial discrimination or operates at the limits of legality. Who would be interested in the reports produced? Corporate social responsibility (CSR) is related to 'the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society'. 

It is 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 the community and society at large. In particular, according to the World Business Council for Sustainable Development (WBCSD, 1999) this means acting with responsibility in its relationships with other stakeholders, not just shareholders.10 There are various estimations anent who the corporate stakeholders are. Holme and Watts (1999) specify stakeholders as those affected by or those affecting a business's activities including representatives from labour organizations, financial institutions, academia, church, indigenous peoples, human rights groups, and as well as governmental and non-governmental organisations.

Based on Estes (1999) the researchers share the view, that stakeholders include employees and contractors, customers and suppliers, the community and society (including the natural environment) as well as shareholders. Corporate social reporting provides relevant information to shareholders as investors. It is argued that a balanced degree of corporate social responsibility is a sign of a flexible, sensitive and responsive management style that results in higher profitability and there is a link between social responsibility and long-term planning. A view to the long term is generally viewed as a sign of good management.

Corporate social and environmental reports are playing an increasingly crucial role in building trust between companies and their stakeholders. Referring to our financial reporting tutorial we worked out that following groups could be interested in a Corporate Social and Environmental Report: government officials, consumers, "Green" institutions and parties, individual investors, institutional investors such as financial institutions, shareholders and stakeholders as well as employees of a company and residents who live near by the corporation's factory. There is wide variety of groups who are interested in CSRs. They all have more or less interest in CSRs depending on the point of view. When it is subtle and try to subdivide all groups into their degree of interest then it is not surprising that the degree of interest depends on the relationship between the corporation and the aims of an interest group.

The interest of an employee is different to the interest of a financial institution. It can be stated that the employee identifies his own social responsibility with the social responsibility of the corporation where he works for. Whereas the interest of a financial institutions is directly linked to financial aspects. If the corporation's social responsibility are low and could damage the image of a corporation, which can affect the earnings of the corporation, it might be possible that these lead to decisions against investments on the part of the financial institution.