The paper "Challenges of the Adoption of CSR in Petrochemical Companies" is a good example of a finance and accounting research proposal. Businesses are run with the main objectives of profit maximization, growth of sales, and survival. In order to achieve these objectives, companies had previously ignored their environment and focused on the factors that will help them achieve the main objectives (Caroll, 1999). Recent decades have however seen more and improved recognition of the environment surrounding businesses and better attempts to exist within these political, social, economic, environmental, and technological confines (Crane and Matten, 2016). CSR in petrochemical companies is mostly focused on environmental protection as the activities and operations that take place in the company usually exploit the environment.
Activities that affect the environment have gained massive interest as their impacts are more far-reaching than social and other impacts. Environmental effects are largely felt as they affect the whole global ecosystem. The majority of the developed countries are at the forefront of oil production as well as other activities related to petrochemical production. In the developing world, the gulf countries produced about 28% of the world’ s petroleum needs (Kubursi, 2015).
The trade of petroleum products forms the major economic activity in these countries thus contributing to major environmental degradation. Inasmuch as petrochemical companies in the developing world have attempted to integrate CSR and environmental reporting into their operations, the activities have evidence of lacking genuine motives for implementing CSR (Werther and Chandler, 2010). As such these petrochemical companies are accompanied by corrupt practices in the implementation of CSR and lack of commitment in the practice of environmental disclosure thus lacking commitments towards stakeholders. Literature Review The concept of Corporate Social Responsibility (CSR) emerged in the 1950s and is seen as a practice that is relatively uncoordinated (Klonoski, 1991).
Various different definitions have been put across to suggest the meaning of corporate social responsibility. Several decades later the definitions of CSR are still variant and are based on the individuals and the responsibility that accompanies the practice (Turker, 2009). Earlier authors such as Milton Friedman (1970) defined CSR as a mere commitment to follow the regulations of the government and abide by rules related to society.
Corporate social responsibility (CSR) in developing countries has been on a surge in the current decade due to environmental awareness, industrial pressure, and a total effect of globalization (Matten et al, 2008). Adoption of CSR in petrochemical companies is accompanied by benefits and challenges, these are discussed in the following sections in more details: Benefits to practice CSR in Petrochemical Companies CSR is seen as a business opportunity with petrochemical industries producing clean fuel on the basis of demand by customers who are environmentally conscious. Stakeholder reaction to corporations that invest in CSR determines improved business or decreased business thus affecting investment (Govindarajan and Amilan, 2013; Cordeiro and Tewari, 2015).
Apart from corporate advantages, the long term benefits of CSR by organizations ensure that the future generation can still benefit from the current responsible business. Sun and Stuebs in 2013 suggested that companies with CSR as part of their business strategy have improved productivity in their operations. The pair analyzed the data of 170 American chemical companies, who already had strict government regulation, and found that companies who conduct active CSR reporting were more likely to have increased productivity.
The pair noted limitations to the study however, mainly being that the companies surveyed were already in good standing with the government and that one industry’ s result should not be generalized.
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