How Corporate Social Responsibility Influences the Reputation of Businesses - Research Proposal Example

INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE REPUTATION Student Name Student Number Tutorial Session Abstract The purpose of the research is to determine how corporate social responsibility influences the reputation of businesses. The study will be conducted through a case study research design while the main methodology will be qualitative. The study will also adopt purpose sampling with the approximated sample group being approximately 30 for in-depth interview and 10 focus group discussions. The data collected will be transcribed, thematised, and coded appropriately to facilitate reporting. The study will help in encouraging the integration of corporate social responsibility in Australian businesses. 1.0 INTRODUCTION 1.1 Background Corporate social responsibility (CSR) entails business activities that involve projects that benefit the society. It can entail several tactics including giving business’ proceedings for charity and environmental sustainable initiatives. Some of the broad categories of social responsibility practices that businesses engage in include environmental efforts, philanthropy, ethical labour practices, and volunteering (Caramela 2016). Environment is one of the primary focuses of businesses when it comes to CSR since corporate have a large carbon print. Steps to reduce the footprints are, therefore, considered good for the society and company as a whole. On the other hand, business can engage in philanthropy through donating to local or national charities since they have a lot of resources that can benefit local community programs and charities. Businesses can also practice CSR when they treat their employees ethically and fairly (Hopkins 2007). The concept applies often on the international businesses whose labour laws differ with that of the United States. Lastly, volunteering is a way that a company can show its sincerity in supporting social development. Under CSR, companies can engage in good deeds minus giving without receiving anything in return. Corporate social responsibility (CSR) has gained increasing attention over years in the corporate work around the globe. In academics, CSR has also gained significant focus since it has a huge impact in the business industry. CSR has gained a growth of interest in among the scholars and practitioners in the past decade that is seen it grow to be a widespread concept (Hopkins 2007). Due to popularity and pressure, most of the businesses introduced CSR activities and developed measures that ensure that all its sectors adhered to the process and the same communicated to the stakeholders. Today, several companies face growing expectations from different stakeholders groups. The companies have attracted great attention and pressure on environmental and social issues. Environmental and social responsibility is important to the companies of all sizes and types (Mullerat 2010). Since the market demand has made it important that CSR activities are integrated into the business, it is important that all the business engage if they are to survive the competition. It is, therefore, important that organizations translate the strategic benefit associate with CSR to benefit its reputation since it is of great value. 1.2 Research Justification Activities associated with the CSR can means good corporate reputation as per the stakeholders views (Hopkins 2007). However, there is still lack of attention on the CSR practices and reasons in relation to building business reputation. It is still not clear on how CSR affects the reputation of the businesses. It is, therefore, important that issues tackling the link between corporate reputation and CSR. The main goal of the report is, therefore, to elaborate on the link between corporate reputation and CSR. In other words, the study focuses on determining how businesses can use CSR to build a good reputation for themselves and maximise the profits. The study is determined through the analysis of the perspective of different stakeholders (Mullerat 2010). The report will also help determine is CSR is only implemented by the established business and not the upcoming ones. Furthermore, it will take into consideration why some businesses decide to venture into businesses while other opt not to engage in the CSR practices. 1.3 Statement of the Research Problem Most of the businesses have not been comfortable of CSR. Those against the concept have given a number of reasons to why it is not the best of concepts for the businesses. The first argument has been that the shareholders have been the owners of businesses thus should maximise on the profits. Integration of CSR will mean more money being spent on the business thus minimising the profits (Carroll & Shabana 2010). In other words, since CSR is a management approach among managers, they will be stealing from the shareholders. Second, the entrepreneurs argue that only the minor businesses are the ones that report on their social responsibility. Most of the effective business leaders do not spend time on CSR because it is wastage of time and resources. Some of the world renowned business personalities like Bill Gates and Jack Welch took time to achieve the world class status preferred (Baker 2008). Third, some of the companies have argued that they are busy surviving the hard times business thus cannot afford to implement CSR. They have argued that CSR is not a core part of the business but rather a destructor (Henderson 2009). As a result, CSR should only be implemented by businesses that have vast of resources but not those still struggling. Some of the businesses also argue that CSR should be the responsibility of the politicians and not the businesses. Traditionally, businesses have been considered to be beyond public policy and morality (Heath 2006). In explanation, governments should issue legal framework and leave the businesses to run their activities freely. It has also been argued that corporation does not really care of the life of the community around them and the environment but only maximum profits. 1.4 Research Objectives The research study will be conducted under a number of objectives; i. To assess the influence of corporate social responsibility on corporate reputation in Australia ii. To determine the corporate social responsibility practices integrated in Australia businesses iii. To assess the implications of corporate social responsibility on business performance in Australia iv. To analyse the stakeholders perception on integration of corporate social responsibility on Australian businesses 1.5 Significance of the Study The study enlightens the public and businesses on the importance of CSR. It also captures the status of CSR implementation status in Australia and how it has influenced the corporate environment. Furthermore, it elaborates on how CSR can be ensured among the entrepreneurs to ensure sustainable development. The study can also be used to advice the policy developer on suitable legal framework to develop or strengthen to ensure sustainable development in Australia. The audience of the study include the institutions that develop laws and policies in Australia and other countries. In addition, the study is of interest to business managers and the firms issuing consultancy services on CSR. It is also of benefit to the business practitioners and students since it enables them expand their knowledge on CSR, how they impact businesses, and how they can be promoted. 2.0 LITERATURE REVIEW 2.1 Influence of Corporate Social Responsibility on Business Reputation According to Šontaitė-Petkevičienė (2015), CSR is one of the most vital drivers of business reputation today. Studies indicate that organizations of all sizes and types may strengthen their corporate reputation through integrating CSR activities in their processes. Top business managers have, therefore, engaged in CSR as a way of building reputation of their businesses. Today the loss of corporate reputation has seen most of the organizations investing on CSR. There are a variety of reasons to why organizations engage in CSR. They engage due to the altruistic intentions, positive effect on employee retention, recruitment, motivation or even customer-related motivations among others. Even though the reasons might be different, the main goal of the CSR is to develop a better corporate reputation. It is not right, therefore, for businesses to treat CSR on the promotional basis only. Even though it is agreed that the organizations should conduct themselves in a socially responsible manner since it might affect the reputation of the corporate, there is a limitation on how the CSR might be integrated into the businesses. The study also argued that businesses should take long-term commitment to CSR activities and the same must be supported by the management at the senior most level. CSR activities should also be communicated through stakeholder dialogue, annual reports, or advertising. The key aspect of corporate reputation is the perception of the stakeholders groups on the CSR of the organization. In explanation, if the stakeholder groups are aware of the CSR activities that an organization takes, the reputation of the organization will be improved and maintained. However, it is important to note that CSR is a heterogeneous construct that can be broken down and affect the reputation of the business differently. In agreement, Maden et al. (2012) CSR plays a critical role in determining the reputation of the business among the stakeholders. Reputation status, on the other hand, is important on the competitive market in which firms need to compete for reputation so as to meet the expectation of different stakeholders. It is, therefore, important to understand the consequences and antecedents of CSR since it is an intangible asset. CSR can affect the behaviors of the investors, employees, and customers. Mukasa, Lim, and Kim (2015) also indicate that reduction of toxic emission and increase in charitable contributions can improve the reputation of the businesses. The study was based on the assumption that the reputation links help the business gain competitive advantage as it enhance the mitigation of losses. CSR activities can, therefore, be important to the corporate strategy of a firm. It enables the corporations to turn the environmental and societal risks into business opportunities through proactive CSR. Ali (2011) also argues that corporation use CSR to develop congenial relationship with the stakeholders and gain competitive advantage. However, CSR is only popular in the developed world and not the developing ones such as Pakistan. CSR has a positive influence on the corporate reputation and develop the intentions of the customers to purchase goods. Eberle, Berens, and Li (2013) also indicate that companies have increasingly engaged in social media communication concerning CSR. When businesses use social media to communicate their CSR activities, there reputation increases. Increase in perceived interactivity leads to stronger feelings towards the business and higher credibility of the message. The stakeholders then start to identify themselves more with the company thus boosting its corporate reputation. The use of interactive channels to communicate CSR activities can, therefore, improve the reputation of the corporate. 2.2 Corporate Social Responsibility Practices According to Popa (2015, p. 1283) a “good citizens business” must involve itself with issues of the community in which it operates and be sensitive to the social needs of the locals. Businesses should move from economic focus only to include social entities and public good. Companies need not only to pay taxes, produce goods and services, make a profit, and employ but also consider its environment of operation. In Romania, CSR was initially considered in terms of business, reputation or image and not stakeholders’ needs and sustainable development. However, the economic crisis of 2007-2008 made its efforts to vanish as companies became more focused on maximizing profits. CSR later recovered in 2012 and 2013 with the companies engaging in it gaining an importance of visibility and recognition. At the corporate level in Romania, CSR initiatives focused mainly in community support, environment, and education. However, CSR actions should not be limited to communal investment bust also include responsibility along employee welfare, customer relations, and supply chain. The main areas that CSR should focus on should include: first, the policies that minimise the environmental impacts of businesses. Second, businesses need to develop internal processes and policies that promote the development of healthy and safe environment, dialogue and participation, training, encouraging work-life balance, equal opportunities, and safe and healthy environment. Third, CSR should be enshrined on social performance that entails company participation on sporting, cultural, and social projects of the environment. Lastly, good administration is critical for CSR and entails a set of practices and rules that help develop appropriate decision-making activities inside the company. Galego-Álvarez, Formigoni, and Antunes (2014) argue that the CSR activities in the Brazilian society differ based in the geographical areas. The study that entailed an analysis of 500 companies clustered in 5 geographical areas indicated that geographical location had a role to play in the implementation of CSR activities. Companies that were located in the northern part of Brazil engaged more on the environmental practices whereas those located on the northeast and south of the country engaged in social practices. The study was also able to find that the businesses imitate the activities of the most successful one in the industry. The link between geographical area and CSR practices were due to social practices. Social pressures cause uncertainty hence making the firms to mimic the activities of the local businesses so as to gain legitimacy and limit uncertainty. The study also argues that corporate social responsibility is affected by media exposure, size of the company, industry concentration and the country. The results of the study were as per the Brazilian economy. Brazil is a country with 5 distinct geographic and economic characteristics. 2.3 Implication of Corporate Social Responsibility on Businesses Corporate social responsibility is of more importance to a business more than the profits. One aspect of social responsibility is protecting the environment. Another aspect entails the efforts of addressing social problems such as hunger and poverty. CSR is also expressed through ethical standards which entail how the business treats its various stakeholders such as customers, vendors, and employees (Zairi & Peters 2002). CSR causes stability in the business. Even though an owner of a small business might not consider organizational stability to be of priority, he or she will strive to ensure that the business experiences growth; develop dynamism, and an evolving organization that is recognised greatly in the industry. Even though stability might be used to mean a company that is standing still, it means more than that. It entails long-term revenue growth and increased profits and can make the corporate to become financially stable. CSR also makes the business to retain its customers. In the 21st century, some of the consumers might stop doing business with a given company with social reputation mainly due to social irresponsibility (Zairi 2000). On the other hand, businesses that show continued commitment to the environment and community can attract customers that share the same values. The good of company towards the community can increase the value of its services and products and result into higher customer satisfaction. The satisfied customers will in turn continue to do business with the company involved in such practices. A customer base that is stable and loyal is a valuable asset to many. CSR also enables businesses to be able to access funding. Businesses usually need capital to launch while it will need several capital infusions to expand its plans (Wilson 2000). Capital can be considered as a way of ensuring organizational stability that can be used to assist businesses help the owners of business to progress achieving long-term objectives. Investors consider the social and ethical standards exhibited by a business when determining whether to commit capital to the business. Some of the investors will focus on the companies with a social responsibility track record. CSR can help business in the recruitment of the best of talents. An upcoming business must develop a stable workforce through retaining the top-most talent and not losing its experts to competitors. The company also must work to acquire the best of the talents. Most of the young talented experts have grown in a time when environmental awareness and protection has been heightened. A company that is committed to society sustainable development is, therefore, a significant point of attracting the best of young talents. Commitment of a company to the environment will, therefore, be critical in determining whether the best of knowledge join it or not. CSR also develops a positive image of the business. Companies that ignore the environmental regulations or standards on how the employees and environment should be treated might have a bad reputation when the lapses come to surface in the social and traditional media. The image of the company affects how it relates with its stakeholders. It might also take time to restore the name of a company upon it being determined to be unsustainable. In explanation, damage control can take time and wastage of resources that ought to have used to address some of the important tasks of company building. Another consequence of unsustainable business practices is that it might lead to an eroded company image and make it difficult to win back the customers. Lastly, CSR can determine the stability of the cash flow of the business. Failure to comply to CSR might lead to penalties and fines by the government (Valmohammadi 2014). Such fines and penalties might be due to failure to comply the regulations that might attract law suits from their customers due to defects of the product or even from the employees due to working conditions that are unsafe. Such lawsuits can be costly to a small business thus affecting the cash flow. Stable cash flow is the lifeblood of the company as it enables it to meet its expenditures such as business development, fund marketing, and payroll programs (Teresa Nardo & Veltri 2014). Social responsible companies can avoid the litigation costs ethically. It can also help mitigate some of the negative costs that increase the expenditure of the company thus minimising the profits. Maintaining a stable cash flow can be improved through the integration of CSR into the businesses (Foote, Gaffney, & Evans 2010). 2.4 Business Stakeholders vis-à-vis Corporate Social Responsibility According to Top Quality Management (2009) integrity and honesty is important if a business is to develop a positive relationship with its stakeholders. In return, stakeholders determine the failure or success of a business. Stakeholders are groups or individuals who have ownership, rights, or interest in the business of its activities. The primary stakeholders of the businesses include shareholders, employees, suppliers, and customers (Bichta 2003). Each of these stakeholders has interest on how the organizations interact with them or performs. Success and failure of the business will lead to benefit or loss on part of the primary stakeholders. Another important group is the secondary stakeholders who can assist or damage the organization (Ward 2008). Secondary stakeholders include the media, political action groups, non-governmental organizations, unions, and governments. Most of the corporations, therefore, adapt the CSR with the intention of maximising the benefits of the stakeholders (Sen, Bhattacharya & Korschun 2006). CSR encourages the running of businesses into a social or ethical manner. 2.5 Information Gap Some of the things that define the corporate social responsibility activities include media exposure, size of the company, industry concentration and the country. However, there are fewer studies that capture status of CSR in Australia and the organizations in it thus making this study important. The study, therefore, aims to determine the CSR in Australia, assess its implications on business performance, and analyze stakeholder perceptions on integration of the CSR. 3.0 RESEARCH DESIGN AND METHODOLOGY 3.1 Research Design The research design to be used in the study will be a case study. A case study research design is an in-depth study to a given research problem as opposed to comprehensive comparative inquiry or sweeping statistical survey (Creswell, 2013). The research design is used to narrow down a broad field of research into a single or few easily researchable topics. The case study research design is important in testing whether a given model or theory applies on a given phenomenon in the real world. It will, therefore, help analyse the influence of CSR on the corporate reputation. Case study research design is more applicable when there is much known about a phenomenon or issue. And as per now, much is known about CSR and its impacts to the corporate environment. The research design will help determine a lot of concepts in the study. First, it will excel in enhancing the understanding of CSR through a detailed contextual analysis of how it impacts on the businesses. Second, it allows application of a variety of methodologies and also relies in a variety of sources during the study of the research problem (Creswell, 2013). Third, the case study research design will add strength and extend experience to what is previously known about the influence of corporate social responsibility on the business. The research design enables the social scientists to maximise the examination of the real-life situations and issue the basis for application of theories and concepts. It also enables for the methodologies extensions whenever appropriate. Lastly, the case study research design provides a detailed description on the rare and specific cases. However, the research design has a number of short comings. First, since a number of cases will be used in the study, generalisations of the findings to a wider group of things might not be accurate thus minimising reliability (Creswell, 2013). Second, intense exposure on the research study might cause bias on the researcher’s interpretation of the results. Third, the case study research design does not facilitate the assessment of the cause-effect relationship. Vital information might also be missing in the study hence making interpretation of the study harder. In addition, the case might fail to be typical or interpret the larger problem investigated. Lastly, the selection criteria of a case will determine its applications. For instance, if the selected cases represents unique or unusual problem of study or phenomenon, the interpretation of the findings will be applied to such of cases. The research question of the study is: i. What is the influence of the corporate social responsibility on corporate reputation? ii. What specific corporate social responsibilities are integrated in the Australian businesses? iii. Does the implication of corporate social responsibility influence the performance of Australian businesses? iv. What is the perception of the stakeholders on integration of corporate social responsibility on Australian businesses? 3.2 Research Methodology The data to be collected will be mainly qualitative. However, quantitative data might be accessed through the interactions with the corporations. The instrument to be used for research study will be interview guide. There are several research methodology methods to be used. First will be interview which is the most common method for collection of qualitative data. Interview will be used in in-depth interview with the relevant stakeholders including business managers, shareholders, and the public (Kara 2015). The interview used will be less structured and open ended and the same questions will be asked to all participants. Second, focused group discussions will be conducted among the locals who are affected in one way or another by the businesses. Third, observations will be used in the study which will include setting a prolonged time in setting. It will also entail the taking of field notes with the main focus based on what is seen. Cameras will also be used to record the activities or information on the research sites. Other recording instruments include diaries, narrative field logs, and notebooks. The sampling procedure to be used in the study will be mainly purposive sampling. Purposive sampling entails the use of an expert judgment to select a group of participants that represents the population of study (Kara 2015). It entails taking into consideration of factors that might influence the population such as level of education, proximity to the business ventures, and understanding of CSR concepts. The target group of the study will be mainly the business managers and other stakeholders including the locals or consumers. Since the study is majorly qualitative, the sample size will be determined through the saturation point (Kara 2015). However, the approximate number of the study can also be determined. The number of in-depth interview to be conducted will be approximately 30. The study will also entail approximately 10 focus group discussions. 4.0 DATA ANALYSIS The study will go through a qualitative data analysis. The data collected or recorded will be verbatim transcribed at the beginning of the analysis to help identify the main issues covered in the study. The data will there be coded into the main themes that appear in the transcripts. The coding will enable the development of common patterns and themes that appear on the specific items of the data. It will also illustrate on the deviation on the data and capture the interesting stories that emerge in the study. As a result, the study will be able to determine if the emerging findings correspond to other studies conducted or not. 5.0 EXPECTED RESOURCES 5.1 Budget Research Budget Budget items Number of items Cost per item (Ksh) Total cash cost (Ksh) In-kind cost (Ksh) Notes Bus Fare 90 days 200.00 18,000.00 - Public Means 3 month accommodation 3 12,000.00 36,000.00 - Rental House 90 days per diem 90 1,000.00 90,000.00 - Survival Research Assistant/ Programmer/ Data Analyst 1 25,000.00 25,000.00 - Data Analysis Focus Group Discussion Members 90 - - 9,000.00 Drinks Printing and Photocopying 400 10.00 4,000.00 - Questionnaires Photocopying and Binding of the Reports 4 1,000.00 4,000.00 - Reports for Submission to the Schools and Departments Miscellaneous - - 10,000.00 Precaution Sub-total 187,000.00 9,000.00 Total Kshs196,000.00 6.0 RESEARCH PROJECT PLAN No. Activities Time in Months Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sept 1. Proposal Development 2. Proposal Defense 3. Proposal Correction and Submission 4. Data Collection 5. Data Analysis 6. Report Writing and Submission Reference List Ali, I 2011, Influence of corporate social responsibility on development of corporate reputation and customer purchase intentions, Romanian Review of Social Sciences, vol. 1. Auerbach, CF & Silverstein, LB 2003, Qualitative data: An introduction to coding and analysis, New York University Press, New York. Baker, M 2008, Corporate social responsibility. Available from: < http://mallenbaker.net/article/clear-reflection/arguments-against-corporate-social- responsibility-and-some-responses >. [29 Oct 2016]. Bichta, C 2003, ‘Corporate social responsibility: a role in government policy and regulation?’. Retrieved from: < http://www.bath.ac.uk/management/cri/pubpdf/Research_Reports/16_Bichta.pdf >. [30 Oct 2016]. 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