Corporate Social Responsibility and Risk Management in Property Projects - Research Proposal Example

Corporate Social Responsibility and Risk Management in Property Projects Introduction This chapter presents a background of the study, rationale for the selected topic, a brief exploration of the principles of corporate social responsibility (CSR), the relationship between CSR and risk management (RM), aims and objectives, and an outline of the research methodology that will be employed in the study. Background Corporate social responsibility (CSR) is a way in which organisations integrate economic, social and environmental concerns into their decision making, culture, values, operations and strategy in an open and accountable approach and thus create wealth, establish improved practices and develop the society (Dunphy, Andrew & Suzanne 2003, p. 5). Grant (2009, p. 16) defines CSR as engagement in beneficial activities that do not have negative effects on the economic, social and natural environment surrounding businesses and individuals presently and in the future. As such, an organisation embracing CSR upholds three main principles, namely, economic sustainability, environmental sustainability and social sustainability. As Beth and Singh (2005, p. 12) point out, CSR principles enhance broad engagement of stakeholders in organisational activities and enhances the reputation of an organisation in the eyes of stakeholders. Importantly, embracing CSR principles enhances the ability of an organisation to effectively manage economic, legal, social, environmental and other types of risks. Precisely, CSR is related to RM by providing intelligence about the potential risks and by offering an effective means for responding to these risks (Smith 2010, p. 20). As Walesh (2000, p. 135) explains, RM is part of project management carried out within organisations. Project management is the application of techniques, knowledge, skills and tools to a range of activities that constitute a project with a central aim of meeting or exceeding the expectations and requirements of the stakeholders. According to Walesh (2000, p. 135), in order to meet or exceed the requirements or expectations of stakeholders, project management has to keep a balance between the time, resources, quality and scope of the project in question. These elements interact with each other in a way that makes each intended process to give a desired outcome unique. The unique process leading to a desired outcome is called a project. Sometimes, these elements interact to form systems or projects that are complex and dynamic within organisations. To achieve successful outcomes in such projects, organisations select project managers to deal with specific issues such as risks, human resources, finance, communication and technical issues. Dominelli's (2011, p. 432) explains that all risk management activities carried out at top management level of a project should make consideration of interests of external and internal stakeholders. Organisational stakeholders who are interested in the performance of organisational projects include shareholders, customers, suppliers, employees, communities, governments, international organisations, non-governmental organisations and others affected by a firm’s activities. By giving consideration to the interests of the stakeholders, the top management would ensure that a project attains success and is secure from adversity that would occur as a result of ignoring their contribution (Lawrence 1998, p. 232). Therefore, CSR principles are relevant to RM in property projects. Rationale for the Topic Numerous scholars have paid attention the connection that exists between CSR and RM in organisations. However, there is limited literature focusing on the relevance of the connection between CSR and RM in projects. Risk in project management implies the possibility of harm arising from an activity or the possibility that a project might not progress in the future. As Edwards and Bowen (2005) explain, there has been an increasing need to establish the potential risks that are related to projects in order to find ways to mitigate or avoid them. According to Bourne (2007, p. 2), the success of a project relies on three pillars, namely, management of uncertainty, maintenance of project relationships, and delivery of value. To achieve success, there is need for alignment of the performance metrics and management of the project with the perceived needs of the stakeholders. Alternatively, this step may encompass negotiation within the established connections in order to align the perceived needs with the feasible results of the project. As Bourne (2007, p. 4) elucidates, the three elements have to be combined for a project to be successful as indicated in figure 1. Figure 1: A balanced view of success: the pillars of project success Source: Bourne (2007, p. 4) Given that CSR helps to alleviate risks at an organisational level, it also possible that CSR can help to mitigate risks at a project level. To investigate this issue, this proposed study will focus on the relevance of the connection between CSR and RM in property project. Indicative Literature CSR principles Economic sustainability implies the application of various organisational strategies that lead to utilisation of available resources to the best advantage of an organisation, all stakeholders and the natural environment (Wells 2010, p. 67). Overfishing for instance is an activity that cannot be regarded as being economically sustainable. Thus, economic sustainability refers to the use of resources in the most efficient responsible way in order to ensure long-term benefits. Environmental sustainability implies the movement towards the use of renewable rather than non-renewable resources and the minimisation or elimination of polluting and hazardous wastes (Wells 2010, p. 67). Recycling of waste products that pollute the environment such as plastic paper bags is an activity that is sustainable in the long-term. Social sustainability on the other hand refers to improving and promoting the quality of life for all. By respecting ethical principles while dealing with human beings and working towards economic and environmental sustainability, an organisation is already working towards social sustainability (Wells 2010, p. 67). Relationship between CSR principles and RM An organisation embracing the principles of CSR generates investor confidence, attracts funding and escapes from risks associated with financing. As Smith (2010, p. 21) explains, CSR principles focus on increasing profitability and enhancing efficiency in an organisation. This helps to create wealth and other benefits for shareholders. The level of accountability, probity and transparency that an organisation has influences investors and potential investors to accept the organisation as a caring, honest and legitimate wealth creating organ. This helps to improve organisational reputation, image and market standing (Grant 2009, p. 76). The same helps to reassure investors that their resources will be secure and managed well to create wealth for them. Therefore, an organisation embracing CSR is able to attract financial support and to protect itself from potential financial risks. In the same vein, it is also vital for people involved in project management to consider the perception of the stakeholders as regards the value of a given project. On the contrary, failure to embrace CSR principles makes an organisation vulnerable to financial distress or financial risks in the future. Van Frederikslust, Ang and Sudarsanam (2008, p. 75) note that failure to embrace CSR principles may lead to risky financing patterns, poor organisational performance and increased exposure to non-conducive macroeconomic crises. This leads to loss of investor confidence and inability to attract sufficient funding. Without sufficient funding, an organisation is exposed to the risk of liquidation (Wells 2010, p. 59). Generally, this applies to both organisations and projects that are undertaken within organisations. Therefore, CSR is crucial to the performance of a project. Aims and Objectives of the Study The main aim of the proposed study is to establish the relevance of CSR in RM in property projects The specific objectives of the study are To determine the relationship between CSR and RM To determine the effects of CSR engagement on the reactions of stakeholders To determine the effects of CSR on projects performance To determine the relevance of the relationship between CSR and RM in property projects Research Methodology Research methodology refers to the way and method in which a study is done and takes in all the procedures used to conduct research in the fields of social and natural sciences (Creswell 2003, p. 42). In the proposed research, the researcher aims to adopt an exploratory research design and qualitative methods of data collection and analysis. The research will rely on conceptualisation and empirical stages respectively. In the course of the first stage, sources of literature pertinent to the topic of study will be reviewed and the tools of collecting data, in particular interview schedules, created. During the subsequent phase, data will be collected from the targeted participants and then analysed in accordance with content validity and with reference to the set objectives of the research. The study will employ both secondary and primary information. Secondary data will be gathered by exploring books and journals available in the school and online databases related to the relevance of the connection between CSR and RM in property management. Primary data will be collected through questionnaires which will be sent to directors or managers of the selected property projects in various firms. The researcher will use open-ended questions to obtain extensive information from the respondents. The researcher projects that a questionnaire will be the best data collection method for the study since it will enable him/her to collect large amounts of information in a short duration and on a restricted budget. The questions in the questionnaire will be made short in order to encourage participation of the participants and to obtain more precise responses. Conclusion This chapter has discussed the relationship between CSR activities and risk management in regard to property projects. It is apparent that CSR contributes significantly to risk management; hence CSR is a critical undertaking with respect to risk management. CSR implies the way in which organisations integrate economic, social and environmental considerations in their day-to-day operations to ensure accountability and concern for the society even as they aim to make profit. Organisations that incorporate CSR in their affairs are perceived favourably in terms of RM since CSR helps to improve efficiency. In regard to the success of any property project, the critical success factors of any project have been identified as managing relationships, managing risk and delivering value. This can be guaranteed through CSR, which increases investor confidence, attracts funding and also enables a project to stay away from potential risks or to manage any risks reliably. The chapter has also presented an overview of the aims and objectives that will pursued during the study as well as the methodology that will be employed. References Beth, K & Singh, P 2005, ‘Corporate Social responsibility as risk management: A model for multinationals’, Social Responsibility Initiative Working Paper No. 10. John F. Kennedy School of Government, Cambridge. Bourne, L 2007, ‘Avoiding the successful failure’, Paper presented during the PMT Global Asia pacific Conference, 2007 at the Hong Kong Convention and Exhibition Centre, 29-31 January 2007. Creswell, J W 2003, Research design: Qualitative, quantitative, and mixed methods approaches, Sage Publications, London. Dominelli’s, L 2011, ‘Climate change: Social workers’ roles and contributions to policy debates and interventions,’ International Journal of Social Welfare. Vol. 20, Iss. 4, pp. 430–438. Dunphy, D C & Andrew, G & Suzanne, B 2003, ‘The sustaining corporation’ In Dunphy, D C & Andrew, G & Suzanne, B (eds), Organizational change for corporate sustainability: A guide for leaders and change agents of the future, Routledge, London. Edwards, P & Bowen, P 2005, Risk management in project organisations, Butterworth Heinemann, Burlington. Grant, J 2009, The green marketing manifesto, John Wiley & Sons, London Lawrence, G W 1998, ‘Management development...some ideals, images and realties’, In Colman, A D & Geller, M H (eds.) Group relations reader 2, A. K. Rice Institute Series, pp. 231-241. Smith, H 2010, ‘Corporate Governance: Status Report,’ viewed May 29 2013, Van Frederikslust, R A I, Ang, J S & Sudarsanam, P S 2008, Corporate governance and corporate finance: A European perspective, Taylor & Francis, London. Walesh, S G 2000, Engineering your future: The non-technical side of professional practice in engineering and other technical fields: Project management, ASCE Publications, New York. Wells, G 2010, Sustainability in Australian business: Fundamental principles and practice, John Wiley & Sons Australia Limited, Sydney. Read More