Corporate Social Responsibility

Corporate social responsibility has become quite accessible and attractive among companies and multinational corporations standing at the protection of the interests and needs of their stakeholders. However, the academic world still has not elaborated exact definition and notion of the corporate social responsibility. In this respect, the idea of the corporate social responsibility is too vague and unclear so that businesses have to develop own approaches to the interpretation of the CSR. In the 21st century, that world is concerned with the strengthening of the human rights protection, improvement of the labour rights mechanisms, achievement of the fair trade. All these dimensions are critical to consumers and other stakeholders of the company so that business units adjust their business strategies in a manner to cope with environmental challenges and other social problems. This paper will consider the scope of the corporate social responsibility, its application and realisation, motivations of the companies to perform CSR and ideal business practices to the implementation of the CSR. This paper should reveal in what manner any company may achieve the status of the socially responsible organisation.

Research Questions and Objectives

Investigation of the nature of the corporate social responsibility will be considered through the pursuit of the following research questions and objectives:

ü What is the definition of the corporate social responsibility?

ü Where does the CSR take roots and how it has evolved over the last few decades?

ü What elements are included in the CSR?

ü What is the meaning of the CSR for the company and its staff according to the results of the interview session?

ü What barriers arise before implementation of the CSR?

ü What projects represent the common practice of CSR strategy?

Processing primary and secondary data will assist with responding to the research questions. Depending on research questions, this paper should address the following research objectives:

ü To define scope and extent of the CSR for business development and growth of the company;

ü To measure the effect of the CSR on the performance of the company and its interaction with stakeholders;

ü To define trends in the future development of the CSR;

ü To identify barriers arising during implementation of the CSR;

ü To consider examples of the CSR adopted by the company in question and other organisations famous for its CSR strategies.

Literature Review

The notion of the CSR

Over the last few years, the amount of studies focused on the idea and elements of the CSR has steadily risen (Burrows 2000, p. 602). Investigation of the corporate social responsibility has become popular among global companies that are always looking for growth and a better reputation. The significant portion of studies is devoted to the notion of the corporate social responsibility as there is no legal document establishing the scope of this definition. According to Hopkins (2004), CSR is a process that is referred to the protection of the needs and interests of the stakeholders of any company or institution ethically and responsibly (Hopkins 2004, p. 22). In this case, ethical and responsible approach implies that stakeholders are treated in compliance with international norms. With that, he notes that CSR forces companies to approach to the sustainable development in different communities, where interests and rights of the multi-stakeholders are pursued. With that, one should be aware that various researchers have already interpreted the definition of the CSR to provide companies with specific framework relevant to the creation of any business strategy covering CSR. Hence, Carroll (2016) stated that any social responsibility of the business units extends to different dimensions including ethical, economic, legal and discretionary expectations that society identifies within a particular timeframe (Carroll 2016, p. 22). In the meantime, the EU definition of the CSR differs from Carroll’s model. According to EU model, CSR implies any activity of the companies of social and environmental character affecting business operations of the organisation and its communication with the customers on the voluntary basis. Besides, the World Business Council for Sustainable Development prepared own definition of the CSR where it takes the form of the continuing commitment of business units to approach stakeholders ethically (Kolk 2016, p. 27). Also, this definition covers potential contribution to the economic growth and development of the community by improvement of the quality of life of the society. The amount of definitions of CSR is not surprising as the concepts of the CSR vary according to the needs and preferences of the community. The academic world is rich for definitions of the CSR; there is no unity on the definition.

The roots of the CSR

With the development of the industrialisation, the evolution of the CSR is observed. The rise of business practices forces companies to take an ethical approach to the protection of the needs and interests of its consumers and partners. In 1998 Shell became the first company implementing CSR (Chandan 2011, p. 140). Moreover, it is important to mention that since 1990s CSR became a business standard for companies like KMPG, PwC. These companies developed an understanding of other companies regarding the implementation of the CSR, its elements and framework. According to scholars, approaching CSR formation should have a form of a detailed plan requiring efforts of all departments of the company. Implementation framework covers the following elements:

ü When? (CSR concept)

ü What? (Task goals)

ü How? (checkpoints)

With that, a company should develop CSR strategy and implement important commitments to be capable of enjoying benefits of the CSR. Regardless the fact that issue of the CSR implementation attracts more attention from day to day, there are still thousands of companies that stay behind this strategy. Scholars define that reason of complete disregard towards CSR lies in the limited understanding of the benefits of the CSR by the managers of the companies (Trong Tuan 2012, p. 549). Therefore, the positive impact of CSR should be presented to the companies and their consumers in order the latest assist to the business units with the popularisation of the projects created for allocation of the social benefits (Ott 2017, p. 49). The purpose of the CSR

Several scholars point out that the principal objective of the social responsibility of the business is to increase profitability (Orlitzky 2015, p. 12). At the same time, Friedman (2005) stands to the point that the global companies cannot be aware of the social problems or environmental challenges that arise before customers. Hence, this point reflects an idea that the business sector is not capable of satisfying broad "public interest". With that, he claims that the global companies have better positions to address needs of different social groups.

The Elements of the CSR

According to the results of Edelman's 2010 Good purpose Study, more than 50% of the respondents reported that they would give preference to the products of the company that takes care of social and environmental problems (Allen 2011, para. 6). The author of the article reports that there are some common elements of the active CSR:

Business – based objectives aimed at preservation of the social needs;

Evident transformation of the business value of the companies;

Quality and effective implementation;

The concentration of the capabilities;

Collaboration with different stakeholders (Allen 2011, para. 9).

The CSR in Healthcare Sector

Given the fact that this paper is focused on the corporate social responsibility of the pharmaceutical industry, the available studies about the performance of the companies in this industry are examined. According to Smith (2009), CSR of the pharmaceutical organisations is a sensitive topic (Smith 2009, p. 285). He asserts that implementing CSR strategy by healthcare company is always perceived as a trick with the welfare of the customers, while business is looking for increased revenues Smith 2009, p. 286). This assumption suggests that realisation of the CSR in the healthcare sector is a troublesome activity because any organisation should find a balance in the preservation of the objectives of the CSR and keep its reputation (Smith 2009, p. 287).

Research Method

This particular paper is performed with use of the primary and secondary data collection. Processing of the existing studies under literature assessment section involves secondary data collection. However, the selection of the information about the experience of the company Wuxi Apptec in the promotion of the CSR is performed with use of the primary data collection as interview sessions with the manager of the company. The current approach to the examination of the subject – a matter of the paper implies the application of the case study analysis where the phenomenon of the corporate social responsibility is considered about the practice of one business unit. While sampling of the paper is limited to one specific company, the same research approach may be used for evaluation of the CSR of any other organisation. The use of the primary data collection is used for the determination of the connection between theoretical and practical aspects of the corporate social responsibility. Responses of the manager of the company give insight as to the realisation of the CSR strategy developed out of the general observations of the scholars.

Discussion

Examination of the CSR out of primary and secondary data shows that the notion of the CSR will continue to expand. At the same time, the current developments in the community affect the daily transformation of the CSR. For the purposes of this paper, WuXi Apptec is subject to examination of its corporate social responsibility. The reason behind this selection is professional activity of the company that operates in pharmaceutical industry. According to the results of the literature review section, the CSR of the pharmaceutical company differs by objectives and implementation. The focus of the CSR of this company should be limited to the evaluation of the results of the implementation of this strategy, its effect on the performance and status of the organisation. The activity of the WuXi Apptec is examined through application of the strengths and weaknesses of the sustainable development theory of the CSR. The main benefit of this approach lies in the fact that it covers significant amount of objectives of global nature, while the most of the other theoretical approaches of CSR are limited to the consumers of the company. In turn, sustainable theory to the CSR is featured with some weaknesses as complexity of the implementation. Namely, the operation of the pharmaceutical business unit is complicated and it is hard to prove to the consumers that the company is truly interested to promote sustainable development.

Evaluation of the outcomes to the available literature shows that CSR is featured with inclusivity as it extends to crucial elements as governance, financial concerns, social contribution, sustainability. The potential development of the CSR will involve scalability as a watchword of the ethical elaboration of the business strategies of the companies where every organisation will responsibly have manufacture services. Results of the literature review assessment evidence that just a few decades ago countries were not aware of the notion "corporate social responsibility". Although, today companies compete with each other for the creation of the most effective social projects to show caring approach towards its customers, stakeholders.

Results

For this paper, the manager of one company was invited for interview sessions. The focus of the article is limited to the business performance of Wuxi Apptec as the activity of the pharmaceutical companies should differ from other businesses. One should understand that global pharmaceutical producer from the very beginning should treat its customers ethically by manufacturing quality products. With that, the academic world has never reported any pros and cons of the corporate social responsibility of pharmaceutical companies. Therefore, the interest for the examination of the CSR of Wuxi Apptec is spurred by the limited information about successful practices of the companies operating in this industry. In this respect, one should be aware that WuXi Apptec is a multinational producer of pharmaceutical items and medical devices that have a headquarter in China. The primary activity is limited today to the development of innovative mechanisms for production of the pharmaceutical products at reasonable price.

According to the results of the interview session, the implementation of the CSR strategy was initiated in 2000 since the little foundation of the organisation (Appendix 1). The manager of the company invited for interview shared personal view of the CSR strategy that is upheld in the business unit, while the same notion prevails in the discussion among scholars:

"the way in which the companies manage their corporate activities to accomplish the overall development of the society through economic, environmental and social issues. It is a commitment made by businesses to work ethically and contribute to all-round development…." (Appendix 1)

Given the fact that academic field is scarce for information about CSR in the pharmaceutical companies, the interviewee stated that it is quite different in purpose from other companies because it has other aims and objectives as follows:

“…to make all disease curable and all drugs doable…” (Appendix 1)

The manager of the WuXi Apptec shared his interpretation of the CSR practice that is aligned to the findings of the scholars considered in the literature review analysis (Orlitzky 2015, p. 13):

“…The objectives of the CSR are to assimilate the welfare of all the stakeholders of the business and to carry on the business' activities for their overall well-being….”

(Appendix 1)

From this statement, it is apparent that the definition of the CSR varies from company to company about the values of the organisation, its environment and objectives. Activities of the business will affect core purpose of the CSR strategy (Orlitzky 2015, p. 13). For example, Volkswagen Group will strive to improve the state of the environment because it causes harm to it by the production of the automobiles (Allen 2011, para. 9). In contrast, Google is an example of the company that has a diversified portfolio of CSR programs that uphold values of the organisation as well as enhance social issues that should be addressed by every company irrespective of its activity (Tran 2017, p. 10). The effectiveness of the CSR strategy of Google Inc. is confirmed by the fact that the manager invited for this interview session expressed this respect to the efforts of the managers of this company in the preservation of the social interests and needs (Appendix 1).

Considering effects of the CSR on the company, the position of the manager contradicts the assumption of the scholars (Allen 2011, para. 8). Namely, Interviewee explains that consequences of the CSR implementation are not material:

“…it does help us to build a better reputation, and it's a way to grow business in a global marketplace and to build trust with local governments, nongovernmental organisations and consumers, which provide our profit out of it. Also, it can help us to attract good employees who care about the reputation of the company…” (Appendix 1)

Moreover, according to the outcomes of the interview sessions, in some cases, it is costly for a company similar to WuXi Apptec to implement CSR, update it regularly and track results of the programs realisation (Appendix 1). Constant observation over the process and cost of the programs are regarded the main barriers to the promotion of the CSR strategy on a regular basis:

“…Many costs like time and resource, monitoring and auditing, low return on investment and no visible gain….” (Appendix 1)

The position of the Interviewee on the effects and barriers to the CSR correspond to the findings of the scholars discussed in the literature review section (Chandan 2011, p. 140). In the meantime, examination of the best practices of the companies in promotion of the CSR evidenced that pharmaceutical companies as WuXi Apptec rely on the same list of programs that are developed by the organisations working in other industries:

“…Donation, Improved local manufacturing, Infrastructure investment, Supply-chain support, Advocacy and policy, International employee placement program…” (Appendix 1)

The comparison of the programs is made out of the findings of the scholars (Chandan 2011, p. 141). Interview confirmed that the CSR activities should not be left behind by any business unit aiming to improve its position in the market. In fact, consumers gain more power from day to day, while their attitude to the business performance of the organisation may affect future growth or decline of the company (Allen 2011, para. 12). Of course, CSR becomes a useful instrument of communication between customers and managers of the companies. With the use of the CSR, business units gain an opportunity to analyse social issues of their customers and improve communication with them through the introduction of new social programs falling within the scope of the CSR strategy (Chandan 2011, p. 142).

Given results of the interview session, one should agree that manager of the pharmaceutical company WuXi Apptec has more than a basic understanding of the CSR. He is aware of the values of the company and their alignment to the CSR activities. Although, it is hard to conclude if this organisation is efficient enough in comparison to the experience of Coca-Cola, Unilever or any other global organisation that is a leader in the CSR activities. Evaluation of the CSR experience of WuXi Apptec is defined about its unique corporate and business performance which is valued as positive one. One should agree with the response of the manager that CSR programs are burdensome for them, but they take all measures to advance their implementation as they are deemed necessary for future collaboration with consumers and growth of the company.

The main reflections from the investigation of the CSR of WuXi Apptec performance and realisation show that peculiarities of the pharmaceutical companies with regard to the promotion of the interests of the consumers should be further investigated. The research findings to this research implies that recommendations for better promotion of the sustainable CSR on behalf of the pharmaceutical companies should be developed in reference to the needs and interests of the consumers. This research evidences that WuXi Apptec implements sustainable CSR since 2000, while there is still disbelief in the desire of the company to become close to its patients and improve their livelihood. Hence, future studies should show in what manner these perceptions should be tackled.

Conclusion

This particular study considered notion of the CSR codes, standards and guidelines. This examination has been achieved through the use of the primary and secondary research methods. It was concluded that CSR affects preferences of the employees, customers and stakeholders on their interactions with each other. With that, an overview of the secondary sources revealed that the path to the practical realisation of the CSR might be followed by other companies regardless specificity of the industry and size of the company. This paper reaffirms that the CSR strategy has become an integral element of the business practices of the organisations, while this tendency is expected to involve more companies. Also, processing results of the interview sessions discovered that all business units have leaders to follow as Unilever, Coca-Cola, Nike. In this respect, most of the companies are interested in following experience and practices of global corporations.

The analysis of the CSR strategy of the pharmaceutical company selected for the investigation revealed that targeted audience of the CSR practice of this business unit might be different from other commercial groups. Moreover, any CSR activity is biased with concerns of the customers that CSR program aims to return a profit for a company engaged in the healthcare industry. Hence, WuXi Apptec is an example of the pharmaceutical business unit that drivers realisation of the CSR policies regardless the fact that there is a high level of resistance and negative perceptions from the customers regarding these efforts.

Bibliography

Allen, F. (2011). The Five Elements of the Best CSR Programs. [online] Forbes.com. Available at: https://www.forbes.com/sites/csr/2011/04/26/the-five-elements-of-the-best-csr-programs/#1cceed2f4bd5 [Accessed 13 May 2018].

Burrows, B. (2000). The Planetary Bargain: Corporate Social Responsibility Comes of Age. Long Range Planning, 33(4), pp.602-605.

Carroll, A. (2016). Carroll’s pyramid of CSR: taking another look. International Journal of Corporate Social Responsibility, 1(1).

Chandan D N, C. (2011). Corporate Social Responsibility Practices In Indian Corporate World: A Study. Indian Journal of Applied Research, 1(3), pp.139-142.

Hopkins, M. (2004). Corporate Social Responsibility: An Issues Paper. SSRN Electronic Journal.

Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.

Orlitzky, M. (2015). The politics of corporate social responsibility or: why Milton Friedman has been right all along. Annals in Social Responsibility, 1(1), pp.5-29.

Ott, S. (2017). Corporate Social Responsibility and the Impact of Executive Compensation on Corporate Social Responsibility Performance. SSRN Electronic Journal.

Smith, A. (2009). Corporate social responsibility in the healthcare insurance industry: a cause-branding approach. International Journal of Electronic Healthcare, 5(3), p.284.

Tran, S. (2017). GOOGLE: a reflection of culture, leader, and management. International Journal of Corporate Social Responsibility, 2(1).

Trong Tuan, L. (2012). Corporate social responsibility, ethics, and corporate governance. Social Responsibility Journal, 8(4), pp.547-560.

Appendices

Appendix 1

Transcript of Interview

Interview Questions:

How long has your company been engaged in the promotion of the corporate social responsibility?

Could you be so kind to describe the notion of the CSR by your words?

What are main values of the CSR in your company?

Whether is CSR aligned with all corporate strategies and objectives of the company?

What are the objectives of the CSR?

Do you receive profit out of the CSR strategy of your company?

How do you think, if all staff comprehends the meaning of the CSR and contributes to its realization?

What are challenges and barriers arising before implementation of the CSR?

What projects do you have now in reference to the CSR?

What companies are considered the best practice in CSR implementation, in your opinion?

Responses:

How long has your company been engaged in the promotion of the corporate social responsibility?

We have been engaged in it since the company has been set up, which is 2000.

Could you be so kind to describe the notion of the CSR by your words?

The notion of CSR holds different connotations, depending on the organization that it is being applied to. At its most basic level, CSR can be defined as the way in which the companies manage their corporate activities so as to accomplish overall development of the society through economic, environmental and social issues. It is a commitment made by businesses to work ethically and contribute to all-round development.

What are main values of the CSR in your company?

As a pharmaceutical company, CRS is not only the motivation but also the basic standard of conduct. It drives us to work harder to achieve our goals one day: to make all disease curable and all drugs doable. In this process, it helps us keep the beginning of the heart.

Whether is CSR aligned with all corporate strategies and objectives of the company?

Yes, we always make sure that whatever strategies or objectives we make are aligned with CSR.

What are the objectives of the CSR?

The objectives of the CSR are to assimilate the welfare of all the stakeholders of the business and to carry on the business' activities for their overall well-being.

Do you receive profit out of the CSR strategy of your company?

In one way, it does help us to build a better reputation and it's a way to grow business in a globe marketplace and to build trust with local governments, nongovernmental organizations and consumers, which definitely provide us profit out of it. Also, it can help us to attract good employees who care about the reputation of the company

How do you think, if all staff comprehends the meaning of the CSR and contributes to its realization?

If an enterprise wants to survive and develop, it need to reply on both innovation and social responsibility. And if all staff comprehends the meaning of the CSR and contributes to its realization, I believe that we will definitely have a sustainable future

What are challenges and barriers arising before implementation of the CSR?

Many costs like time and resource, monitoring and auditing, low return on investment and no visible gain.

What projects do you have now in reference to the CSR?

ü Donation

ü Improved local manufacturing

ü Infrastructure investment

ü Supply-chain support

ü Advocacy and policy

ü International employee placement program

What companies are considered the best practice in CSR implementation, in your opinion?

Personally, I think Google is one of the best practice in CSR implementation, starting from 2015, Google issues environmental report that contains the details of Google CSR programs and initiatives. And we can see from it that Google has put a lot of efforts into CSR to humanize its workplace and make the world a better place.