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Corporate Social Responsibility: Contrasting Views and the Road Ahead

Despite the growing interest in corporate social responsibility (CSR) across the globe, literature in this area in the Nepalese context is very scant. Thus, first, this article attempts to uncover the contrasting views on CSR emerged over the last
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   " Corporate Social Responsibility: Contrasting Views and the Road Ahead  Bal Ram Chapagain *   Abstract Despite the growing interest in corporate social responsibility (CSR) across the globe, literature in this area in the Nepalese context is very scant. Thus, first, this article attempts to uncover the contrasting views on CSR emerged over the last one century in the global context and then traces out the Nepalese context. Finally, the road ahed is discussed. It finds that the views on CSR are quite convergent yet stakeholder approach to CSR is probably the most widely held. But, in the  Nepalese context there are lots of confusions, misconceptions, narrow interpretations and also some attitue-behavior gap. Therefore, it is high time for all to embrace CSR strategically so that a win-win situation between business and society is created.  Keywords : Corporate social responsibility, stakeholders, Nepalese context Background It is well acknowledged that business and society are interdependent and as such corporate social responsibility (CSR) has become an important issue among business community and academics in recent years. Despite the growing interest in CSR across the globe, research and discussions in this area is very scant in Nepalese context. Consequently, we can see lots of confusions, narrow interpretations and even misconceptions about CSR in Nepal. Against this backdrop, this article aims at contributing the much-needed insight into CSR in Nepal by discussing the contrasting views on CSR and the road ahead. Contrasting Views on CSR The idea of CSR is hardly new. The core principle that the business has responsibilities to society  beyond profit maximization objective has long historical roots. However, we see quite contrasting (and sometimes even opposite) views on CSR if we trace the history of the last one century. !  #$% &'()(*(+, -#% .'+/%0 .'1 23'4/($5 +6 (,  !""#$ &'()*""('  (7 &8,7$(/ 18)($798,7 4: #(,(*898,70 ;$+<'=>(, ?,+>8$6+7@0 A8)(/% B8 9(@ <8 $8(3'8C (7 <(/$(9%3'()(*(+,D*9(+/%349% 2=**8678C &+7(7+4,E &'()(*(+,0 F% G% -HIJK5% &4$)4$(78 643+(/ $86)4,6+<+/+7@E &4,7$(67+,* >+8L6 (,C 7'8 $4(C ('8(C% +,* -*./0*"* 1/2/3*4*2# 5*67*8  0 9: -J50 JMNOJPH%   # In 1917, Henry Ford stood in a Michigan court defending his decision to reinvest the surplus on expanding the business, creating employment opportunies and sending more cars in the market so that more people can use it Ð so as to promote social goal Ð rather than simply making short-term  profits and distributing surplus among shareholders (Lewis, 1976). Thirty six years later, in 1953, Howard Bowen for the first time proposed a structured, comprehensive and insightful definition of CSR (referred to as Ôsocial responsibilities of businessmanÕ at that time Ð as there was almost no separation between ownership and management at that time) as: ÒSocial responsibility refers 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 societies (Bowen, 1953: 6). In 1962, Milton Friedman in a way opposed the idea of CSR on the grounds that it imposes an unfair and costly burden on shareholders (Friedman, 1962). He further added: ÒThere is one and only one social responsibility of business Ð to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraudÓ (Friedman, 1970: 126). But, today most of the scholars and business people have come to realize that business is a social entity and thus it has to go beyond economic, legal and even ethical responsibilities. To Hopkins (2007), ÒCSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner. ÔEthically or responsibleÕ means treating stakeholders in a manner deemed acceptable in civilized societies....The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of corporation, for peoples both within and outside the corporationÓ (p. 15). Many scholars and practitioners have now tried to reframe the debate by  putting forward the idea that business concerns towards different stakeholders (both internal and external) including social and environmental issues should be taken as an opportunity to create shared value for both business & society as opposed to the traditional belief of financial burden to  business or even simply a moral duty. The Nepalese Context In the Nepalese context, interest in CSR is increasing tremendously particularly during the recent years. Despite the growing interest in CSR there are still lots of confusions, narrow interpretations   $ and even misconceptions. There is lack of holistic understanding of CSR among entrepreneurs, managers, practitioners, academicians and the general public. Some people believe that contributing to social causes or charity is synonymous to CSR. Some other people think that maximizing profit without deception or fraud; creating employment opportunities; and paying taxes to the government honestely are the main responsibilities of business. They argue that fulfilling the varied needs of society is the duty of government; not of private businesses. Some people disagree with both the above stated notions of CSR and assert that following the governance guidelines should be the focus of CSR particularly the country context like Nepal. Some consider it as an integral aspect of  business strategy and operations (such as making responsible business philosophy & doing everything accordingly) while others regard it as the activities isolated from core business operations (such as philanthropic activities). Some people are even confused whether CSR is relevant before or after profit. Moreover, we see some Ôattitude-behavior gapÕ in the Nepalese context. The actual business  practices are not as greener as the views of managers or entrepreneurs in one hand and consumersÕ actual purchase decisions are also rarely affected by ethical concerns on the other. Government and  policy makers are also not serious enough to promote CSR in Nepal. Then Secretary  of Ministry of Industry, in a TV show, clearly admits that there is no specific law governing CSR in Nepal and even if there are some provisions, they are scattered across different policies, laws and acts (Sajha Sawal, 2011). The Road Ahead With increasing influence of industrialization and globalization, the business world is becoming more visible as well as relevant in society (Chatterji, 2011). Thus, CSR agenda would become an integral aspect of corporate strategy. The environmental sustainability, community development, social entrepreneurship, social inclusion, public-private partnership, poverty alleviation, governance, ethics, transparency and accountability are expected to be the dominant CSR agenda in future (Strandberg, 2002; Blowfield & Murray, 2008). However, priority issues and specific CSR activities across companies will vary significantly  because of the differences in firm sizes, politico-government systems in which companies operate, economic development stage of the particular country or community, geo-political events & transitions, societal value systems and environmental & natural forces (Frederick, 2008).   % Reliance on CSR codes, standards and guidelines will be seen necessary but insufficient way to  practice CSR. Instead, companies will be judged on how innovative they are to tackle social and environmental problems (Visser, 2012). Nevertheless, there would be one thing in common, that is, the guiding principles would be devised aimed at creating a win-win situation between business and society. Conclusion Despite the debates and disagreements about the meaning and essence of CSR, there are certain elements which are relatively widely accepted. CSR is mainly concerned with doing business in responsible manner...whatever it takes. More specifically, it is the obligation of business to protect and promote the prudent interests of different stakeholders including the business itself, take care of the environment, and uplift the society at large. Some aspects of CSR are mandatory such as economic, legal and ethichal responsibilities. Some aspects of CSR are voluntary in nature such as  philanthropic activities. But, if some business contributes to philanthropic activities in the expense of the legitimate expectations of other stakeholders, such as employees and customers, it cannot be regarded as true or honest CSR. Likewise, CSR can be aligned with core business strategy or can be kept isolated from core  business strategy and operations. But, it is always better to align CSR activities with business strategy & operations in order to create shared value to business & society and ensure sustainability. CSR is relevant for businesses from the time of its inception. It is relevant for all businesses regardless of their types, sizes, financial performance and so forth. However, the nature of and approach to CSR may vary across country contexts, business types, sizes, fianancial performance and so on. Therefore, the road ahead is to embrace CSR but only by knowing their implications to  business and society. Otherwise, such efforts may not be sustainable, may fail to create shared value to business & society, and may lead to the misalignment of valuable corporate resources. Thus, all stakeholders particularly the business itself, should focus on inventing options for mutual gain rather on sharing a fixed pie. All concerned Ð business, society and the government in particular Ð must must internalize the fact that Òthere can be no successful business without successful society and there can be no successful society without successful businessÓ (NBI Brochure, p. 2).   & References Blowfield, M., & Murray, A. (2008). Corporate responsibility: A critical introduction . NY: Oxford University Press. Bowen, H. R. (1953). Social responsibilities of businessman . New York: Harper & Row. Chatterji, M. (2011). Corporate social responsibility . Delhi: Oxford University Press. Frederick, W. C. (2008). Corporate social responsibility: Deep roots, flourishing growth, promising future. In A. Crane, A. McWilliams, D. Matten, J. Moon & D. S. Siegel (Eds.), The oxford handbook of corporate social responsibility  (pp. 47-82). NY: Oxford University Press. Friedman, M. (1962). Capitalism and freedom . Chicago: University of Chicago Press. Friedman, M. (1970, September 13). A Friedman doctrine: The social responsibility of business is to increase its profits. The New York Times Magazine , p. 126. Hopkins, M. (2007). Corporate social responsibility & international development: Is business the  solution ? London: Earthscan. Lewis, D.L. (1976). The public image of Henry Ford: An American folk hero and his company . Detroit: Wayne State University Press.  National Business Initiative (n.d.). NBI Brochure. Retrieved from Sajha Sawal (2011, February 27). Corporate Social Responsibility  [Television broadcast]. Kathmandu, Nepal: Kantipur Television. Strandberg, C. (2002). The future of corporate social responsibility . Retrieved from Visser, W. (2012). Future trends in CSR: The next 10 years. CSR international inspiration series ,  No. 11. Retrieved from /inspiration_csr_trends_wvisser.pdf
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