CSR Theory

Question 1

Define CSR

Answer 1

Aguinis (2011) defines CSR as context-specific organisational actions and policies that consider stakeholders’ expectations and the triple bottom line

Question 2

What are some of the key drivers of CSR practices?

Answer 2

1. Social / cultural expectations (e.g. gen-z willing to spend 10% more on sustainable products, Firstinsight, 2020)
2. Bottom-line benefits (McKinsey, 2014)
3. Global legislation and policy (UK plastic bag scheme, 2015)
4. Employee retention and hiring (e.g. Spotify’s culture)

Question 3

How can CSR influence business strategy?

Answer 3

• Business model (e.g. circular economy)
• Capital raising strategies
• Employee hiring strategy

Question 4

What are the two main views on CSR?

Answer 4

1. Classical View (Friedmanism, 1970): The sole responsibility of a business is to increase its profits.
2. Socio-economic View: Businesses should protect and improve society’s welfare and become involved in social, legal, and political issues. Carroll’s Pyramid (1979) / philanthropic responsibilities.

Question 5

What are some of the criticisms of CSR?

Answer 5

1. There’s no clear evidence that acting more responsibly makes firms more profitable.
2. Hard to convince firms to behave more responsibly due to this unclear link to bottom line (Vogel, 2007).