CSR- How it affects Organizations image

Research Project I

Fariha Rizwan (14)

Mahveen Sadiq (73)
Marium Hafeez (29)
Sanodia Alam (55)

Under the Supervision of

Maam Tehmina
Department of Public Administration
University of Karachi
Fall semester 2014

ABSTRACT
It is the matter of fact that with new changes in environment and technology, organizations are
striving hard to satisfy their positive image to their consumers. This study is conducted to know
that how Corporate Social Responsibility is affecting the organizations image. Corporate Social
Responsibility is preferably essential aspect for the organization to create positive image to the
company through affecting its Public Relation activities. This study is based on qualitative data
gathering techniques, in which different case studies, questionnaires, observation and interviews
are being used to collect responses from affiliated authorities of organization that how Corporate
Social Responsibility brings positive image and in what ways it benefits the organizations. This
study concludes that the CSR activities have played a vital role in improving the performance of
the organization.

ii

DEDICATION
This Research Project is lovingly dedicated to our beloved country Pakistan, the Department of
Public Administration and our Course Incharge Maam Tehmina who has been our constant
source of inspiration and our team efforts for the drive and discipline to tackle any task with
enthusiasm and determination. Without their support this project would not have been made
possible.

iii

ACKNOWLEDGEMENT
We would acknowledge the contribution of our course instructor Maam Tehmina, whose
encouragement, guidance and support from the initial to the final level which enabled us to
develop an understanding of the subject. And lastly, we offer our regards to all of those who
have helped and supported us the completion of the project.

iv

CONTENTS

ABSTRACT ........................................................................................................................ ii
DEDICATION ................................................................................................................... iii
ACKNOWLEDGEMENT ................................................................................................. iv
CHAPTER ONE ................................................................Error! Bookmark not defined.
INTRODUCTION .............................................................Error! Bookmark not defined.
1.1

Background of the Study ...................................................................................... 1

1.2

Statement of the Problem ..................................................................................... 1

1.3

Justification .......................................................................................................... 1

1.4

Purpose of the study ............................................................................................. 2

1.5

Specific Purpose ................................................................................................... 2

1.6

Basic Assumptions ............................................................................................... 2

1.7

Definition of Key Terms ...................................................................................... 2

1.8

Limitations ........................................................................................................... 2

1.9

Scope .................................................................................................................... 3
v

1.10

Hypothesis ........................................................................................................ 3

CHAPTER TWO ................................................................................................................ 4

LITERATURE REVIEW ................................................................................................... 4
2

Literature Review........................................................................................................ 5

CHAPTER THREE .......................................................................................................... 22

THEORETICAL ANALYSIS .......................................................................................... 22
CHAPTER THREE .......................................................................................................... 29
RESEARCH METHODOLOGY...................................................................................... 29
CHAPTER FOUR ............................................................................................................. 33
DATA ANALYSIS ........................................................................................................... 33
CHAPTER FIVE .............................................................................................................. 40
SUMMARY, FINDING, CONCLUSION, RECOMMENDATION ............................... 45

vi

CHAPTER 1 - INTRODUCTION
1.1

Background of the Study

Nowadays organizations use different techniques to improve their organizations

performance. One of the practices in Public Relation is Corporate Social
Responsibility. In Corporate Social Responsibility, organizations more focus on the
sense of responsibility towards the community and environment. Organizations more
invest on improving their better image towards their consumers and express their
citizenship. Organization undergo waste and pollution reduction programs and
activities, educational and social programs like seminars, training sessions, workshops
and scholarship programs, youth development programs to ensure their corporate
image and earning adequate returns on the employed resources. The big firms and
Multinational Corporations adopt these responsibilities to penetrate in the social
environment and gain maximum customers attention towards their branding. So, this
study will show how the Corporate Social Responsibility will benefit the
Organization.
1.2

Statement of the Problem

Organizations focus on the Corporate Social Responsibility to improve their image.

Organizations are investing more and more on this department. So, it is necessary to
identify the affect of corporate social activities on Organization.
1.3

Justification

In Pakistan, it is in the recent times that CSR is coming into the mainstream of
business applications and in academia. Organizations consider the interests of society
by taking responsibility for the impact of their activities on customers, suppliers,
employees, shareholders, communities and other stakeholders, as well as the
environment. Although corporate philanthropy is yet in initial stages (largely confined
to legal compliance), some companies have now started to use their CSR related
activities for their corporate branding as well. Thats why companies are focusing
more on CSR activities to ensure that they are environment friendly and socially
responsible as a whole.
1

1.4

Purpose of the study

The general purpose of study is to explore the effect of corporate social

Responsibilities and activities on organization.
1.5

Specific Purpose

To explore the benefits of CSR in organizations.

1.6

Basic Assumptions

Different companies undergo waste and pollution reduction programs and activities,
to ensure their corporate image and earning adequate returns and gain benefits on the
employed resources. It is costly but it has an impact on organizations better image
and gives positive results as well.
1.7

Definition of Key Terms

Corporate Social Responsibility: Corporate social responsibility (CSR) also known

as corporate responsibility, corporate citizenship, responsible business and corporate
social opportunity, is a key concept whereby organizations consider the interests of
society by taking responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities and other stakeholders, as well as
the environment.1Nicole Fallon emphasized that, CSR has been exposed as an
effective management tool to strengthen the organizations performance through a
better image in stakeholder's mind and also because of their responsible behavior
toward society and environment.2
1.8

Limitations

Time frame

Approach of CSR

https://www.scribd.com/doc/34569551/Role-of-Corporate-Social-Responsibility-in-Pakistan-Telecom-Industry

http://www.palgrave-journals.com/dbm/journal/v19/n4/full/dbm201219a.html#bib1

1.9

Scope

CSR should not be viewed as a drain on resources, because carefully implemented

CSR policies can help the organization in many ways that would be guided by this
research paper. Since in Pakistan, many organizations are not paying attention
towards CSR activities. Therefore, by knowing the benefits of CSR, more
organizations would start working on it.
So, this study will help us to see that how corporate social activity serves as a blessing
on companys better image and ensure development of organization productivity and
employee motivation.
1.10 Hypothesis
H1: Corporate social responsibility will have positive effects on organization.
Ho: Corporate social responsibility will benefit the organization.

CHAPTER TWO
LITERATURE REVIEW

Literature Review

Douglas and Emily in 2011 emphasized that business environment has changed
significantly3. To survive in this dynamic business environment, businesses have been
forced to adapt various strategies for corporate social responsibility (CSR) into their
business models. The issue of corporate social responsibility (CSR) has been debated
since the 1950s. An analysis by Secchi (2007) and Lee (2008) reported that the
definition of CSR has been changing in meaning and practice.4 Asemah, Edegoh and
Anatsui5 in 2013 stated that corporate social responsibility is one of the management
strategies where companies try to create a positive impact on society, while doing
business.). Nolan, Norton and Co (2009), cited in Ali, Rehman, Yilmaz, Nazir and Ali
(2010)

note that corporate social responsibility is an approach whereby a company

considers the interests of all stakeholders, both within the organization and in society
and applies those interests while developing its strategy and during execution. Bendell
in 2005 argues that, there is no single definite definition of what CSR is, as various
organizations define this concept in different ways. Philip Kotler and Nancy Lee
wrote in their book in 2008 Corporate Social Responsibility: Doing The Most Good
for Your Company and Your Cause says that as an initiative from corporate world is
crucial aspect which needs to be undertaken by a business to support social grounds
and to complete obligations with respect to CSR. Social causes like prevention of
AIDS, safety, eradicating illiteracy, developing socially and economically,
employment and environmental issues are some of the issues that are pulling the
worlds development. Authors have included important elements that are to be made
mandatory by law in order to save society from the economic and environmental
issues.7 The book is intended to help maximize the impact on corporate investments to
do the most social, environmental, and economic good. A theoretical perspective is
presented along with personal accounts of companies. The book contains proven
recommendations and real-world advice on social initiatives. Socially responsible
3

http://www.writemypapers.org/examples-and-samples/literature-review-on-social-corporate-responsibility.html

Lee, M. P. (2008). Review of the theories of corporate social responsibility: Its evolutionary path and the road
ahead. International Journal of Management Reviews, 10,1, 53-73.
5
Asemah, E.S., Edegoh, L.O.N and Anatsui, C. (2012). Corporate social responsibility and community relations as
critical factors in conflict management. Maiduguri Journal of Arts and Social Sciences. Vol. 10 (1), Pp. 47-55
6
Ali, I., Rehman, K.U., Yilmaz, A.K., Nazir, S and Ali, J.F. (2010). Effects of corporate social responsibility on
consumer retention in cellular industry of Pakistan, African Journal of Business Management. Vol. 4(4), Pp. 475485.
7
http://www.ukessays.com/dissertation/literature-review/literature-on-corporate-social-responsibility-at-tesco.php

companies such as Ben & Jerrys, IBM, Washington Mutual, Johnson & Johnson,
Microsoft, The Body Shop, Hewlett-Packard, and American Express are featured. The
final chapter of the book presents ten recommended strategies for success. It is written
for executives, administrators, and program managers of NGOs and public-sector
agencies who are seeking contributions from corporations for developing and
implementing initiatives intended to support a social cause.
Wood & Jones (1995) had said earlier that although some theoretical models of
Corporate Social Performance explicitly included employees as a factor of for
analysis of the outcomes, only few studies have investigated CSR's influence on
employees' attitudes and behavior. The question of whether CSR driven attitudes and
behaviors can affect employees' organizational performance, and ultimately corporate
financial performance, has rarely been investigated.
Nan X. & Heo K. (2007) justified consumer responses to corporate social
responsibility (CSR) initiatives at American Academy of Advertising. The study
presented in this article seeks to demonstrate, through a controlled experiment, that an
ad with an embedded cause-related marketing (CRM) message, compared to a similar
one without, generates more favorable consumer attitudes toward the company. One
of the prominent questions in this study is What are the relative effects of different
types of CRM? Two hypotheses involving exposure is an advertising message with
a CRM component (versus one without) were examined i.e. involving high
brand/cause fit and the other one is Involving low brand/cause fit, as related to The
ad, The brand and The company. Also, a third hypothesis examined two brands both
engaged in CRM, positing that the one with a high level of fit with the social cause
should be viewed more favorably than the one that has a low level of fit. Generally,
the results reflected that ads with CRM messages do elicit more favorable consumer
responses, primarily toward the company as opposed to the brand, when compared to
those without CRM messages. In addition, it was revealed that the relative effects of
different types of CRM showed no systematic effects of brand/cause fit on consumer
responses.8
Aneel Karnani from Stephen M. Ross School of Business, University of Michigan
wrote in his research article that for CSR to move beyond empty platitudes, it is
8

http://www.ccl.org/leadership/pdf/research/CorporateSocialResponsibility.pdf

necessary to clearly distinguish between socially desirable activities that are profitable
and those that are unprofitable for the firm involved. Much of the contemporary
literature on CSR emphasizes its positive links to profitability. The business case for
CSR states that as companies behave more responsibly, they also become more
profitable.9 David Crowther&Guller Aras in his book Corporate Social Responsibility
defined the term CSR as the relationship between global corporations, government of
countries and individual citizens and resides where it operates. 10
Moir (2001) says that CSR is continuing commitment to behave ethically and
contribute to economic development while improving the quality of life of the
workforce and their families as well as the local communities and society at large.
Pearce and Robinson emphasized that CSR is an idea that business has a duty to serve
society in general as well as the financial interests of stock holders. Various articles,
books and web links were referred to make this research report. The organizations
image is what the public is supposed to see when the organization name is mentioned.
CSR is universally defined as the ongoing dedication by organizations to act in an
ethical manner as well as to contribute to economic development, at the same time
enhancing the quality of life of their employees, their families, and the local
community and society entirely.
After receiving the core concept of CSR from many authors and scholars, theorists
argued with this concept of CSR. Secchi has come up with a group of theories based
on a criterion what role the theories confer to the corporation and society. 11 The
theories are as follows: 1) The utilitarian theory, 2) The managerial theory, and 3) The
relational theory. The utilitarian theory states that the corporation serves as a part of
the economic system in which the function is mechanical i.e. traditionally known as in
profit maximization. CSR ideas emerged after a realization that there is a need for an
economics of responsibility, embedded in the business ethics of a corporation. Hence,
the old idea of laissez faire business gives way to determinism, individualism to
public control, and personal responsibility to social responsibility. Utilitarian could
also be taken synonymously with instrumental theories (Garriga and Mele, 2004;

http://deepblue.lib.umich.edu/bitstream/handle/2027.42/90509/1173?sequence=1

10

http://www.mdos.si/Files/defining-corporate-social-responsibility.pdf

11

http://www.sosyalarastirmalar.com/cilt2/sayi9pdf/ismail_maimunah.pdf

Jensen, 2002) in which the corporation is seen as only an instrument for wealth
creation, and its social activities are only a means to achieve economic results.
Instrumental theories were also based on the basic idea about investment in a local
community in which Friedman (1970) strongly stated earlier that the investment will
be in long run provide resources and amenities for the livelihoods of the people in the
community. Secchi (2007) further divides the utilitarian group of theories into two,
namely, the social costs of the corporation and the idea of functionalism. The social
cost theory has a basis for CSR in which the socio-economic system in the community
is said to be influenced by the corporate non-economic forces. It is also called
instrumental theory (Garriga and Mele, 2004) because it is understood that CSR as a
mere means to the end, which leads to the fact that the social power of the corporation
is materialized specifically in its political relationship with society.
Secchis (2007) analysis further stresses the logic of managerial theory that
emphasizes corporate management in which CSR are approached by the corporation
internally. This makes the difference between utilitarian and managerial perspective
of CSR. This suggests that everything external to the corporation is taken into account
for organizational decision making. Managerial theories have been divided into three
sub-groups: 1) Corporate social performance (CSP); 2) Social accountability, auditing
and reporting (SAAR), and 3) Social responsibility for multinationals. CSP aims to
measure the contribution the social variable makes to economic performance. As
conclusion, the managerial theory generates interests in the sense that CSR considers
socio-economic variables to measure firms socio-economic performance, as well as
to link social responsibility ideology to business strategy. Secchi (2005) further
elaborates that SAAR are strictly related to social performance contributions through
accounting, auditing and reporting procedures. SAAR means a firm accounts for its
action. By doing so, firms are controlled and regulated in their actions towards
performing their core business while responsible to the relevant community. CSR for
multinationals (MNCs) grows as a result of global competitions and challenges they
faced. This aspect of managerial theory comes into being as a result of the
responsibility the managers have to shoulder by defining useful tools about the CSR
for the MNCs to survive in foreign countries.

Relational theory has a root from the complex firm-environment relationships. As the
term implies, interrelations between the two are the focus of the analysis of CSR.
Relational theory is further divided into four sub-groups of theories: 1) business and
society; 2) stakeholder approach; 3) corporate citizenship; and 4) social contract.
Business and society is proposed to mean business in society in which CSR emerges
as a matter of interaction between the two entities. One of the measures of CSR is the
development of economic values in a society. Another is a persons obligation to
consider the effects of his decision and action on the whole social system. Stated in
the form of a general relationship, social responsibilities of businessmen need to
reflect the amount of social power they have.
Stakeholder approach has been developed as one of the strategies in improving the
management of the firm. It is also said as a way to understand reality in order to
manage the socially responsible behavior of a firm. The stakeholder approach further
considers a firm as an interconnected web of different interests where self creation
and community creation happen interdependently; and individuals behave
altruistically. Corporate citizenship of the relational theory strongly depends on the
type of community to which it is referred. It is a path that a corporation may take to
behave responsibly. Fundamentally, it is about the relationship that a corporation
develops with its stakeholders, and therefore, the former has to continuously search
for engagement and commitment with the latter. Finally, the social contract theory of
the relational group refers to the fundamental issue of justifying the morality of
economic activities in order to have a theoretical basis for analyzing social relations
between corporation and society
Ezekiel S. Asemah, Ruth A. Okpanachi and Leo O.N. Edegoh in their research paper
named as Business Advantages of Corporate Social Responsibility Practice: A Critical
Review published by iiste.org emphasized that there are certain programs of
Corporate Social Responsibility and highlighted on those factors.12Employee Health
and Wellness; organizations need to offers tools and incentives that encourage
employees to adopt or maintain healthy lifestyles. There is also the need to offer a
variety of benefits aimed at protecting employees' physical and emotional health

12

file:///C:/Documents%20and%20Settings/fariha.rizwan/My%20Documents/Downloads/8414-10510-1-PB.pdf

(Asemah, e t al, 2013b). Environmental Integrity; Corporate social responsibility also

covers commitment to protecting and even improving the environment for the benefit
of current and future generations. Through actions such as, but not limited to, using
energy-efficient properties, reducing our reliance on paper and investing in alternative
energy and clean air technology. Environmental responsibility covers precautionary
approaches to prevent or minimize adverse impacts support for initiatives, promoting
greater environmental responsibility, developing and diffusing environmentally
friendly technologies and similar areas (Asemah, e t al, 2013b). Ethical
Responsibilities; Ethical responsibilities could include being environmentally
friendly, paying fair wages or refusing to do business with oppressive countries, for
example (Smith, n.d). Ethical CSR entails incorporating responsible practices that
minimize the societal harms of business operations (Lantos, 2001), cited in Asemah, e
t al, 2013b). There are many ways for organizations to implement ethical business
practices; these include minimizing environmental pollution from manufacturing
facilities and providing healthcare benefits to employees. Legal Responsibilities; A
companys legal responsibilities are the requirements that are placed on it by the law.
Next to ensuring that organization is profitable, ensuring that it obeys all laws is the
most important responsibility, according to the theory of corporate social
responsibility. Legal responsibilities can range from securities regulations to labour
law, environmental law and even criminal law (Smith, n.d, cited in Asemah, e t al,
2013b).

Philanthropic

Responsibilities;

Philanthropic

responsibilities

are

responsibilities that go above and beyond what is simply required or what the
company believes is right. They involve making an effort to benefit society; for
example, by donating services to host communities, engaging in projects to aid the
environment or donating money to charitable causes (Smith, n.d). Philanthropic
corporate social responsibility involves giving funds, goods or services, sometimes
serving as advertising. For example, the local branch of a bank might donate money to
fund uniforms for a school sports team or a health care company might donate to the
city opera. Philanthropic CSR describes a companys support for a cause or activity
that occurs outside of their business operations, but provides benefit to society (
Kerlin and Gagnaire, 2009, cited in Asemah, e t al, 2013b). Economic
Responsibilities; An organizations first responsibility is its economic responsibility;
that is to say, an organization needs to be primarily concerned with turning a profit.
This is for the simple fact that if a company does not make money, it will not last,
10

employees will lose jobs and the company will not even be able to think about taking
care of its social responsibilities. Before a company thinks about being a good
corporate citizen, it first needs to make sure that it can be profitable (Smith, n.d). This
implies that economic responsibility covers areas like integrity, corporate governance,
economic development of the community, transparency, prevention of bribery and
corruption, payments to national and local authorities, use of local suppliers, hiring
local labor and similar areas (Asemah, e t al, 2013b).
The paper is anchored on two theories; namely stakeholders theory and iron law of
social responsibility theory. Stakeholders theory is a theory of organizational
management and business ethics that addresses morals and values in managing an
organization. The stakeholder theory of CSR is based on the assumption that
organizations, whether private or public, have obligations to several groups that make
up the society. These constituents are referred to as stakeholders- individuals and
groups that are critical to the existence of the organization; they influence what the
organization does or they are being influenced by organizational actions (Asemah, e t
al, 2013a). As an integral part of the normative CSR theories, the stakeholder theory
stipulates that management has a moral duty to protect not only the corporation, but
also the legitimate interest of all stakeholders. Thus, all stakeholders interests must
be maximized at all times. In this way, when an organization invests in the society, it
is expected to reap this in form of improved reputation and understanding when things
go wrong; and to equally maximize even the profit motive of the owners in the
process (Asemah, e t al, 2013b). The theory is relevant to the study because it explains
the constituent groups that an organization should be responsible to; thus,
organizations that are socially responsible to the constituent groups will win their
goodwill and this will in turn impact on the operations of the organization positively.
The iron law of responsibility says that in the long run, those organizations that do not
use power in ways that society considers responsible will tend to lose it.
Organizations are tied to the environment based on the iron law of responsibility.
Thus, organizations must be socially responsible to the communities where they
operate. This theory is also relevant to the study because it lays emphasis on
organizations being socially responsible in their operations so that they will be able to
win the goodwill of stakeholders.

11

Pivato et al. 2008 says that despite the considerable research in the area of CSR,
literature arising out of it is limited in an important respect i.e. impact of CSR
initiatives on the internal stakeholders - the employees.13 Balmer and Greyser (2002)
are of the view that employees' perceptions and attitudes about an organization's
ethics and service to community play an important role in shaping their behavior with
regard to the organization14 and the management, but this significant aspect of CSR
has callously been ignored by the researchers of this area. Aguilera et al., (2007)
endorsed this view saying that employees as a unit of analysis have received limited
attention in past CSR literature. They further say that despite wide potential relevance
of the CSR initiatives for employees' attitudes and behaviours ,
OB and HRM researchers have under-investigated CSR in this area.15 Wood & Jones
(1995) had said earlier that although some theoretical models of Corporate Social
Performance explicitly included employees as a factor of for analysis of the outcomes,
only few studies have investigated CSR's influence on employees attitudes and
behavior.16 The question of whether CSR driven attitudes and behaviors can affect
employees'

organizational

performance,

and

ultimately

corporate

financial

performance, has rarely been investigated. Supporting this view, Cropanzano et al.
(2001) say that OB research has demonstrated that employees not only react to how
they are treated by their organization, but also to how others, besides themselves and
outside the organization, are treated. 17
Becker-Olsen et al, (2006) expressed similar views and say that employees' attitudes
about organizations depend in part on those organizations' actually engaged in CSR
initiatives. Findings of Rupp et al. (2006) are interesting in this connection. They say
if an employee perceives that his or her organization behaves in an obviously socially
irresponsible way (e.g., has damaged the environment, has victimized a protected
13

Pivato, S., Misani, N., & Tencati, A. (2008) The impact of corporate social responsibility on consumer trust: The
case of organic food. Business Ethics: A European Review, 17(1), 3-12.
14

Balmer, J. M. T., & Greyser, S. A. (2002) Managing the multiple identities of the corporation. California
Management Review, 44(3), 72-86.
15

Aguilera, R. V., Rupp, D. E., Williams, C. A., & Ganapathi, J. (2007) Putting the S back in corporate social
responsibility: A multi level theory of social change in organizations. Academy of Management Review, 32, 836863.
16

Wood, D. J., & Jones, R. E. (1995) Stakeholder mismatching: A theoretical problem in empirical research in
corporate social performance, International Journal of Organizational Analysis, 3: 229-267.
17

Cropanzano, R., Byrne, Z. S., Bobocel, D. R., & Rupp, D. E. (2001) Moral virtues, fairness heuristics, social
entities, and other denizens of organizational justice, Journal of Vocational, Behavior, 58, 164-209.

12

group, or has taken advantage of the general public); he or she will be likely to exhibit
negative work attitudes and behavior. Conversely, if an employee perceives that his or
her organization behaves in a highly socially responsible manner even toward those
outside and apart from the organization, he or she will likely have positive attitudes
about the company and work more productively on its behalf.
The authors further say that when employees, like other stakeholders, regard their
organizations as responsible, compassionate, and benevolent citizens of their
community (a goal of CSR activity), they will be more likely to be content with their
employment relationships with such organizations. Likewise, Ellis, A. D. (2008)
refers to a term Personal Social Actions (PSA) PSA - the activities that do not include
CSR initiatives undertaken by the firm that have no employee involvement such as
community grants, donations, corporate-wide sustainability programs, and in-kind
donations - and say that employees who have the opportunity to personally and
directly engage in personal social actions (pro social behavior to the outside
community, not to those in organization) will experience stronger positive outcomes
than those employees in organizations who do not have the opportunity to act directly
or those who choose not to.

Riordan et. al, (1997) found that employee's perceptions of corporate image can
positively influence job satisfaction, and negatively influence turnover and turnover
intentions through strengthening their identification with the organization. Pratt
(1998) defined organizational identification as the degree to which organizational
members perceive that an organization shares their defining attributes. Ashforth &
Mael (1989) had earlier suggested the way the CSR initiatives develop employees'
identification with the organizations, through making reference to their social identity
theory. Social identity theory suggests that individuals tend to reinforce their selfesteem and bolster their self image by identifying with groups and organizations
recognized for their social engagement and responsibility.

Flynn (2005) says that individuals' identification with an organization may be aligned
with specific forms of social exchange. While referring to the social exchange theory
of Blau (1964), she suggests that individual levels of organizational identification may
influence social exchange, and subsequent processes, triggered by CSR, may affect
social exchange dynamics within organizations. In this way, Flynn's model combines
13

theories of social exchange and social identity to explain how employees may develop
a sense of obligation and engage in productive or counterproductive work behaviors,
rewarding or punishing CSR practices, especially those directed at employees and
work conditions.

Barone, M., Norman, A and Miyazaki, A. (2007) in his journal Consumer response to
retailer use of cause- related marketing: Is more fit better? 18 Recognized that CSR as
a powerful tool enhances the brand image and reputation of the business which leads
to improvement in sales and customer loyalty. By adopting the right programs, it
increases the ability to attract and retain employees. Used as a right tool, it offers
manifold benefits, both internally and externally. Internally, it cultivates a sense of
loyalty and trust amongst the employees. It improves operational efficiency and is
often accompanied by increase in quality and productivity. It serves as a soothing
diversion from the routine workplace practices and gives a feeling of satisfaction and
a meaning to the lives of the employees. Organizations stand to have two kinds of
benefits from practicing corporate social responsibility; these include internal and
external benefits. Likewise, CSR benefits can also be classified into tangible and
intangible categories. Tangible benefits are those that are easily quantifiable in
financial and physical terms whereas intangible benefits are harder to quantify and are
non-physical in nature (Nurn and Tang (2010). The external benefits of corporate
social responsibility that have been empirically tested as noted by19 Nurm and Tang
(2010) are: corporate reputation and reducing business risk, customer goodwill and
increasing rivals costs also averred that a few internal benefits have been studied
empirically, like
employee

and workplace attitude. Other internal benefits include that of

motivation,

employee

morale;

commitment,

trust,

employee

loyalty/retention, and organizational citizenship behaviors. This implies therefore that

corporate social responsibility is advantageous to every business organization; and
these advantages cover the ones the organization can see and the ones that cannot be
seen. Similarly, a study conducted by Dodd and Supa (2011) to find out the
relationship between corporate social responsibility performance and consumers
18

Barone, M., Norman, A and Miyazaki, A. (2007). Consumer response to retailer use of cause- related marketing:
Is more fit better? Journal of Retailing, 83(4), Pp. 437445.
19

Nurn, C. W and Tan, G. (2010). Obtaining intangible and tangible benefits from corporate social
responsibility.International Review of Business Research Papers. Vol. 6(4), Pp. 360 371.

14

purchase decision20 shows that there is relationship between consumers purchase

intentions and organizations involvement in socially responsible programs.
Branco and Rodrigues (2006, p. 112) in Shareholder value, stakeholder management
and social issues: Whats the bottom line also discussed briefly how the intangible
benefits of CSR result in sustained competitive advantage for firms when they averred
that the contribution that CSR may have to financial performance is nowadays
primarily related to qualitative factors, such as employee morale or corporate
reputation21 Corporate social responsibility branding can draw consumers away from
competitors and thereby improving profitability. Corporate social responsibility can
also attract socially conscious consumers (Hillman and Keim, 2001).
From the above meaning of CSR, it is undeniable that CSR has implications on
community and Community Development in many ways. Based on the report of
Towers Perrin (2009) CSR is the third most important driver of employee engagement
overall. The relation between CSR activities and firm value is unclear partly because
of methodological concerns (Margolis and Walsh 2001) and, in particular 22, model
misspecification. Even more important is, perhaps, the lack of understanding about
the channels through which CSR affects firm value. Most theoretical models assume a
direct link between CSR and firm value.

Sources of the advantage lay on a wide range of socially responsible activities, which
can be targeted on three areas, in terms of CSR. Corporate social responsibility (CSR)
can be seen as the "economic, legal, ethical and discretionary expectations that society
has of organizations at a given point in time"23 (Carroll and Buchholtz 2003, p. 36,
cited in Asemah, Okpanachi and Olumuji, 2013a). The economic responsibilities cited
in the definition refer to societys expectation that organizations will produce goods
20

Dodd, M.D and Supa, D.W. (2011). Understanding the effect of corporate social responsibility on consumer
purchase intention. Public Relations Journal Vol. 5 (3), Pp. 1-19
21

http://faculty.wwu.edu/dunnc3/rprnts.shareholdervaluesocialissues.pdf
Hillman, A. J. and Keim, G. D. ( 2001). Shareholder value, stakeholder management and social issues: Whats the
bottom line. Strategic Management Journal. Vol. 22(2), Pp. 125140.
22

Margolis JD, Elfenbein HA, Walsh JP (2009) Does it pay to be good0 0 0and does it matter? A meta-analysis of
the relationship between corporate social and financial performance. Working paper, Harvard University,
Cambridge, MA.
Asemah, E.S., Okpanachi, R.A and Olumuji, E.O. (2013a). Universities and corporate social responsibility
performance: An implosion of the reality. African Research Review. Vol. 7(4).
23

15

and services that are needed and desired by customers and sell those goods and
services at a reasonable price (Asemah, e t a l, 2013b). Organizations are expected to
be efficient, profitable and to keep shareholder interests in mind. The legal
responsibilities relate to the expectation that organizations will comply with the laws
set down by society to govern competition in the marketplace (Asemah, e t al, 2013a).
Organizations have thousands of legal responsibilities governing almost every aspect
of their operations, including consumer and product laws, environmental laws and
employment laws. The ethical responsibilities concern societal expectations that go
beyond the law, such as the expectation that organizations will conduct their affairs in
a fair and just way. This means that organizations are expected to do more than just
comply with the law, but also make proactive efforts to anticipate and meet the norms
of society even if those norms are not formally enacted in law. Finally, the
discretionary responsibilities of corporations refer to society's expectation that
organizations be good citizens. This may involve such things as philanthropic support
of programs benefiting a community or the nation. It may also involve donating
employee expertise and time to worthy causes (Asemah, e t al, and 2013b)
Corporate social responsibility, as noted by Ogbemi and Akpoveta (2012, p. 89) is
all that public relations is, because having been involved in the community where a
company is operating is a natural part of a successful business practice 24 Corporate
social responsibility which is considered an important aspect of business today,
started as a significant aspect of competitiveness became relevant, particularly during
the period of economic recession, when business environment was degrading. There
was pressure for lowering already agreed prices and delay of payments, which
deteriorated business and affected the collection of receivables. In determination of
financial and non-financial impacts of the crisis, the economy began to show
unhealthy phenomena such as the significant loss of trust. According to a survey
conducted by the Factum Invenio in 2009 for Czech Donors Forum, two thirds of
Czech citizens believed that the economic crisis affects, among other areas, the
socially responsible behavior of corporations (Petrov and Rejkov, 2009, cited in
Klara, n.d). Corporations around the world were struggling with a new role, which
was to meet the needs of the present generation without compromising the ability of
the next generations to meet their own needs. Organizations were being called upon to
Ogbemi, O.B and Akpoveta, E.E. (2012). Community relations and crisis resolution in Niger Delta: A
synergy. Benin Mediacom Journal. Number 5, Pp. 84-90
24

16

take responsibility for the ways their operations impact societies and the natural
environment. They were also being asked to apply sustainability principles to the
ways in which they conduct their business. Sustainability refers to an organizations
activities, typically considered voluntary, that demonstrate the inclusion of social and
environmental concerns in business operations and in interactions with stakeholders
(Van Marrewijk and Verre, 2003, cited in Alessia, Henderson and Sue, 2009).
According to Crowther and Aras (2008, p. 13) social responsibility is not limited to
the present members of the society, but should also be expanded to its future
members, as well as environment, since it will have implications for members of
society, both now and in the future.
The classical view of CSR was narrowly limited to philanthropy and then shifted to
the emphasis on business-society relations particularly referring to the contribution
that a corporation or firm provided for solving social problems. In the early twentieth
century, social performance was tied up with market performance. The pioneer of this
view, Oliver Sheldon (1923, cited in Bichta, 2003), however, encouraged
management to take the initiative in raising both ethical standards and justice in
society through the ethic of economizing, i.e. economize the use of resources under
the name of efficient resource mobilization and usage.25 By doing so, businesses
created wealth in society and provided better standards of living. The present-day
CSR (also called corporate responsibility, corporate citizenship, responsible business
and corporate social opportunity) is a concept whereby business organizations
consider the interest of society.
Borogonovi, Veronica (2011), article in knowledge at Wharton, stated that today,
CSR has different meaning for different companies. Some termed CSR in the sense
of social issues while other for environmental issues. But there are not any mandatory
guidelines for CSR so that the problem of areas of CSR can be sort out. Mallen
(2012), in this article the researcher depicted that how the trends of CSR have
changed from last so many years. This change has affected both the society and

25

Bichta, C. (2003). Corporate socially responsible industry (CSR) practices in the context of Greek. Social
Responsibility and Environmental Management, 10, 12-24.

17

business.26 The researcher explained three basic things about the changes in trend.
These are:

Firstly, the relationship between business and society has changed. This is
happening because of social and environmental problem around the
world. Because of these conditions, business and society came closer.

Second, the businessmans strategy of developing business also affected

society a lot. Businesses new ideas, concept, developments also came
with CSR management that reflects in their product and services.

Third, the other parties like outside agencies and firms own goals also
interfere the firms activity.

An article published in Triple Bottom Line Magazine entitled Initializing CSR: The
top three essential elements presented CSR according to changing time period. It has
revealed through the article that CSR should be at the core of business goals.
Sometimes, companies escaped because of social activities in which they
engaged but in reality they suffered from financial problem at that time, or may
be fraud.
Windsor (2001), article examined the future of Corporate Social Responsibility
or the relationship between business and society in long run.Mc William & S.
Seigal (2010) provided the importance of CSR as a strategy of enhancing
reputation of companies. The study indicated that firms selling convincing goods
which comes under the umbrella of CSR activities, leads to consumer loyalty and
increased revenue. Further the study also indicated the importance of advertising
for providing information to consumers about the social welfare activities of the
firm. Beside this the study also included the importance of media and T.V etc. in
order to aware the consumers about firms activities and increasing as well damaging
the reputation. In this way the study concluded about the reputation of firm
through CSR.27 Stakeholder groups can have tremendous influence on profitability;
so, it is in the best interest of the companys bottom line to meet the expectations of

26

Corporate social responsibility: review of literature, Geeta Rani; Kalpana Hooda, 2013.

27

http://indianresearchjournals.com/pdf/IJSSIR/2013/June/4.pdf
corporate social responsibility: review of literature,GeetaRani;Kalpana Hooda,2013.

18

these groups. This explains why Okedare (2007)

28

avers that corporate social

responsibility provides the basis for organizations to consider the interests of society
by taking responsibility for the impact of the organizations activities on customers,
employees, shareholders, communities and the environment in all aspects of its
operations.
Tuppen (2004) also says that corporate social responsibility related issues are
important drivers of corporate image and reputation, which are major determinants of
consumer satisfaction. Satisfied consumer tends to have intensive purchase behavior
and also continue in future in shape of consumer retention (Ali et al., 2010). This is
the important key for gaining sustainable sales revenues and business profits. Uadiale
and Fagbemi (2011) examine the impact of corporate social responsibility activities
on financial performance measured with Return on Equity (ROE) and Return on
Assets (ROA) in Nigerian companies. The results show that corporate social
responsibility has a positive and significant relationship with the financial
performance measures. Corporate social responsibility is a driving force in
strengthening the process skills of individuals in the community, enabling people to
work together toward common goals and objectives (Rausch and Patton 2004).
Crowther and Aras (2008) insist that the central tenet of social responsibility is the
social contract between all the stakeholders to society, which is an essential
requirement of civil society.29

Corporate social responsibility programs can also help to establish a positive

corporate reputation that makes consumers resilient to negative company news (Du, et
al., 2010). Consumers can become promotional mechanisms for a company or brand
through positive wordofmouth communication. The internet has offered a magnified
platform for this, as consumers are using social networking sites to communicate their
enthusiasm for a company or brand because of its socially responsible practices or
projects (Du, et al., 2010). However, this powerful voice can have an adverse effect
for a company that is not meeting consumer expectations (Austin, eta l, 2006).
Okedara, T.K. (2007). Corporate social responsibility: A tool for healthy living, paper presented at a
seminar organised by Nigerian Institute of Public Relations, Ogun State Chapter, at Iwe Irohin House,
Abeokuta, 16th August.
28

Crowther, D and Aras, G. (2008). Corporate social responsibility. Copenhagen: Ventus Publishing. Davis, K.
1973. The case for and against business assumptions of social responsibilities. Academy of Management
Journal. Vol. 16, Pp. 312-317.
29

19

Consumers have been known to punish companies they believe are behaving
socially irresponsibly through product boycotts and encouraging others to do the same
(Austin et al., 2006). 30 Consumers may also be willing to pay a premium price for
products offered by a company engaged in corporate social responsibility (Austin,
Leonard, Reficco and WeiSkillern, 2006; Du et al., 2010).31

Companies can also realize benefits of socially responsible business practices

internally, among its employees. When employees are aware of the responsible
practices and philanthropic activities of their employer, it can generate feelings of
pride in the company and lead to increased employee dedication to the company
employees (Austin, et al., 2006). Corporate social responsibility can also lead to
employees increased willingness to offer more time and energy to their companies
(Maignan and Ferrell, 2004).32 When employees feel this sense of pride for their
company, this follows them outside of the office and they can become a promotional
asset to the company, serving as ambassadors for the brand. Shareholders are mainly
concerned with the companys financial bottom line. Their interest in corporate social
responsibility relates to how it can differentiate the company in the market to increase
company profits. A company's corporate social responsibility activities can improve
its reputation because it establishes a social value of the company, which can be a
distinguishable quality that helps set it apart from competitors (Austin et al., 2006).
Stakeholders provide organizations with a range of resources such as capital,
customers, employees, materials and legitimacy (Deegan, 2002).33They also provide
the license to operate to the organizations in return for the provision of socially
acceptable or legitimate, actions. To strengthen this social contract which allows
organization to continue operations, they need to be socially responsible. This can be

De Bakker, F and Nijhof, A. (2002). Responsible chain management: A capability assessment framework.
Business Strategy and the Environment. Vol. 11(1), Pp. 63-75.
30

Du, S., Bhattacharya, C. B. and Sen, S. (2010). Maximising business returns to corporate social
responsibility (CSR): The role of social responsibility communication. International Journal of Management
Reviews. Vol. 12(1), Pp. 819.
31

De Bakker, F and Nijhof, A. (2002). Responsible chain management: A capability assessment framework.
Business Strategy and the Environment. Vol. 11(1), Pp. 63-75.
32

Deegan, C. (2002). The legitimising effect of social and environmental disclosures: A theoretical
foundation. Account Audit Accountability Journal. Vol. 15(3), Pp. 282-311.
33

20

an underlying reason why we would expect food industries to be involved in

corporate social responsibility and reporting it to society.
Robins (2008) avers that the main idea of CSR is that companies should accept that
they play in society more than just an economic role.34 It means an interest to take
liability not only for activities and impact in business, but also responsibility for their
impact on society and environment. This commitment as noted by Robins (2008) is
thereafter perceived as a significant competitive advantage.
Corporate social responsibility is being monitored more closely now than ever before
because consumers are very concerned with responsible business practices (Morsing
and Schultz, 2006).

35

Today, the society as a whole and media increasingly

request companies to consider social and environmental problems while doing

business activities. CSR has become one of the catchphrases of new millennium
across the world and the corporate as well as government must take care of it. It is
now universally defined as the ongoing dedication by organizations to act in an
ethical manner as well as to contribute to economic development, at the same time
enhancing the quality of life of their employees, their families, and the local
community and society entirely.
Work of Ehsan and Ahmed (2012) is relevant to the Pakistan perspective. They found
that the organization's social responsibility healthy conduct builds belief of employees
in the organization and gives them inspiration and shapes their self-confidence. They
also explore the nature of association between employees and corporate social
responsibility in the circumstances of Pakistan using data of almost one hundred firms
from the manufacturing sector for the time period of 2006-2009. For the analysis of
the data the researcher has used Correlation and Generalized Least Square Random
Effect Regression based applied Statistical tools and techniques. Results of the study
has diagnosed that the nature of affiliation between employee and CSR is positive in
case of manufacturing sector of Pakistan. Therefore, the positive affiliation highlights
on the optimistic social behavior of organizations in Pakistan in manufacturing sector.

Robins, F. (2008). Why corporate social responsibility should be popularised but not imposed.Corporate
Governance. Vol. 8 (3), Pp. 330-341.
34

Morsing, M and Schultz, M. (2006). Corporate social responsibility communication: Stakeholder

information, response and involvement strategies. Business Ethics: A European Review. Vol. 15(4), Pp.323338.
35

21

CHAPTER THREE
THEORETICAL ANALYSIS

22

One of the best ways to win hearts and minds is to do well. According to Cones 2013
Cone Communications/Echo Global CSR Study,36
Corporate social responsibility is no longer an option it is emphatically and
indisputably a must-do.
Corporate Social Responsibility, or CSR, is something that was started by fashionable
'ethical' businesses. Realizing that promoting a responsible way of doing business
actually improved the bottom line soon received wider interest in the corporate
world.37
Corporate social responsibility (CSR),also known as corporate responsibility,
corporate citizenship, responsible business and corporate social opportunity, is a key
concept whereby organizations considers the interests of society by taking
responsibility for the impact of their activities on customers, suppliers, employees,
shareholders, communities and other stakeholders, as well as the environment.38
It refers to a business practice that involves participating in initiatives that benefit
society.
It has been exposed as an effective management tool to strengthen the organizations
performance through a better image in stakeholder's mind and also because of their
responsible behavior toward society and environment.39
3. History
The term CSR was first coined in the 1950s and it gained peculiar attention in
management studies in the 1970s. Predominantly, the activities under the umbrella of
CSR fall into three categories: economic growth, ecological balance and social
progress.40

4. Types of CSR
Businesses can practice the following few categories of social responsibilities.41

4.1 Environment

36

http://prfirms.org/inside-pr/corporate-social-responsibility
http://www.british-assessment.co.uk/articles/an-introduction-to-corporate-social-responsibility-csr
38
https://www.scribd.com/doc/34569551/Role-of-Corporate-Social-Responsibility-in-Pakistan-Telecom-Industry
39
http://www.palgrave-journals.com/dbm/journal/v19/n4/full/dbm201219a.html#bib1
40
http://www.palgrave-journals.com/dbm/journal/v19/n4/full/dbm201219a.html#bib1
37

41

http://www.businessnewsdaily.com/4679-corporate-social-responsibility.html

23

One primary focus of corporate social responsibility is the environment. For example,
businesses, both large and small, have a large carbon footprint. Any steps they can
take to reduce those footprints are considered both good for the company and society
as a whole i.e. everything from curbing pollution to developing clean energy
solutions.
4.2 Philanthropy
Businesses also practice social responsibility by donating to national and local
charities. It includes donation of sales, unrestricted cash donations, donation of
products, employee volunteerism, collection of customer donations, charity events
and promotion of public service announcements.
4.3 Legal Responsibility
Laws exist within the marketplace, and they govern how corporations are to conduct
their business affairs. Competition with other businesses, regulation of taxes and
employment laws are but a few areas of legal responsibility where corporations are
expected to adhere to the laws. These laws and standards are established nationally
and locally. Corporations are also expected to operate their businesses in a fair
manner and to conduct sound practices.
4.4 Ethical Labor Practices
By treating employees fairly and ethically, companies can also demonstrate their
corporate social responsibility. This is especially true of businesses that operate in
international locations with different labor laws than those in the United States.
Research shows that consumers will turn on companies extremely quickly if they are
found operating sweatshops or violating other ethical labor practices.

5. PRINCIPLES OF CSR
There are three basic principles which together comprise all CSR activities42.
5.1 Sustainability
This is concerned with those actions that the organizations take in present and its
effects upon the options available in the future. If the resources are in finite quantity
and utilized in the present, they are no longer available for use in future.
5.2 Accountability
This is concerned with an organization recognizing that its action affects the external
environment, and therefore assuming responsibility for the effects of its actions.
42

Corporate Social Responsibility Does Not Avert the Tragedy of the Commons - Case Study: Coca-Cola India, AneelKarnani,

University of Michigan. March 2012.

24

Accountability necessitates the development of appropriate measures

environmental performance and the reporting of the actions of the organization.

of

5.3 Transparency
Transparency means that the external impact of the actions of the organization can be
ascertained from that organizations reporting and pertinent facts are not disguised
within that reporting.

6. DIMENSIONS OF CSR
Carroll described the following dimensions of CSR:43
6.1 Economic
The first of the dimensions to adopt CSR practices is economic value. This means
requiring a good return on investment for the owners and shareholders, creating jobs
and fair pay for workers, and making developments in business.
6.2 Legal
The second of the CSR dimensions is legal responsibility. It is to obey the rules of
business and to govern the business according to government legislation.
6.3 Ethical
This portrays the dimension of business as being moral and doing just and fair things.
Such responsibility is rooted in humanitarian grounds.
6.4 Voluntary
This is the dimension where a firm has a wide scope of flexible behaviors by
performing certain activities by which they are actually contributing to the welfare of
society.
6.5 Staff Development and Training
The organization's agenda for employees training needs for identifying and
developing the talent.
6.6 Protection of Human Rights
To deal with employees on humanitarian grounds and taking care of their health and
safety at the work. In addition, providing them with a smooth working environment.
6.7 Managing Environmental Impacts
43

www.palgrave-journals.com/dbm/journal/v19/n4/full/dbm201219a.html#bib1

25

This aspect is about optimization of resource utilization and reducing environmentally

damaging effluent can reduce the environmental impact.

7. APPROACHES TO CSR
7.1 Obstructive
The avoidance of corporate social responsibility; managers engage in unethical and
illegal behavior that they try to hide from organizational stakeholders and society. 44It
involves minimum effort to improve the social and environmental impact of the
company within a community.
7.2 Defensive
Managers rely only on legally established rules to take the minimal position toward
corporate social responsibility. Efforts to exceed minimum standards are often
nonexistent unless regulations require a change in business practices.
7.3 Accommodative
With this approach, corporations go beyond their ethical and legal obligations to
support sustainable practices. This usually occurs when the corporation is approached
by an outside organization, often charitable, and asked to sponsor an event within the
community.
7.4 Proactive
The proactive approach is the highest degree of CSR. Managers go out of their way to
actively promote the interests of stockholders and stakeholders, using organizational
resources to do so.
Not all companies consistently follow one corporate social responsibility approach. A
company may take a proactive stance on one issue and a defensive stance on another.

CSR PRACTICE IN PAKISTAN

Pakistan is home for 168 million people with a huge labor force and with a variety of
legal standards. As like other developing countries, Pakistan has also different

44

http://www.answers.com/Q/What_are_four_approaches_to_corporate_social_responsibility

26

multinational and domestic companies working in different areas. There is huge

potential for greater demand of food and services sector. Some of the business
organizations getting huge profit without considering the social and environmental
concern in their business and creating sloppy business environment. This sloppy
environment

attracted

not

only domestic

but

also

international

business

companies that are not allowed to operate in developed countries. different

industries have shifted their business into South Asian countries because of cheap
labour. In addition, these industries discharge their waste directly

into

the

environment. In this way they are deteriorating the natural habitat and posing
different health problems that worsen the livelihoods of the people which lead to
poverty, human rights violation and other forms of exploitation.
CSR is at an evolutionary stage in Pakistan where many companies are
starting to focus on and become aware of this notion. More than60% of companies
have contributions to charity, community development, and donation in the form
of cash for humanitarian or religious reason. However, for many companies
working in Pakistan, CSR is not prioritized and they percept differently when
compared their CSR framework e.g , The majority of domestic companies possess
a different perception about CSR, 40% of companies have the perception that
CSR is paying taxes, along with 30% having the perception that CSR is social welfare
development, 15% have impression that CSR is employee welfare development, 10%
assume CSR is related to working in areas where companies have deep interests, only
5% recognize that CSR is implementing social development activities.
As consequence of above perception, the CSR is perceived differently by many
companies in Pakistan and also CSR have different definitions. In Pakistan there are
many ways to work with CSR and have great potential for developing new business
opportunities; its biggest asset is its population having great demand for goods and
services. This great potential for new business horizons allows many companies
to

satisfy

their consumer demand with a variety of products and also attract

stakeholders interest towards the companys strategy. So, CSR strategies in these
organizations are an essential initiative creating awareness, and knowledge about
ethical responsive behavior among business organizations. Although, there is no
100% clear definitions of CSR in the world. In Pakistan the awareness about CSR is
27

very low which create bad condition in Pakistani market and bad reputation of
Pakistani product in international market. There is great need to create
understanding about CSR and ethical fashion to conduct the business in sustainable
way.
CSR can be use as a tool for companies to implement in their strategy and
can improve public relation and economic performance. In the Pakistani context,
the companies can create a consumer market by adopting sustainable practices in
their strategy. The company with sustainable practices can sustain its presence in
the market for longer period of time. CSR allows the companies to adopt the
triple bottom line approach by considering the environment, the social, and the
economic aspect of the business. This makes companies to behave ethically
and act as responsible citizen in the society. Adopting sustainable practices can make
strategic strength.
CSR can also bind the workers in the company and maintain positive relationship
with the stakeholders and create security for the business owners and shareholders.45

45

stud.epsilon.slu.se/2096/1/hameed_s_k_101222.pdf

28

CHAPTER THREE
RESEARCH METHODOLOGY

9.1 Method Overview

This chapter describes the steps that were taken to collect data for this research study
and also the reason for choosing the methods adopted in this research and the
relevancy of each of the methods employed in this research study.
The population study was chosen to be the organizations working in Pakistan, and the
sample size was seven organizations of Pakistan. The structured questionnaire was
admitted to the departments which look CSR.

9.2 Data Collection Methods and

Procedures
1. According to Levent Altinary & Alexandros Paraskevas, (2008), there are various
techniques for collecting qualitative data such as telephone interviews,
observations, Questionnaires. Among them the study use case study of two
organizations and survey or structured questionnaires to obtain specific
information such as ways of information search to obtain information ,
perceptions, attitudes , factors and behavior regarding CSR and its benefit. The
data was collected by means of 13 questionnaires among organizations.46

9.3 Sources of Data

Both primary and secondary data were chosen to collect the data that were used in
analyzing the research study. Given the nature of the research topic, it is most suitable
to employ both primary and secondary data collection method. Primary data were
46

LeventAltinary&AlexandrosParaskevas,(2008).Planning Research in Hospality andTourism: Elsevier

29

obtained through questionnaires given to respondents while the secondary data were
gathered through journals, articles, internet and other published materials and case
studies.

9.3.1 Collection of primary Data

Structured questionnaires were distributed to employees. The questionnaires are filled
in front of researcher himself. The sample of 13 respondents was collected between
20th March to 5th April, 2013.
A complete furnished questionnaire was provided to the consumers that contained
close ended-multiple choice questions and open ended questions

9.3.2 Collection of Secondary Data

Secondary data consists of data retrieved from University database, such as articles,
journals, literatures in addition to books barrowed from University library or retrieve
from Google Books and Google Scholar. These materials would facilitate this
research study. In addition they would be critically interpreted with caution in order to
avoid creating a false impression with the originators observation or view.

9.4 Population:
Population can be define as a complete set of elements (persons or objects) that
possess some common characteristic defined by the sampling criteria established by
the researcher
Our population is all the organizations of Pakistan.

9.5 Sampling Plan

Our sampling plan includes

30

a) Sampling frame
b) Sampling technique

9.5.1 Sampling Frame:

A sampling frame is the source material or device from which a sample is drawn. It is
a list of all those within a population who can be sampled, and may include
individuals, households or institutions.
Our sampling frame is seven organizations working in Pakistan.

9.5.2 Sampling techniques

Two types of sampling techniques can be used:

1) Probability Techniques
Members are selected by chance and there is a known chance of each unit being
selected.

2) Non probability Technique

Members are selected on the basis of convenience or judgment or by some other
means rather than the chance.
We have used non-probability sampling method to select our sample.

9.6 Questionnaire design

The design of the questionnaire encompasses all the concepts employed in this
research such as CSR information that are relevant and pertains to the research study.
The questionnaire is designed to be brief, simple, and clear, covering the relevant
aspects of the models used.
According to Fisher (2007, p.192) it is recommended to Keep the questionnaire as
short as possible and give it a logical and sequential structure so that the respondent
31

can easily see what the questionnaire is about and can follow its themes as they
develop .47

9.7 Ethical Considerations

The permission for the study will be obtained from respondent. Purpose of the study
will be explained to the participant and make assure for the confidentiality and
privacy of the information given by them.

47

Fisher C. (2007), Researching and Writing a dissertation, A guild Book For Business Student,Second Edition, Prentice Hall.

32

CHAPTER FOUR
DATA ANALYSIS

ANALYSIS OF QUESTIONNAIRE
We have completed this survey questionnaire by the help of managers of
renowned organizations.
1. Do you think corporate social activities affect positively on the
image of organization?
0%

1%

0%

Yes
No
Sometimes
Perhaps

12.92%

To answer this question most of the respondents said that CSR activities positively
affect the on the image of organization because companies that have ethical lapses
such as ignoring environmental regulations or standards for how employees should be
treated can suffer damage to their reputation.

2. Do you think CSR activities affect the mindset of stakeholders?

33

1.80%

1.80%
Yes
0%

No
Sometimes
Perhaps

11.85%

Majority of the respondents said that CSR activities strongly affect the mindset of
stakeholders because A companys image affects its relationship with all of its
stakeholders, and remaking a companys troubled image into one of stability -sometimes referred to as damage control -- can take time and draw managerial
resources from the important tasks of building the company. Customers who leave
because they do not approve of the companys image can be difficult to win back.

3. If yes or sometimes, then mark the stakeholders who get affected

by CSR activities.

3.23%
8.62%
4.31%
Employees
Employer
Consumers
Suppliers
3.23%

Others

12.92%

34

The respondents who said that stakeholders are affected by the CSR activities were
further specified that firstly consumers are highly affected, secondly employees of
that organization, thirdly the suppliers where as employer and other are remain less
affected by these activities. Because consumers may choose to not do business with
companies that have a reputation for being socially irresponsible. The good the
company does is part of the perceived value of its products and services and can result
in higher customer satisfaction. Thus, a stable, loyal customer base is a valuable asset.

4. Mark the motives for having a CSR approach.

2.15%

5.38%
10.77%
Economical Benefit
Enhanced Reputation
Sustainable Development
Other

12.92%

Respondents answer the question about the motives for having a CSR approach in a
way that majority voted to enhance the reputation of the organization, then for
economical benefit, some for sustainable development and less for other approaches.
This is because Building strong reputation is becoming the first priority of every
business because consumers are more attracted by what a company stands for rather
than the products or services it sells.

5. Do you think organizations are communicating their message,

mission and vision to the consumers through CSR activities?
35

3.23%

Yes
No
Sometimes
1.80%

Perhaps
9.69%

0%

We came to know by the result of this question that most of the organizations
communicate their message, mission and vision to their consumers through CSR
activities because it is very useful technique to convey what organizations think about
social responsibility.

6. Do you think CSR activities bring positive changes in terms of

socio-economic welfare of society?
0%

6.46%

6.46%

Yes
No
Sometimes
Perhaps

1.80%

36

Yes, the changes in socio-economic welfare of society which CSR activities bring are
positive so as to society will believed that organization is not only making money for
itself or employees but they also care for environment, human, society and prevailing
issues in society.

7. Is there any support and influence from the government towards

conducting CSR activities?
1.80%

1.80%
6.46%

Yes
No
Sometimes
Perhaps

5.38%

This question about the support and influence from the government towards
conducting CSR activities has answered sometimes or perhaps because CSR is the
ethical responsibility of every organization and company which bounds them to
monitor their business activities to ensure that they are performing their duties while
maintaining rules and regulations of the government, ethical standards and
international norms. CSR has not such influence of government but organizations
have to follow laws mentioned by government.

8. What are the most effective CSR activity/activities used in your

organization?

37

Respondents of different organizations gave most effective CSR activities in their

organization which are as follows:

In DevFactory, activity on Education and Environmental Concern Programs.

In DevFactory, activity to contribute to the society and provide satisfaction to
stakeholders.
In Geo, 1. ALIF BAY PAY....a Kawish to promote education in both rural
and urban areas and
2. Zara Sochiye... a campaign to make people familiar with the scenario and
make them motivated as well.
In Geo, MKRF - Mir Khali Ur Rehman Foundation's funds raising campaign
for flood and earthquake victims and
Breast cancer awareness program in collaboration with Pink Ribbon to
spread awareness among users about this disease.
In The Citizens Foundation, Agahi is a program where we help in adult
education. Its effective in building our brand image and increasing acceptance
in society.
In The Citizens Foundation, Ours is an NGO so it as such its all activities is
CSR natured. Agahi program - educational awareness for the mothers of the
students is one of those many activities.
In PIA, There are following activities:
1. for Security,
2. Arranging flights on non-economical routes to provide service to Pakistani
Peoples and to enhance economical activities of Pakistan and;
3. Corporate fire safety and security Management.
In PIA, In August, PIA are committed to donating $500,000 to assist those
who had suffered the extreme flooding it will help provide humanitarian aid,
including supplies and food assistance, to some of the estimated six million
Pakistanis whose homes and livelihoods have been impacted by the heavy
monsoon rains.
In Telenor, they has launched the 'Karo Mumkin' campaign with the aim to
position itself as a leader in innovation, and provide the people a platform
where they can see how their dreams can come true. We award those peoples
of Pakistan who have the capability to prove themselves and really want to
contribute well for the welfare and betterment of society.
In Telenor is effectively promoting CSR through Karo Mumkin Pakistan
with collaboration of Anwar Maqsood sb to facilitate our you by promoting
their talent and let their dreams come true with flying colors.
In Reon, we promote our business of Energy Crisis Management by
contributing well on Renewable Energy Resources as Pakistan is deficit of
Energy. We promote our business through social awareness programs, event
on Alternative energy sector at expo, distributing pamphlets in schools,
colleges and universities to let them know about the natural resources we have
and how we can save electricity.

The above CSR activities are mentioned by our respondents.

38

9.

What are the main benefits of having a good CSR approach?

By having a good CSR approach, we get many benefits such as customer loyalty; it
ensures that the organization is friendlier with the consumers and employees through
social, moral values and activities. It builds a positive image in the mindset of
consumers and the users, profitability increases and socially enables the organization
to represent itself as a socially responsible and caring organization as well as good
will of the organization increases. If the CSR activities include employees or it uses
360 degree approach then the employee engagement and commitment increases while
it will also lead towards a better future of Pakistan as we can provoke our talent and
motivate them through providing a platform to work for the betterment of society.
Organization is recognized and welfare of society establish. It will help the company
in promoting their business and causing better investment opportunities to other
stakeholders. It will furnish and help in branding and promoting a better image in the
mind of consumers. These are some important benefits which we came to know after
conducting this survey.

39

CHAPTER FIVE
CASE STUDY

10.1 GIVE A CSR Initiative by Warid Which Stands Out

Telecom sector has been at the forefront of various social initiatives in Pakistan.Warid
Telecom (Pvt.) Ltd. being a responsible citizen has taken a unique initiative towards
Corporate Social Responsibility. The new concept is first of its kind ever introduced
by any telecom operator in Pakistan. Aiming to support the underprivileged and make
their lives prosperous, Warid introduces GIVE a stairway to hope for unfortunates.
GIVE is a corporate social responsibility program which allows its customers to
support charitable causes with convenience of regularly giving via their phone
(monthly auto deduction facility). As Warid describes it, GIVE allows customers to
choose the registered charities of their choice invite friends & share their feedback
for other charities they are willing to support.
GIVE is a Corporate Social Responsibility exercise to promote a unique effort of
Warid i.e. dedication to a charitable cause of customers choice. The mechanism has
been built in as a feature that allows customers to choose the registered charities of
their choice invite friends & share their feedback for other charities they are willing to
support.
GIVE is a unique effort by any telecom operator in Pakistan, which provides a
continuous commitment to a charity in the form of monthly auto deduction facility.
Subscribers can also send invitation to their friends to participate as well as can share
their feedback on diffrent charities they wish to support. For more information on
GIVE subscribers are also given with a URL.
The features in GIVE include the option my MY GIVE through which you get the
names of charities you are currently supporting. Second option, which is, I want this
cause, is an exclusive feature by which feature you can reach the GIVE team by
recommending the charity organisation of your choice to be included in this initiative.

40

GIVE supports nonprofit organizations. Preferred causes are those, which are
associated with health, education, environment and rehabilitation of calamity hit areas
with currently, Depilex-Smile Again on board.
Warid has always been a responsible organization when it comes to Corporate Social
Responsibility. Be it health, education, environment or rehabilitation of the people of
calamity hit areas; Warid Telecom has always extended a helping hand to
underprivileged for making their lives prosperous.

ARTICLE:
Large multinational companies in Pakistan like Tetra Pak, the Shell Group, and
Barclays Bank are pioneers in using the CSR concept in Pakistan. But the
domestic companies like Fauji Group, Engro and Pakistan Tobacco and several
others are also gaining momentum in the pace of implementing CSR. They have made
some attempts to have written documents on CSR and sustainability. However, it
has been observed that some large organizations in developing countries are
ignoring the CSR concept and they are adversely affecting the livelihood and
increasing the frustration among the people around the area they are working.48
9. EXAMPLES OF CSR ACTIVITIES IN PAKISTAN
8.1 Street Program
Pakistan State Oil, the nation's largest energy company, has inaugurated the first street
under its unique PSO Street Program in Thatta, Sindh. This first-of-its-kind initiative
will help PSO engage both its employees and the public to carry out community
building at a grass-root level and help bring about a social revolution in the lives of
the people.
Under this scheme, PSO will help develop two streets in each province with state-ofthe-art facilities and infrastructure in economically deprived areas across the country
where PSO employees reside. At the first street selected under this program, PSO has
refurbished the entire street, carried out repairs on street infrastructure including water
48

Dawn, 26-02-2010

41

pipelines, drainage lines, street lights, pedestrian walkways, green belt plantation etc
and renovated the surrounding homes through painting of walls and refurbishment of
gates as well.49
8.2 Tapal Free Medical Camp
In collaboration with Tapal Hamqadam; the Mezban brand actively contributes
towards the well-being of its valued customers by organizing medical camps and
other CSR initiatives. The free medical camps are set up in different towns of interior
Sindh where healthcare is often hard to access. Patients get the chance to avail free
checkups by physicians including ENT, Heart and Skin specialists. They also benefit
from the availability of free medicine.50
8.2

BBPK and Flood Relief Campaign

After the disastrous 2010 floods that took away around 2,000 lives and at least 17
million got displaced, the need of the time was to aid the effectives with
the maximum health benefits in order to stop further life damages with the posteffects of the floods. B. Braun Pakistan set up medical camps with the support of
volunteers from the medical fraternity and was honored to treat approx. 15, 500
patients of different diseases.
Apart from this, funds were raised from the B. Braun employees, both from National
& International platforms that were further utilized by different relief camps for the
improvement of the sanitary conditions and water supply in the flood areas as priority.
51

8.4 Mobilink Foundation and PALS clean up Karachi beach

Mobilink Foundation, in its aim to increase activities in Corporate Social
Responsibility (CSR), joined hands with the Pakistan Life Saving Foundation (PALS)
for carrying out beach cleaning at the Sea View beach in Karachi.
Sea View being one of Karachis most frequented beaches, has suffered at the hands
of the visitors and has become quite littered. The bleach cleaning activity was
49

http://www.psopk.com/csr/
http://www.tapaltea.com/csr.html
51
http://www.pharmabureau.org/csr-activity/
50

42

conducted by Mobilink Foundation Torchbearers and PALS volunteers, which lasted

for over four hours, and collected over 200 kg of garbage.
Mobilink Foundation has been committed to preserve Pakistans eco-system and biodiversity and is taking part in another initiative of cleaning of the Margalla Hills in
Islamabad. All the waste material collected from these activities is recycled or
disposed of in conformity with environment friendly measures.52

8.3

Total Children's Park

In 2003, Total Parco set up a retail station, to be operated by the city district
government of Lahore. The site is adjacent to a children's hospital as such one of the
proviso's for the city government to grant use of the land as a retail station was that
the company make some sort of positive contribution towards the children's hospital.
Total decided to renovate a small park directly in front of the children's hospital so
that the children being treated at the hospital and those visiting patients would have a
place to relax and enjoy themselves. The park was renovated with additional plants
and swings along with colourful Total branding.53
8.4 English Biscuit Manufacturers (EBM)
Over the years English Biscuit Manufacturers (EBM) Pakistan has emerged as a
company that cares about its all stake holders including its community and the
environment it operates in. EBM, with the production capacity of over 80000
tons with financial turnover of Rs.7.8 billions, has grown into a Pakistans leading
reliable producer and supplier of high quality biscuits. EBM, besides generating
employment for over 2600 Pakistanis, and contributing over Rs. 850 millions to
the national exchequer in taxes and duties each year, also owns a number of
social welfare projects in education, healthcare, environment protection,
infrastructure development and sports.
8.5 Nestl Pakistan

52
53

http://www.moremag.pk/2013/04/02/mobilink-foundation-and-pals-clean-up-karachi-beach/
http://www.totalparco.com.pk/Lub/LubPakistanParco.nsf/VS_OPM/C125726500351BAAC12573DF00349049?OpenDocumen

43

The CSR of Nestl Pakistan ( Nestl, 2009) is not limited to the projects related
to its to our own areas of expertise including nutrition education & research, and
health projects, rather also has on its credit a long humanitarian relief aid and
food donations, education and rehabilitation programs intended to improve the
lives of underprivileged Pakistanis. A glance over Nestl Pakistans CSR chart
research finds that the firm is committed to Pakistan's long-term betterment and
caring fairly well with the stakeholders socio-economic interests by serving its
customers through provision of high quality products with minimum
environmental impact and educating them about healthy nutrition. The firm has
been very generous in provision of financial and physical assistance to hospitals,
victims of natural disasters and host of social action programs to improve the
socio-economic life of the country under privileged class.
8.6 Telenor
Director Marketing Telenor Pakistan Usman Javaid introduced the Karo
Mumkin campaign. Everyone has an idea or a dream that they wish to
transform into reality. With its products and services, Telenor Pakistan hopes to
inspire hope and self-belief in the people of Pakistan. Telenor Pakistan has
launched the Karo Mumkin campaign with the aim to position itself as a leader
in innovation, and provide the people of Pakistan with a platform for inspiration
and realization of possibilities. The campaign is designed to showcase the vision
of Telenor Pakistan which seeks to explore new business opportunities in
telecommunications, financial services and media. Telenor Pakistan announced
the implementation phase of its Karo Mumkin initiative in February, 2011. The
two winning ideas that emerged from the Telenor Karo Mumkin Show 2010
were turned into on-ground projects, to be launched later this year.

Fariha

Ambreen idea

is

to

collect

waste

papers

from

different

sources/locations, recycle them into notebooks and distribute them for the
education of needy children. Her vision is to see a clean Pakistan, an educated
Pakistan.

Abdul Haq Mohiuddin, a graduate of NED University dreams to see an

educated Pakistan. This prompted him to come up with idea of each
44

graduating student of NED giving Rs. 100 to help an under privileged child in
his education. Each graduating batch of NED and if replicated by other
universities would be able to donate enough money to eradicate illiteracy from
Pakistan.
8.7 Coca Cola helped people to communicate across borders
An uplifting Coca-Cola film shows that what unites us is stronger than what
sets us apart. High-tech vending machines installed in two popular shopping
malls in Lahore, Pakistan and New Delhi, India two cities separated by only
325 miles, but seemingly worlds apart due to decades of political tension
invited consumers to put their differences aside and share a simple moment
over a Coke.
The Small World Machines provided a live communications portal linking
strangers in two nations divided by more than just borders, with the hope of
provoking a small moment of happiness and promoting cultural
understanding

around

the

world.

The

company

placed vending

machines in Delhi and Lahore to create a live communication portal between

the two countries. People were able to see each other through a live feed
being transmitted through a webcam that operated through the glass in the
vending machines. Coke and Leo Burnett used first-of-its-kind 3D touch
screen technology to project a streaming video feed onto the vending
machine screen while simultaneously filming through the unit to capture a
live emotional exchange. People from both countries and various walks of life
were encouraged to complete a friendly task together wave, touch hands,
draw a peace sign or dance before sharing a Coca-Cola.

45

RECOMMENDATION
In doing the research for this topic i.e. CSR-How it Affects Organizations Image, we have found
some important guidelines or we can say recommendations which we should consider while doing
any CSR activity. These recommendations are as follows:
For Customers
Corporations have a responsibility to provide their customers with well made, reasonably
priced products that perform as advertised. Corporations that engage in price fixing or
monopolistic practices attempt to unfairly limit the choices of the buying public, and CSR
discourages these practices. In many cases, they are also illegal. A corporation that conforms
to the dictates of CSR attempts to earn its profits by providing useful products and services to
a community, rather than by maximizing its profits at the expense of exploited consumers.
For Employees
The employees who work for a company are the ones who directly produce its wealth. In some
companies, collective bargaining agreements protect their interests, while in others they do
not. CSR recommends that companies fairly remunerate employees for the efforts that they
put into the success of the company. Equitable packages for employees include fair pay,
benefits, paid vacations and pension plans. Just as importantly, workplaces should be healthy
and safe places that don't subject workers to unregulated toxins or dangerous conditions.
For Society
CSR emphasizes the responsibility of corporations to return some of their wealth and success
to the communities that support them. Given their wealth, social influence and contacts within
government and business, corporations can make a difference for people in need by
contributing to efforts in education, employment training, prison diversion programs, and drug
counseling and small business startups. The theory of CSR argues that the companies
themselves will benefit from these activities by helping to create stable and thriving
communities that benefit everyone.
For Environment
The natural environment is the source of all wealth, and those making the wealth have been
badly abusing it for centuries. Vast forests fall for timber, cattle ranching and slash and burn
agriculture. Human activities pollute rivers and air and increasing temperatures eat away at the
46

polar ice caps. Companies that engage in CSR recognize that their wealth and success are at
least partly to blame for this damage, and contribute money, time and knowledge to
alternatives such as renewable energy, conservation and non-polluting alternatives.54
For Stakeholders
The enterprises should also provide reliable and systematic information on social effects of
business activities, mainly by developing CSR sections on their websites and presenting
CSR reports based on international reporting standards. Moreover, the advantages of
intensive communication with stakeholders include increased level of brand awareness that
is likely to positively contribute to the level of revenues for the company.

54

http://www.ehow.com/info_8503616_recommendations-corporate-social-responsibility.html

47

FINDINGS
We start this research to find out these two points below which we named as
hypothesis. So, both hypotheses are proved correctly.
H1: Corporate social responsibility will have positive effect on organization.
CSR activities positively affect the on the image of organization because companies
that have ethical lapses such as ignoring environmental regulations or standards for
how employees should be treated can suffer damage to their reputation.
Ho: Corporate social responsibility will benefit the organization.
CSR should not be viewed as a drain on resources, because carefully implemented
CSR policies can help your organization:55

Win new business

Increase customer retention

Develop and enhance relationships with customers, suppliers and networks

Save money on energy and operating costs and manage risk

Differentiate yourself from your competitors

Generate innovation and learning and enhance your influence

Improve your business reputation and standing

Provide access to investment and funding opportunities

Generate positive publicity and media opportunities due to media interest in

ethical business activities

55

http://www.simplycsr.co.uk/the-benefits-of-csr.html

48

CHAPTER 6

CONCLUSION
In this research, we concluded that corporate social responsibility (CSR) is a concept
describing corporate activities beyond profit-making and this term is increasingly used to
describe the role of business in society. CSR involves a broad commitment by companies to
social welfare and the common good and to the policies that support them. It involves not
just the products that a company manufactures but also being a good corporate citizen in
terms of the employees that it hires and the way it looks after them. It is also about protecting
the environment and getting involved in the local community and the wider culture in which
the company engages in business.
CSR activities as we seen through this research strongly affect the reputation of organization
and enhance its positive image in the society. As well as we have mentioned many CSR
activities of different and international organizations such as of Coca-Cola, GIVE by Warid,
Telenor, Nestle, EBM, Total, Mobilink, Tapal and PSO. All these examples show that CSR
activities are important.
CSR efforts are supported in mature and emerging markets, at the local, national and
international levels, and in partnership with a variety of stakeholders from the public and
private sectors. By investing in CSR, companies are investing in sustainability and broader
economic, social, and environmental goals. CSR remains a beaming light of success for
improving the role of business in societybut is also an ongoing challenge to which
companies must remain vigilant, especially in emerging markets.

49

Chapter 7
APPENDEX

50