Introduction
Corporate social responsibility refers to the ability of businesses doing well in terms of performance and at the same time doing well especially to in relation to the immediate environment (Campbell, Hollingsworth, & Lindberg, 1991, p. 5). CSR involves the process of aligning long term business strategies with operations to universally achieve sustainable and positive outcomes. The main beneficiaries of CSR practices by firms are clients, suppliers, shareholders, employees, and the environment with no particular meaning derived from the order. Practicing of CSR is an essential input by responsible firms. Firms all over the world are engaging in CSR especially due to the fact that competitors might be engaged in the same practice. Further, the numerous benefits, both direct and indirect, as derived from the practice are attracting many firms. Firms in Singapore have been actively engaged in adopting the practice in the recent years.
CSR Background
In recent years, there has been an increased awareness and consequently implementation of CSR strategies by business corporations all over the world. The increase in references and studies of CSR factors by scholars cannot be missed in the emerging works. Further, there has been an increase in the literature regarding CSR by scholars’ e.g. (McWilliams & Siegel, 2001; Margolis & Walsh, 2003; Orlitzky, Schmidt, & Rynes, 2003). The business world has not missed this factors as depicted in their response. For example, in a recent UN Global Compact-Accenture CEO study, a total of 93% of the close to 800 participant CEOs from all over the world, made a declaration that sustainability is a vital or very vital factor related to the endeavors of their organizations. Further, 81% of the participant CEOs asserted that they were actively involved in the designing of CSR strategies. In numerous respects, the emphasis placed by organizations on CSR undertakings has fundamentally altered the way we look at and comprehend the relationship between businesses, their institutional milieus, and vital stakeholders, such as employees, communities, suppliers, national government, and global society.
Research methodology
The research methodology that has been adopted is easily understood by any reader. It has further been outlined in a way that the research aim and objectives and also the statistical findings and analysis are not compromised. The research methodology has its genesis in the literature review segment where the analysis of existing and adapted modes of conduction in the subject of CSR is done. A diversified scope regarding the current level of CSR practice by firms in Singapore is also included. The level of CSR applicability in Singapore is also related to that of the rest of the world. The effective nature of questionnaire application has also been relevantly taken into account. Useful and important information has been gathered through strategically set out questions to authority in companies and also individuals regarding this research.
Scope and Limitation
The research is limited to the information as found in journals and textbooks as researched by previous scholars and researchers. This limitation is based on the fact that numerous elements and analysis are based on the facts, ideologies, and statistics of authors regarding the subject. This limitation is further enhanced by the fact that the writer is not an experienced practitioner in the field and therefore relies mostly on read facts. The analysis and recommendations are therefore based on the learnt rather than the crucial experienced elements in the discipline.
Literature Review
There has been widespread awareness by firms in Singapore regarding the implementation of CSR. Over the last four years, the subject has evidently gained popularity and most vitally consideration by companies. Since the creation of the Singapore Compact, there has been evident increase in the awareness and consideration of CSR. The Singapore Compact relates to a national society in the country that primarily backs and hence promotes CSR in the country. According to the Singapore Compact, CSR goes beyond the widespread perception that it is simple and tactical philanthropy or charity work.
Just as the Executive Director of the Singapore Compact puts it, there are many advantages of adopting CSR. Companies can easily reap enhanced profits and reap other numerous benefits. Mr. Koh Juan Kiat who is the vice president of the Singapore Compact further backs this notion. The former executive believes that adoption of CSR brings with it intangible advantages with the example of a good reputation for the company especially to the customers. This is also in line with other benefits such as enhanced morale among employees, improved performance, and attraction of investors.
In 2008, there was a survey carried out by the Ministry of Trade and Industry. The results of the survey indicated that up to 40% of companies based in Singapore were aware of CSR. More importantly, more than half of the respondents aware of CSR were already actively engaging in its practice. The organizations actively engaging in the implementation of CSR include large corporations, SMEs, federations, co-operative unions, and NGOs. Furthermore, more than 80 companies have signed up as signatories to the UNGC network in Singapore (United Nations Global Compact).
CSR adoption and implementation in Singapore is evidently not in its full potential. There are still a large number of companies that are not involved in seriously implementing or even considering CSR. Generally, CSR adoption is at its infant stages in the country. There are numerous reasons related to this situation. The public perception is one of the largest impacting aspects relating to the subject. Perhaps companies are not willing to take negative risks with the most essential part of the life of organizations. These are the clients.
Clients’ view towards firms in the country is now not just limited to the product quality as availed in the shelves. The clients are now deeply looking at the practices of firms and comparing them to their own expectations and wants. The issue of CSR is one such factor. Customers expect companies to be actively participating in ethical practices.CSR is a vital inclusion in the realm of business ethics. However, the number or percentage of clients who follow up on the practices of firms outside the provision of quality products is limited. Numerous clients do not know much about companies that they actively buy products outside that realm. Furthermore, some clients as collected from surveys do not even know the names of companies despite being regular purchasers and hence clients of the respective companies. Many individuals will point out that they do not have enough time to engage in investigating other practices of firms apart from the quality issue of products that they purchase. In other instances, clients point out that they will not question activities of firms if they are not being directly affected especially in regards to the environment. Firms have realized that there is a wide population of clients that is not interested in their co-curricular activities CSR inclusive. Some companies have therefore blatantly neglected practicing CSR.
Wrong perception and understanding of CSR in relation to business organizations in the country directly relates to the reduction of concern regarding ethics. CSR being an active ingredient of CSR, the perception of companies directly impacts negatively on the percentage of adoption of CSR in the country. As pointed out earlier, some companies tend to believe that CSR is a philanthropic or charitable act that is not mandatory (Mackey, Mackey, & Barney, 2007, p. 798). This notion has been thwarted by factual evidence and explanation regarding provisions of the Singapore Compact.
Existence of independent companies that are responsible for reviewing levels of CSR as adopted by business organizations are a very vital factor (Preston & O’Bannon, 1997, p. 402). As firms globally endeavor in creating or designing a range of CSR activities, they often bear in mind the close scrutiny of evaluating firms. There are important evaluators who are independent in this business realm (Greening & Turban, 2000). Kinder, Domini, and Lyndeberg are some of the independent agencies that are actively involved in the enhancement of awareness of CSR strategies. Such firms are involved in ranking and rating of schemes that have been adopted by firms in concerning CSR. It is a proven fact that inclusion of independent firms in instances of ranking and rating such as consumers report significantly enhance or influence the behavior of companies, or in the latter case, consumers (Sen & Bhattacharya, 2001; loannou & Serafeim, 2010). Investors can also be directly influenced positively with the inclusion of such firms (Becchetti, Ciciretti, & Hassan, 2007, p. 55; Rock, 2003, p. 34). Most importantly though, the firms themselves are directly influenced positively by the involvement of independent company raters (Elsbach & Kramer, 1996, p. 76; Espeland & Sauder, 2007; Chatterji, & Toffel, 2010)
Analysis of Findings
It was deducted from the conducted exercise research that lack of awareness among vital players in industries has contributed to the low scale of implementation of CSR activities in Singapore. Among other seeming stressing factors such as compressed funds, the issue of knowledge gained popularity as the main factor inhibiting the full potential of CSR. From the interview, it was clear that individuals did not themselves know much regarding the CSR activities of companies that they are clients. The consensus that management is responsible for implementation of CSR in the respective companies was reached.
In line with the factor of limited awareness, it is evident that numerous individuals only fairly know any private parties involved with implementation of CSR. This is mainly due to the limited number of such players in the market in Singapore.
The collected information from the questionnaire indicated that only a few companies in the country are actively engaging in CSR activities. To further strengthen this point of view, the aspect of little or no awareness was given as the connecting factor. However, of the few companies which have endorsed this activity, advantages such as supported brand names by consumers are enjoyed. Further, goodwill from clients of the companies is achieved.
The vitality of training as a mode of enhancing the limited awareness of CSR activities by individuals was a critical concern that was raised. This is an activity that is viewed as one of the most positive steps of ensuring that CSR is being implemented in the country in the long run. Lastly, it was noted that the inclusion of CSR activity in the interviewee company was crucial. This is mainly due the important activity of improving the brand name of the company as a promotional practice. Further, the positive aspect of enhanced revenues was regarded as a motivational factor of incorporating CSR activities in the company.
Conclusion and Recommendations
As has been depicted in the literature review section CSR is a vital practice that needs to be incorporated in undertakings by firms. It is evident that CSR is not in its full potential currently in Singapore. Being a developing country, there are numerous firms that are small sized in terms of operations and hence profitability. As pointed out in the analysis section, there is a direct impact that results from the size of firms in relation to the adoption of CSR. This is perhaps one of the biggest drivers to hindrance of full applicability of CSR in Singapore despite the level of awareness.
CSR application in Singapore is also affected by the response of the general public towards business organizations. As pointed out, there is little concern to consumers of products regarding the level of adoption of CSR by the companies that they profit (Lyndeberg, Marlin, & Strub, 1986). Numerous consumers admit to the fact that they are not even aware of undertakings of firms outside the quality issue of products that they consume daily. Firms have realized this factor and consequently taken advantage of it. Business organizations therefore tend to offset the funds that would be otherwise used in addressing CSR issues and probably use them in other sectors such as increasing the size of the business.
As discussed, some firm managers do not know the real outcomes and advantages of including CSR in their undertakings (Davis & Thompson, 1994, p. 140; Freeman, Harrison, & Wicks, 2007; Greening & Turban, 2000). The notion that this practice is a charitable and optional undertaking that is expensive to include is popular in the country.
The recommendations regarding inclusion of CSR in the undertakings of firms mainly lie in the issue of enhancement of awareness (Campbell, Hollingsworth, & Lindberg, 1991, p. 55). Firstly, it is recommended that there needs to be widespread educative forums regarding CSR and its advantages specifically. The notion that small sized firms have the option of disregarding this activity should be scrapped. Big corporations will therefore be in a position to easily carry out their undertakings with collective aid from the small sized firms. The perception of managers and other company heads can be relevantly altered to ensure that they are in line with the development of the environment through actively engaging in CSR. Already, such steps have already been carried out in the country.
The international Singapore Compact CSR summit is one such vital inclusion in the enhancement of awareness and consequent application of this activity. The summit has been the region’s premier in relation to a networking platform and educational aspect for leading professionals in vitally enhancing comprehension and awareness of CSR for sustainability and success in their firms. The summit often has meaningful and relevant themes such as “Strategy for Sustainability and Success” which was the theme for the 2009 summit held at the Orchard Hotel. Often, such timely conferences aid in bringing together experts from various sectors to aid in the addressing of international and regional trends in CSR. Further, they aid in the provision of opportunity for participants to network amongst thought leaders and practitioners, and also to benchmark against best practices that have been proved.
As part of the recommendation, it is vital that rewards in line with companies that have fully implemented CSR in the country be given. This process will aid in ensuring that the attention of firm managers is turned in that direction. A competitive platform aids in ensuring that the process is enhanced. This is also an activity that has been adopted in the country. Inaugural awards have been presented in various summits to the top companies regarding their contributions to CSR under categories such as: Green champion Award; Best Workplace Award; Community Developer; and Caring Employer Award.
Bibliography
Aupperle, K. E., Carroll, A. B., & Hatfield, J.D. (1985). An empirical examination of the relationship between corporate social responsibility and profitability. Academy of
Management Journal: 444.
Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review,
32(3): 77
Campbell, J. L, Hollingsworth, J. R.,, & Lindberg, I. N. (1991). Governance of the American economy. New York, NY: Cambridge University Press.
Chatterji, A. K. & Toffel, M. W. (2010). How firms respond to being rated. Strategic Management Journal, 31(9): 917.
Davis, G. & Thompson, T. (1994). A social movement perspective on corporate control. Administrative Science Quaterly, 39(1): 140.
Espeland, W. N. , & Kramer, R. M. (1996). Members’ responses to organizational identity threats: Encountering and countering the Business Weeks rankings. Administrative Science Quaterly, 41(3): 440.
Freeman, R., Harrison, J., & Wicks, A. (2007). Managing for stakeholders: Survival, reputation and Success. New Haven, CT: Yale University Press.
Greening, D. W. & Turban, D. B. (2000). The Impact of Corporate Social Responsibility on Investment Recommendations.
Ionnou, I. & Serafeim, G. (2010). The Impact of Corporate Social Responsibility on Investment Recommendations. SSRN Working Paper Series.
Khanna, T. & Rivkin, J. W. (2001). Estimating the performance effects of business groups in emerging markets. Strategic Management Journal, 22(1): 40-66.
Lydenberg, S. D., Marlin, A, T., & Strub, S. (1986). Rating America’s corporate conscience: A provocative guide to the companies behind the products you buy every day: Addison Wesley Publishing Company.
Mackey, A. Mackey, T., & Barney, J. (2007). Corporate Social Responsibility and Firm Performance: Investor Preferences and corporate strategies. Academy of management review, 32(3): 800.
Maignan, I. & Ralston, D. A. (2002). Corporate Social Responsibility in Europe and the US: Insights from Businesses Self-Presentations. Journal of International Business Studies,
33(3): 400.
Rock, M. (2003). Public disclosure of the sweatshop practices of American multinational garment/shoe makers/retailers: Impacts on their stocks prices. Competition and Change, 7(1): 24.
Preston, L. E., & O’Bannon, D. P. (1997). The corporate social-financial performance: A meta-analysis, Business and Society, 36: 422.
