786 ‫ﷲ‬ ‫ﷴ‬

Criticism against Corporate Social Responsibility

Notion of concept CSR is based upon the standard that companies do posses one more
accountability than just making earnings. Each company has a liability in the direction of
the society, its-people and the environment as well. At the same time, a lot of authors
presented views against the CSR such as in the view of Badaracco (1995) business entities
should mainly focus on increasing earnings on invested capital by financers, whereas social
concerns type work should be left to the government. By Van (2003) there is one and only
one social responsibility of organizations is to employ their resources and engage in actions
designed for the purpose of increasing their level of profitability so long as it stays within
the rules of the game, which is to say engages in open and free competition without
deception or fraud. A manager who uses a firm's resources for non-profit social purposes is
thought to be diverting economic efficiency and levying an "illegal tax" on the organization
(Balabanis). Coors & Winegarden (2005) proposed that those who take on the neoclassical
model of business would follow the view that the only social responsibilities that a
corporation can have are to provide employment, pay taxes and mainly to maximize its
profits; therefore, maximize its shareholders value.

1
786 ‫ﷲ‬ ‫ﷴ‬

Corporate social responsibility in SMEs

Many key characteristics distinguish CSR policies in SMEs: a lack of codification of CSR in
SMEs (Jacobs & Singhal, 2010); personal motivations prevail over others motivations such
as marketing approach, strategic or public relations approach (Holton & Glass, 2010).
Generally, when a firm engages in social responsibility activities the owner-manager is the
primary person responsible to develop and implement CSR activities. The involvement of
the firms in local communities affects the choice of the firms to focus on socially
responsible behaviors (Fleckinger & Glachant,2011); the importance of social capital and
informal relationships for the success of the firms – which is closely linked to their
reputation – represent an important input to act with honesty and integrity (Lyon &
Maxwell,2011); the central role played by human resources in small firms generates a high
commitment of the corporations in employees and their employee’s families’ well being
(Kreidler & Joseph ,2009); the industry in which the firms operate directly affects their
approach to CSR (Holton & Glass ,2010).
The nature of CSR implemented in small and medium-sized firms is mostly tacit. So, small
businesses are sometimes assumed to perform poorly in socially responsible activities
(Hassan & Harahap, 2010). This is a consequence of the characteristics which distinguish
SMEs from big corporations, which adopt formalized and more structured CSR systems.
This confirms the different nature SMEs and large corporations (Holton & Glass, 2010).
Furthermore, the academic work on small firms is limited (Roca & Searcy, 2012). To fill this
knowledge gap in the CSR – SMEs relationship, Kreidler & Joseph (2009) suggested that
there are four main contextual problems (definition, assumptions, clarity and method) that
should be addressed to further improve the knowledge of the phenomenon in a SME
context. Many of these problematic points can be addressed by better investigating the
managers’ perceptions of the phenomenon, the nature of socially responsible activities
developed, and the link between these and the competitiveness of the firms (Lyon &
Maxwell,2011).

2
786 ‫ﷲ‬ ‫ﷴ‬

Stakeholder theory
Stakeholders are such entities which directly or indirectly get influenced by activities and
actions of companies in a market (Son & George (2013). In modern business era companies
try to fulfill their ethical obligations also for polishing their brand image. Undregiven pictre
reveals stakeholders of companies in a market .

Picture 1

Quite a few authors such as Storey (2011) stated that main and only function of business
entities is to generate as much handsome profits for their investors as possible, whereas
work related to ethical concerns should be left for the government to do in a market.
Though majority of authors stated that companies need to fulfill their ethical duties not
only for benefiting their stakeholders but also for increasing their level of earnings (Son &
George, 2013). Since last couple of decades a variety of theories ad frameworks came into
existence which indicated the significance of CSR theme, and stakeholder theory is one of
them,

3
786 ‫ﷲ‬ ‫ﷴ‬

References

 Agarwal, S. (2015). Corporate social responsibility in India. SAGE Publications India.

 Anupam S & Ravi K (2012) “Corporate Social Responsibility Initiatives of Major
Companies of India with focus on health, education and environment”, African Journal of
Basic & Applied Sciences 4(3):
 Badaracco, J.L. Jr. (1995), “Business Ethics: Roles and Responsibilities”, Harvard
Business School Publishing, Boston.

4
786 ‫ﷲ‬ ‫ﷴ‬

 Bartholomew T & Brown J. (2012). Mixed methods, culture, and psychology: A review
of mixed methods in culture-specific psychological research. International Perspectives
in Psychology: Research, Practice, Consultation, 1,
 Bhupender K & Vikas J (2012) “Issues and Challenges of Corporate social responsibility
in India”, IJIBF, Vol.2, No. 2, July-Dec.2012,
 Chnadra, P (2012). Corporate Social Responsibility is no longer just an addition, it is a
key differentiator." CMD, BASF South Asia
 Coors A & Winegarden C (2005), “Corporate Social Responsibility or Good Advertising?”
Regulation, spring, 10-11.
 Derrick T. (2011). Corporate sustainability performance measurement systems: a
review and research agenda”, Journal of Business Ethics, 107(3),
 Dey M & Sircar, S. (2012). „Integrating corporate social responsibility initiatives with
business strategies: a study of some Indian companies”, The IUP Journal of Corporate
Governance, vol. XI(1),
 Engel M. (2007), Mixing methods: reliability and validity across quantitative and
qualitative measures of relationship Quality: In Small M.L.
 Fleckinger P & Glachant M (2011). Negotiating a voluntary agreement when rms self-
regulate. Journal of Environmental Economics and Management 62(1),
 Gelo O & Benetka, G. (2008). Quantitative and qualitative research: Beyond the debate.
Integrative Psychological & Behavioral Science, 42,
 Hanson W Petska, K. (2005).Mixed methods research designs in counseling psychology.
Journal of Counseling Psychology,
 Hassan A & Harahap S (2010), “Exploring corporate social responsibility disclosures:
the case of Islamic Banks”, International Journal of Islamic and Middle Eastern Finance
and Management, Vol.3 (3),
 Holton I & Glass J. (2010). „Managing for sustainability: findings from four company
case studies in the UK precast concrete industry”, Journal of Cleaner Production, 18/2,
 Jacobs W & Singhal V (2010). An empirical investigation of environmental performance
and the market value of the firm. Journal of Operations Management, 28 (5),
 Jorge A & Deepa A (2011), “Corporate Social Responsibility in India: Approach, Drivers
and Barriers”; Journal of Corporate Governance, Vol.11,

5
786 ‫ﷲ‬ ‫ﷴ‬

 Keyton J (2001). Communication research: Asking questions, finding answers. Mountain

View, CA: Mayfiel
 Kreidler N & Joseph M (2009), how green should you go? Understanding the role of
green atmospherics in service environment evaluations. International Journal of
Culture, Tourism and Hospitality Research, 3(3),
 Krishna S & Radha K (2012) “A view on corporate social responsibilities in India”, The
Economic Challenger, No.14, Issue research methods , April-June
 Levy S & Gendel H. (2012). “Does advertising matter to store brand purchase intention?
A conceptual framework”. Journal of Product & Brand Management, 21(2)
 Lyon P & Maxwell W. (2011). Greenwash: Corporate Environmental Disclosure under
Threat of Audit. Journal of Economics & Management Strategy 20(1):
 Lyon, T & Maxwell W. (2011). Corporate Environmental Disclosure under Threat of
Audit. Journal of Economics & Management Strategy 20(1):
 Maclagan, P.W. (1998), “Management and Morality”, Sage Publications, London.
 Magnusson P & Zdravkovic S. (2014). “The spill over effects of prototype brand
transgressions on country image and related brands”. Journal of International
Marketing, 22(1),
 Malhotra M & Grover V (1998). "An Assessment of Survey Research in POM: From
Constructs to Theory." Journal of Operations Management 16(4):
 McGuire B & Schneeweis T (2008), Corporate Social Responsibility and Firm Financial
Performance”, Academy of Management Journal, Vol.31 (4),
 Roca L & Searcy C. (2012). “An analysis of indicators disclosed in corporate
sustainability reports”, Journal of Cleaner Production, 20(1),
 Silva B & Menon, (2011). Influence of social media marketing on brand choice behaviour
among youth in India: An empirical study. In ICTBM Proceedings. Paper presented at the
International Conference on Technology and Business Management, Dubai (pp. 28-30).
 Son J & George B, (2013). “Consumers' purchase intention toward foreign brand
goods”. Management Decision, 51(2),
 Storey D (2011) ‘Optimism and chance: The elephants in the entrepreneurship room’,
International Small Business Journal, 29(4):

6
786 ‫ﷲ‬ ‫ﷴ‬

 Wang E (2013). “The influence of visual packaging design on perceived food product
quality, value, and brand preference”. International Journal of Retail & Distribution
Management, 41(10)