Effectiveness of CSR in Achieving Sustainable Development

metier of CSR in Achieving sustainable DevelopmentCHAPTER I1. groundingCorporate affable state (CSR) is a concept that has acquired a spic-and-span character in the ball-shaped economy. With the advent of globalization, managers in unlike context of uses read been exposed to the notion of CSR and atomic number 18 creation pressured to adopt CSR initiatives (Jamali and Sidani, 2008 330).thitherfore, even much(prenominal) corporations ar increasing conscience astir(predicate) the importance of unified their testify interests and the interests of parliamentary procedure by victorious state for the pertain of their activities on employees, suppliers, customers, communities and different stakeholders as fountainhead as the surround.Although, this is an obligation that goes beyond stintings or law, and in which companies wealthy person to act ahead in pursuing massive endpoint goals that bear to a fault be good for the party and the surround as a whole.Intrinsica lly related to the topic of CSR is the protection of the purlieu for future genearned run averagetions through sustainable actions. Not solo beca commit there has been an vast technological progress that means we ar not as much(prenominal) dependent as decades ago of a wide range of vivid resources much(prenominal) as air, energy, land, and minerals.On the contrary, driven by the growth of the race and the hectic globalization, competition for those natural resources has been in hug drugse. As a result, this competition withal brought a powerful driver for both environmental conflicts and damage to our fragile, life-supporting environment.A range of environmental disasters, such as climate change, oz unmatched layer depletion, and discolouration contamination, have been occurring a grand the quondam(prenominal) decades and which turned organizations and association to a greater extent than witting of practice such as recycling, energy consumption, preservation, amon g others.Evolving from an attitude of simply reacting to such disasters and their effects on the physical environment, somatic concerns now include strategic planning and looking at the environment in its multiple accessible, cultural, political, and institutional dimensions (Enriquez and Drummond, 2007 75).Therefore, the instruments of corporative citizenship turned besides to the preservation of the environment as a strategic element for enterprises in the whole world. Along with the developing for part of the organizations of slap-up technologies, there is as well as the concern in getting a kibibyte image, which put organizations sustainable activities into practice calling for an Eco clientele.E exceptionally in the foregone two years, 2008 and 2009, the world was marked by a financial crisis that had an impact in economies of organizations in general. Nevertheless, the financial crisis is not ca victimisation firms or governments to part with sustainable development. In fact, many descent and government suggest that a green solution can be found to both economic and ecological challenges, creating in the raw jobs and markets by investing in new forms of energy, redesigning or retrofitting buildings and equipment, and managing forests and other ecosystems sustainably.Mineral industries, for example, atomic number 18 using the effective crisis on their protest benefit, attempting to find out domains where actions be required and trying to shape a different future to this industry, winning advantage of the actual scenario. To achieve that they shew physical accomplishment of available data and schooling to appreciate the tap sectors impact, prominent support to finality makers in their strategic choices.The actions of Alcoa Inc., for example, are fulgurant and unique, the union interplays among intangibles as leadership and innovation as well as a strong CSR dodge, wisingly aligning society, growplace and environment, productivi ty, and financial performance in the context of a traditional manufacturing company.This project research examines the existing writings in an attempt to create a more comprehensive side of what has been written about the topic of Corporate societal obligation and sustainable Development. The projects approach was qualitative in nature and focaliseed on discovering what researchers and springs have explored and understand about this complex subject.Besides, it looks at both(prenominal) of the principal favourable and unfavourable arguments to the accessible righteousness of enterprises, specially when they are being considered by multinational enterprises interested in initiating activities into developing countries, with focus into Brazil. We also propose round alternatives of acting in the area of fond business made by Alcoa Inc., considering the present-day(prenominal) Brazilian reality, with the aim of achieving Sustainable Development.This dissertation is divided in two parts. Part one ordain be establish in secondary data and involves Chapter II, which comprises the writings review that examines existent work in current trends involving the subject of CSR as well as paradigms as SD in order to help establish what value associated indicators could contain.Chapter III, the explanation of the methodology gived along the development of the project.Part two, comprises Chapter IV, which examines factors involving Alcoa Inc., taking into account its current CSR and SD actions and strategies, making use of a questionnaire, firmness of purposeed by few of the organizations managers, in coincidence to the issues encountered in the literature.Chapter V, will grow conclusions, make future recommendations and points out gaps for future research.1.2 explore TitleThe Effectiveness of Corporate well-disposed state as a means of achieving Sustainable Development a case study of Alcoa Incorporation.1.3 Research BackgroundIn the modern complex and dynamic byplay environment, about organizations are adopting a global attitude making sure that they are geared for being global. Furthermore, it is common admitledge that the world is constantly developing and changing and no change is permanent because any change is about to be get on adjusted in the short or long run to beseem the environment and the challenges they face.Organizations are now more powerful and have more influence in the society. Therefore, The notion of merged cordial accountability immediately functions as an emblem, that the company themselves rise towards a consensual well-disposed renewal that will eventually benefit all the stakeholders of our society (Habish et al, 2005 271).Corporate social responsibility intrinsically relates to environmental issues faced globally, especially in the archean stages of the twenty- early century and sustaining in a particular industry has drive very difficult task for many businesses.Employees, investors and c onsumers are becoming progressively more aware of the social and environmental impact to people and planet that a company produces, which are both positive and negative. As consumers shape even more aware of sustainable practices, there will be even greater implores for business communities to do the right thing, requiring enhanced respectable leadership and CSR to drive profits, and brand loyalty (Mamic, 2004 Leffel, Sweeney, 2007 cited by Maass, 2007 36)Alcoa is the worlds leading maker and manager of primary aluminium, fabricated aluminium, and alumina facilities.In the good example of sustainability, Alcoa is considered one of the top three companies in the world in statuss of payload to sustainable development and has made use of an environmental outline associated with a truthful social responsibility in order to gain belligerent advantage and success in the marketplace. For example, for three years the Company has been sponsoring the Internethos program, direct at the development of Corporate companionable Responsibility for Sustainability (www.alcoa.com).Moreover, Recognition from the covalency Ethical Ranking drives the company to intensify actions of engagement of strategic publics. In 2006, the company was indicated as world leader in morals, in the mining and metallurgical Industry, accord to Covalence Ethical Ranking (Alcoa annual report, 2006/2007 41)1.4 Research Aims hit the books how in collective social responsibility can ensure matched advantage and success in achieving sustainable development. To explore, analyze and identify the use of environmental strategy as a tool of achieving global success. Analyse the importance of achieving sustainable development in todays global environment.1.5 Research Objectives To evaluate, in an environmental perspective, the effectivity of merged social responsibility in todays global business. To evaluate, in an environmental perspective, the effectiveness of corporate social responsibilit y on achieving sustainability. To establish the feasibility of using corporate social responsibility within the industry to align strategic planning with sustainable development. To break and find out the implications of corporate social responsibility in Alcoas Inc. environmental management. To identify the extent to which the environmental management is involved in strategic planning at Alcoa Inc. To identify how classic is environmental sensitivity to a company that extracts natural resources. To analyse in depth the integration of sustainability to Alcoas boilers suit business giving emphasis to Brazil. To investigate practices used by Alcoa Inc. in its implementation of corporate social responsibility as a means of achieving sustainable development.1.6 principle of the projectThe objective of this project was to gather information that could be utilizable and benefit different organizations in engaging in environmental strategies by the concept of corporate social respons ibility. Moreover, data perk uped can also guide corporations by providing them with an understanding of sustainable development and the resources they can make use of to establish a sustainable future for society and the environment. The information gathered for this present(a) work was collected through an extensive literature review as well as the use of different sources of information, such as videos. In addition, a questionnaire was used in order to collect insight information on the organizations management perspectives and its corporate social responsibility strategies for a sustainable development and prosperous business.CHAPTER IILITERATURE REVIEW2.1 Introduction loving Responsibility actions are examples of a phenomenon of great proportions, which have been taken into more consideration in the business world, and glint a new world-wide configuration. Historical recent events, in special environmental catastrophes around the ballock, essential the academic discussion on the social paper of organizations, public and private, in the construction of the called sustainable development.Investors originated from richest countries have been realizing that sparing survival and social balance is a long-term phenomenon more and more dependent of a constant soaking up with levels of development of the least favoured areas of the globe (Parker, 1998).In the context of globalization, fond Responsibility has started to be understood as an essential instrument to be considered by organizations strategists in the sense of paying(a) attention to the social demands of several economical agents involved. Apart from the internationalization strategy adopted, multinational enterprises installed in developing countries are under pressure in adopting an honourable and responsible posture. Meantime, many actions carried out by multinational enterprises, through their deliver foundations or partnerships with topical anesthetic agencies, have been questioned for di sregarding the lodge of local actors in the decision handlees, in the resource allocation and in the valuation of results.2.2 Business Ethics and Corporate friendly ResponsibilitySome nimble critics and Marxists tend to dismiss the link between business and ethical motive (Shaw, 2009 2). For example, It was astray assumed that business and ethics were radically different and that honest deportment had little or no return on investment (Brenkert, 2004 188).However, on current days, ethical issues are being one of the just about master(prenominal) subjects concerning organizations across the world, which now view business ethics not only in terms of administrative conformity with legal standards, rules or regulations as they used to do in the past. Some corporations are even creating their own written and positive ethical codes in addition with the use of different systems, like corporate social responsibility, to help them to create and maintain an ethical organization f inishing.Accordingly, Shaw affirms, Business ethics thus involves studying the slipway to improve and reinforce the implicit norms of the business system (Shaw, 2009 3).Nevertheless, Corporate Social Responsibility is topic of great value in business ethics, as reinforced by Ghauri and Cateora (2006 468) Ethics and social responsibility go hand in hand.Organizations are increasing conscience about the importance of matching their own interests and the interests of society by taking responsibility for the impact of their activities on employees, suppliers, customers, communities and other stakeholders as well as the environment.Kotler and Lee (2005 161) argue, The early ethical duty of business is to do not harm. Companies are responsible for minimizing stakeholders risks. This is the heart of business ethics.In fact, when ethical issues come to the organization field, a question is raised Of all these stakeholders, which should or will have the most or least influence over the et hical rules that will be applied by the organization? (Buhalis and Laws, 2001 88)Despite of all the suggestions given in recounting to CSR and business ethics, Jones et al (2005 19) points out the fact whether business ethics will actually make business more ethical.In a current globalized environment, companies play an important usage in the social social structure and more than ever before, are being encouraged to improve their business practices by emphasizing ethical behaviour, not only through the development of new technologies only when also through social and environmental initiatives.Companies are increasingly being held accountable for their actions, especially with the growth in demand for higher standards of corporate social responsibility.Sims (2003 8) links the concept of ethics and social responsibility saying that Being socially responsible, ethical, and a good corporate citizen is important to meeting and exceeding the expectations for any organizations stakeho lders. And affirms organizational management that truly cares about business and corporate social responsibility is proactive rather than reactive in linking strategic action and ethics.The structure of society has changed due to globalization changes, and the importance of businesses impact in society forced organizations to rethink their actions towards profitability, also promoting the development of concepts like sustainability.Nisberg (1988 43 cited by Kilcullen and Kooistra, 1999 158) gives an important definition of business ethics, which according to the author can be be as a set of principles that guides business practices to reflect a concern for society as a whole art object pursuing profits. However, with the relentless pursuit of profit in this actual globalized situation, how to maximise profit and act as an ethical company at the same time?A good understanding of what exactly is the term Corporate Social Responsibility is essential in order to answer and explain th is question through different perspectives and theories.2.3 History and Definitions of Corporate Social ResponsibilityThe history of Corporate Social Responsibility can be compared as being as old as the history of business however, its concept has not been fully formulated until now (Asongu, 2007 28 stretch forth et al, 2008).May et al (2007 4) also adds Questions regarding the nature, scope and impact of organizations have been present into various forms for centuries ranging across the classical, medieval, mercantile, industrial and corporate eras.Taking into consideration only the period after the Industrial Revolution, or better saying the 20th century, the first author who directly getd to the responsibility issue was Clark (1916 210 cited by Secchi, 2007 351) when he affirmed that The old idea of melt will is giving way to determinism, soulism to public control, personal responsibility to social responsibility.During the period of 1930s and 1940s, called as the corporate period references about social responsibility can be found, for example Chester Barnards, The functions of the Executive (1938) and Theodore Krepss Measurement of the social performance of business (1940). ( stretch et al, 2008).Murphy (cited by Crane et al, 2008), on the other hand classified Corporate Social Responsibility in four eras as follows Philanthropic era (up to 1950s), awareness era (1953 to 1967), issue era (1968 to 1973) and awareness era (1974 until now).According to Secchi (2007 348), however, One of the first attempts at classifying theories on CSR (business and society issues) was made by Preston (1975).This shows that the concept of CSR has been discussed for long however in fact, has not yet been fully understood and pose among organizations.Recently, empirical research about Corporate Social Responsibility and its relation to Corporate Social Performance and Sustainability provokes many contradictions in the literature. Due especially to the occurrence of diff erent scandals among enterprises as well as the movement towards an environmentalist society rather than materialist, warlike works class market and shrinking utilisation of government, there were a rise of interest in Corporate Social Responsibility in the past decades (Carrasco and Yakovleva, 2007 15-16).Many authors affirm that business and society are interrelated entities rather than being distinctively separated (Kotler, 2005 Wood, 1991 cited by Moir, 2001).According to Watts et al (1998 3 cited by Yakovleva, 2005 12) Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well of the local community and society at fully grown.Corporate Social Responsibility, thus, reflect the responsibility or accountability of organizations in pro not only of its stakeholders but also of its surrounding environment, taking into considerat ion the various practices that can affect those.Carroll (1979), on the other hand, proposed a four-layered concept, which was the most accepted model, suggesting four corporations responsibilities related to their economical, legal ethical and beneficent aspects.All those four aspects are of great meaning to the CSR concept, however, our current work focuses more on the top of the pyramid, which encompasses the philanthropic responsibilities.Philanthropic responsibility stake in doing good for society, regardless of its impact on the bottom cable television service is what is called altruistic, humanitarian or philanthropic CSR. giving back time and cash in the forms of voluntary service, voluntary association and voluntary giving is where most of the controversy over the legitimacy of CSR lies (Shahin and Zairi, 2007 755)According to Carroll, the philanthropic responsibilities are discretionary being, therefore, less important than the other categories on the other hand, as verbalize before, is the one that brings the most controversial issues.The definition proposed by Gauri and Cateora (2005) follows the same idea, where the mapping of a company in the society goes beyond its economic goals.As we can see, definitions relating CSR are various and contradictory among the literature which makes its study more exciting.2.4 Corporate Governance and Corporate Social ResponsibilityGovernance is defined by Dam et al (2007 1333) as the set of informal arrangements that are used in handling the consequences of these unforeseen states of the world.As a result of globalization, different global arrangement structures have emerged, transforming the CSR concept more difficult to be understood.This new global institution brought about the participation by firms in tasks that used to be the governments domain. (Cutler et al., 1999 Scholte, 2001 cited by Albareda, 2008). Corporate Social Responsibility, therefore, can be seen as a new governance arena (Haufler, 19 99 Scholte, 2001 cited by Albareda, 2008 434).Castka et al (2004 cited by Shahin and Zairi, 2007 761) proposed a useful framework, based on three major assumptions(1) The CSR framework should be interconnected into business systems, objectives, targets, and performance measures.(2) The governance system, whose purpose is to control, provide resources, opportunities, strategic stress of the government and be held responsible for doing so, is an integral part of business consequently CSR system.(3) Central to the CSR framework is the transformation of stakeholders needs and expectation into business strategy, where the organisation has to balance the need for CSR from their key stakeholders with entrepreneurship.Corporate Social Responsibility is considered measured governance, however, influenced directly or indirectly by demands from global civil society, Non governance Organizations, or even the government itself. Thus, Corporate Social Responsibility plays a major role in the global economic and political activities of corporations.To exercise this political power in international society, companies as private authorities have adopted different mechanisms. The most important of these have been inter-firm concerted instruments, fundamentally through the creation of CSR business associations (Albareda, 2008 434).The implications of poor corporate governance for peoples lives are tremendous, either in a developed or in a developing country, like Brazil for instance. nearly of the Brazilian corporations are still dominated by a family-owned management, who are therefore, the main, if not the only shareholders of the company. This fact can interfere severely in the potential of corporate governance. Brazil is a country with strong high-and-mighty traditions, and inadequate corporate governance laws make it possible to perpetuate dictatorial and concentrated influence over governance structures (Oman, 2003 35).Nevertheless, especially in the past decade s, there has been intensification of businesses in relation to governance and sustainability in countries like Brazil.Paro and Boechat (2008 533-534) adorn it One of the most significant Brazilian non-governmental organizations with the specific mission to ride companies around this issue the Ethos Institute of Business and Social Responsibility, founded in 1998 had 1,266 appendage companies in November 2007. Around 74 Brazilian companies have published reports based on the Global Reporting Initiative guidelines (GRI, 2007), and the Sao Paulo Stock Exchange (Bovespa) launched in 2005 its own Corporate Sustainability Index (ISE), which now has 32 companies listed.Well-managed corporate governance can have positive effects on socio-economic development it also hence sustained productivity growth and reforms on regulatory practices, although its benefits cannot be taken into consideration without strengthening the examination of business practices and the government environment as a whole.2.5 Building Corporate Social Responsibility into systemCorporate and business strategy according to Foss (1997) has different meanings in relation to the kind of decisions to be made. The first relates to decisions that determines the companys goals and objectives, the latter though, determines how the company will survey itself in relation to its competitors, defining its business and resources.McManus (2008 1069) affirms The term strategy is derived from the Greek Strategia or generalship, sometimes translated as the art of war. The parable of business as war, a competition to be won, is pervasive.The first author who actually exposed the link between strategy and Corporate Social Responsibility was Michael Porter. He argues that corporate social responsibility can be a source of innovation and competitive advantage if incorporated into the framework of analysis that companies use to guide their business strategy (Porter and Kramer, 2006 cited by McManus, 2008 1077).Co rporations have now added value-creation to their core business always considering its stakeholders needs to develop a strategy that is going to keep the company in a competitive advantage position. This is what drives a company to strive in management initiatives, especially if those initiatives are driven towards the achievement of sustainable development.Lee (2008, cited by McManus, 2008 1075) argues, There has been an evolution in CSR from the macro-societal level to the organizational level, with a greater emphasis on managerial, strategic, and ultimately financial issues to the point that the key issue in 2008 is how to integrate CSR into ones core business.Organizations integrated to societal aspects are trying to be aware of the implications of the environment they are in and building, therefore, its strategy based in a social/environmental mission and vision.On the other hand, recent reports reveal that almost six out of ten organizations have no strategy for CSR while many companies are unreadable as to how to adequately anticipate which social issues will affect their overall strategy (The Work Foundation, 2002 McKinsey and Company, 2006 cited by Galbreath, 2009 109)The importance of keeping the integration of a companys core business and its strategy according to the societys (stakeholders) needs determine the effectiveness of a business and its position in the marketplace.Galbreath (2009 122) also draws a model of corporate strategy in relation to the society as followsimageFigure 2 Source scheme in the context of society (Galbreath, 2009 122).Not only the strategy itself, but also a change on the decision-making framework plays an important role. The use of the classical American pragmatic decision-making is one example. The use of pragmatic decision making would inherently lead to the consideration of ecological issues within the decision-making process while fostering competitive advantage (York, 2009 102)In conclusion, as McManus (2008 1068) says, Perhaps, the sterling(prenominal) contribution of the mash-up CSR and business strategy will be, not in the detail of particular approaches to its realization, but rather the change in consciousness of individual business people its emergence may signal.2.6 Leadership and Corporate Social ResponsibilityThe first important point in the leadership context is to understand that ethics is not something we born with. Many authors say that along the years we are taught by the community conventions, norms, and regulations that guide our ethical behaviours (Trevino and Nelson, 2004). The same occurs with an organization, where norms, regulations, and values are drawn along the years, guiding their employees and creating its culture, but in this case, the founder has a crucial position, being the one who first underlie most of the organizations ethics code.Another important issue consists in how hierarchy of power is distributed in the organization this is explained because the ru n of integrity and moral actions always comes from the top to the bottom of the organization hierarchy and this explains why the founder plays a key role in creating the culture and guiding decisions. This relates to the called learning theory, where leaders are perceived as role models. (Hind et al, 2009)Daboub et al (1995 cited by Hind et al, 2009 8) developed a model which suggested a relationship between the characteristics of an organizations top management team and corporate irresponsibility, even criminality. The model holds that, other variables being equal, the greater the proliferation of formal management qualifications (e.g. MBAs) in a top management team, the higher the chances of corporate criminality. The implication of this is that management educators do not seem to be addressing the current and future developmental needs of managers who are required to respond to changing social norms for higher ethical, accountable, and sustainable standards in business.2.7 Volunt arism and Accountability of CompaniesThere are two contradicting views in the role of voluntarism in CSR The first view is support by Carrol and Buchholtz, (1999 cited by Yakovleva, 2005 14) and suggests that CSR refers to both types of corporate operations operations towards compliance with legislation requirements and voluntary operations towards social benefit not stipulated by law or economic requirements. The second view, however, suggests that the firm itself should call for the stakeholders interest voluntarily and considers that CSR starts when law ends (Yakovleva, 2005 14).All those contradictions are part of the inconsistency in defining the term CSR. Corporate Social Responsibility according to Keinert (2008) is concerned to how corporations tackle external pressures responding to them accordingly. Moreover, she adds It does not question the rightness of social expectations from an ethical, theoretical point of view, but seeks way of implementing them (Keinert 2008 45)Ap art from this point of view, corporations are responsible, nowadays, alongside the government, to the interests of its employees and society as a whole being also accountable for its actions. Thus, accountability is another important feature of Corporate Social Responsibility.Zadek (2007 10) argues embracing accountability for their actions, corporations contribute to addressing societal needs and challenges in ways that could also deliver economic value and success.According to the IPEA (Instituto de Pesquisa Econmica Aplicada), Social Accountability 8000 is the first norm turned to the improvement of the conditions of work, including the principal labour rights and certifying the fulfilment through independent auditors. The Social Accountability International LEAVES-, a non-government organization created in 1997 in USA, developed it and which has its action turned to the preoccupation of the consumers for the conditions of work in the world. The norm follows the standard of the I SO 9000 and of the ISO 14000, which makes its introduction easier for enterprises that already know this system (www.ipea.gov.br).One of the basic propositions from social accountability favourable to the present-day(a) point of view is based on Keith Davis ideas (apud Certo Peter, 1993 281 cited by Souza, 2004 31). According to them, enterprises must operate as an opened system with two hands, with information answer from society and opened advertisement about their operations with the public. (Souza, 2004 31) In system with this proposition, the enterprise must be disposed to hearing the society and working in the construction of its well-being.2.8 Corporate Social Responsibility and ProfitabilityWhilst some authors defend Social Responsibility as a solution for organizations and societys sustainability issues in the long-term, others are emphatic, affirming that it is not reasonable to imagine that the