Utilization of corporate and social responsibility (CSR) for

Company performance; case study of Pakistan Mobile

telecom

Introduction

The World Bank provides the following definition for this concept: Corporate
social responsibility is the commitment of business to contribute to
sustainable economic development by working with employees, their
families, the local community and society at large, to improve their lives in
ways that are good for business and for development (Topics in
Development, Corporate Social Responsibility, and www.worldbank.org).

Corporate and social responsibility (CSR) of Company is defined as

commitment towards the society and continuity of business practices, it is
also called Citizenship of companies (W. Timothy Coombs and Sherry J. Holladay).
Which means how companies are achieving particularly defined objectives
and goals by obliging social laws? In this research impact of CSR will be
optimized on Company performance inside and image outside the Company.

Corporate and social responsibility is an emerging issue and some companies

call it boundaries or limitations for the achievement of company objectives,
i.e. Taxation, govt: regulations, health and safety, diversity, the environment,
ecology and the labor standards. Such issues are called social responsibilities
for companies to be fulfilled necessarily by companies because; companies
share in the economy of countries either in boosting up or declination.

Being socially responsible does not only mean fulfilling legal expectations,
but also going beyond compliance and investing more into human capital,
the environment and the relations with stakeholders (Green Paper). CSR
generally refers to the compliance with legal requirements, and respect for
people, communities and environment (Elian, 2005).

There are other certain corporate and social practices that need to be
fulfilled by companies because those practices impacts the Company image
on customers and performance such as, Environmental sustainability,
Community involvement, Social awareness and education, Industrial
relations and ethical marketing practices.

CSR as the interrelated link between society and organization, where the
organization behaves in a way that build a balance between its main goal of
maximizing profit and between achieving the welfare of the whole society
and all its stakeholders. (Hani H. Al-Dmour and Hayat A. Askar).

Companies keep large pool of money with them and utilize for more money
creation. Now, raises the idea of money making and the social laws violation
by companies? To stop or to nullify the violation of human laws the
governments impose limitations on companies. In contrast, companies
formulate and expose CSR policies in papers, where as in reality, those
boundaries are hardly fulfilled by companies i.e. factories should hire local
labor or manufacturing firms should reduce level of environmental pollution
or they have to stop infiltration of toxics acids in drinking water routes,
canals etc.

This research is focused on mobile communication sector due to certain

reasons, like today almost every person is knows about mobile phone and
particular mobile phone services providers. In this regard, if we see globally
mobile phone services providing companies are increasing day by day.
Mobile phone services providing companies working globally are from rich
countries and franchising is on peak since start of millennium. Rich countries
focus in business enhancing strategies besides franchising and heavy
financial donations for business growth. Therefore this research is Pakistan
based and will be closely focusing on those mobile phone services providing
companies which are totally or partially run by foreign donors i.e. Telenor,
Zong a china mobile company etc.

Pakistan is developing country where social issues are frequently seen and
left unresolved, therefore, it will useful to take an analysis of mobile
communication services providing companies corporate and social
responsibility. It will be worth to know that, how many companies are using
CSR as tool of differential advantage or which companies are still by passing
this issue.

To find out the utility of corporate and social responsibility (CSR) on Company
performance mixed methodology i.e. qualitative and quantitative will be
used which includes interviews and survey questionnaires. In this research
gap will be how much and up-to what level Pakistan mobile communication
companies are utilizing the corporate and social responsibility in the
economic share.

Multiple methodology was followed and data were collected out of 35

questions distributed to 350 questionnaires sample size. Different types of
analysis were employed to test the research hypotheses; independent and
one-sample t-test and correlation

Qualitative methods yield results that are rich, detailed and in-depth, provide
many quality ideas about the research topic. Qualitative methods can yield
how stockholders feel and what they think about? This method will be used
to collect data through statistical analysis from mass population interviews
from managerial level of Pakistani mobile communication services providers.
Quantitative, surveying a large group of people and Using a structured
questionnaire contains close ended questions, or forced-choice questions.

Literature review
Since decades CSR was taken as chunk of pure philanthropic actions to boost up the
social development of any country or state. Now it has not only become doing
things right but, it is appeared doing things for the betterment of company inside as
well as outside. Corporate social responsibility is now jumped from ideological study
to the realistic study in economics, human resource management and business
management studies. Since positive impacts of CSR are identified, it is proved
business as well as social development helpful subject.
Maignan et al. (1999) while conducting a research on business benefits of corporate
citizenship found that 88% of
consumers like to buy from socially responsible corporations while 76% showed their
willingness to switch-over to
those brands which belong to socially responsible organizations.

Giant or small medium enterprises, companies, factories, organizations which play

strategic developmental role in society are seriously focusing, understanding and
managing the scope of corporate and social responsibility CSR. The current state
of CSR development reflects the influence of various theories .i.e. institutional
theory, the resource-based view of the firm, stakeholder theory, stewardship theory
and the theory of the firm (for a review, see McWilliams et al. 2002; also refer to
Carroll 1979; Wartick and Cochran 1985; Windsor 2006), which results in various
conceptualizations of CSR (Pinkston and Carroll 1996; Snider et al. 2003).

BCG supports companies around the world that want to improve their social impact
and also improve the benefit to their business through CSR initiatives. We take a
holistic view, incorporating economic, social, and ecological aspectslooking
beyond just the functional aspects of the issue. (Boston Consulting Group 2009).
Such theories helps the understanding of CSR development from 1930 to
embryonic stages and hitherto importance of CSR for companies, employees
and for society. Some studies examine important research in CSR literature and
identify critical research gaps (Carroll 1999; Garriga and Mel 2004; Lee 2008;
Secchi
2007). Researchers have proved the macro level impact of CSR that, it
enables companies and organizations to meet the stakeholders obligations
like employees, venture capitalists, governments and shareholders as well as
debenture holders.

Companies are increasingly exposing the CSR activities in annual

performance reports on their specific websites as well as in business
magazines for two reasons. And those two eye catching reasons are skilled
employees retention and the multiplication in market share. Previously
outside the companies or organizations CSR actions were given more
importance, now employees are also taking interest in CSR subject to know
the ethical and legal obligations of company for employees.
Such evolutionary development of corporate ad social responsibility CSR is
explicitly identified and described by Ferrell and Carrol. According to them
employee right, working conditions and future security should also be dealt
with in company ethical and legal concerns, because employees are the only
stakeholders responsible for profit generation and profit maximization for
companies.

Generally, corporate responsibility (CSR) stands behind Company business

purposes and object. Based on these criteria companies are including
corporate and social responsibilities into mission statement and milestone
statements, i.e. TELENORE, MOBILINK, etc. Matter of fact is companies
directly deal with profiteering and money making activities, and due to cost
cutting ideas companies do not follow properly certain policies, rules and
regulations which cause social hazards. He has defined corporate and social
responsibility is emerged as an innovative perspective of strategic business
through which academies develop by practicing the CSR policies (Friedman,
1970; Reich, 2007; Zadek, 2004).

In developing country like Pakistan people have started focusing ethics

related issues in this perspective CSR can assist as a strategic tool to
strengthen the corporate image of companies in the eyes of customers. In
Pakistan telecommunication industry is in growth the corporate and social
responsibility (CSR) concerns of those companies are attracting more
customers, which help Company to generate more revenue to be in the
industry and face the competition. Multinational and national companies has
started showing particular CSR activities through media and official websites
to increase and capture more target market.

For example, Telenor Pakistan believes in conducting its business in a way

that creates shared value for all relevant stakeholders. Working under our
values we strive to make best use of the business we are in to facilitate and
support societies around us. Mobilink believes in playing an active role in
supporting the community and social development of Pakistan. Our
Corporate Responsibility goes beyond philanthropy and donations whereby
we take into full account the impact that Mobilink creates on all stakeholders
and on the environment when making decisions.

Under Corporate Volunteerism Program, employees of ZONG recently visited

Chambeli Institute of Mentally Challenged Children and Physiotherapy Center
located in Satellite Town, Rawalpindi. The Institute has around 50 special
children enrolled in it and has a staff of 20 people to manage and help with
these children.

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.

Ufone continuing with its tradition of being there for Pakistanis in time of
crises, recently devised and carried out a flood relief activity for the flood hit
areas of Dera Ghazi Khan and Rajanpur.

This concept supports host country besides productivity and profit, the
companies should obey citizenship laws share in the economic boost up. In
other words companies by providing job opportunities to local people can
reduce rate of unemployment and poverty in the country and in the same
way when companies donate in the education and health of the nation can
increase the rate of development of the economy.

In Pakistan, multinational companies firstly started working on CSR concept

to help to boost the economy of host country. After that, national companies
realized the value of CSR and started implementing this concept and gained
enough response in terms of social development and Company image
building.

Therefore, Corporate and social responsibility (CSR) of Company not only

help Company to build market image but, CSR itself is an strategic tool to be
used as differential advantage for companies to compete and prevail in the
industry, i.e. Telenor providing cellular services is multinational company
working in Pakistan, earned sound market share even it was introduced after
Mobilink was at that a giant company with huge cellular services market
share. Telenor not only provided quality services but also focused on
corporate and social responsibility strategies.

In telecom sector of Pakistan hardly five companies are providing cellular

services since a decade, and growing concerns for those companies is that
they are not keeping in view the income level or purchasing power of local
people. More than enough charges on call packages and unknown reduction
from balances have made life miserable of people. Such practices put strong
negative impact on company image.

Companies keep large pool of money with them; therefore, companies utilize
it for further revenue generation. Here arises the concept of money making
and when money making practices observed the violation of social laws are
experienced by companies. To stop or to nullify the violation of human laws
governments impose laws on companies.

In contrast, companies formulate certain boundaries to obey and fulfill social

laws i.e. factories employ local people or manufacturing firms reduce level of
eco-pollution or they stop infiltration of toxics acids in drinking water ponds
etc.

In other words, this notion of environment and social friendliness is

maintained by Company which goes environment friendly by reducing
environmental spoiling. Companies focus on social welfare through free
education for people or percent sharing in employment of economy which
helps to reduce poverty.

There are several benefits for companies on following Corporate and Social
responsibly (CSR), obeying industrial and labor laws of states the Company
niche market share of Company increases which is directly proportional to
the revenue generation for companies.

On utilitarian ground of Company, employees working for Company can

easily be retained which impacts positively and increases the productivity of
the Company. One serious concern of CSR is employee, a very important and
precious asset for any Company, if employees are well known the basic
notion of CSR then employees will play vital in promoting company image.

A recent global survey of 1,122 corporate executives suggests CEOs

perceived that businesses benefit from CSR because it increases
attractiveness to potential and existing employees (Economist, 2008: 13).
This idea curtails that, CSR also impact inside conditions of the Company and
claim them responsible for the Company productivity. Employees maintain
Company environment sophisticated for any progress and growth, and when
employees are trained to follow strongly social norms its become easy for
the Company to focus totally on CSR policies in and outside the Company.

This suggests that individual levels of Company identification may influence

social exchange, and subsequent processes, triggered by CSR, may affect
social exchange dynamics within companies, CSR as a continuous
commitment of a business behave ethically to trade (Flynn, 2005; Lawler,
2001; Molm & Cook, 1995; Molm, Peterson, & Takahashi, 1999).When
companies at large oblige social norms and values the life of employee
improves along with profit generation for companies this chain further
enhance company market image and reputation that help company to grab
larger enough market share (WBCSD, 1999).

Above results have shown that CSR also help Company to capture huge profit
margins, and Apart from profit making Company also successfully save costs
by retention of skilled employees through philanthropic approach.

Although in the field of human resources there is little work done on CSR but
the available literature shows that CSR helps companies to win in
competition on talent because companies can use CSR strategically to
differentiate themselves from their competitors. There are working evidences
that Companys image as a good corporate citizenship attracts volatile
employees and motivates existing labor.

By implementing corporate and social responsibility CSR as core factor to

compete in the industry it retains skilled labor and knowledge employees
which enhance capacity for innovation in the Company.

Thinking is being developed that government cannot solve all

social issues with scare resources alone and it needs private-public partnership to address
the social development
issues. It is seen that customers and employees stay more loyal due to philanthropic
activities of a firm. (Dr. Suleman Aziz Lodhi et al. 2008)

When CSR is used as strategic tool by companies, the employees remain

motivated and this policy becomes the strategic advantage for the Company
to reduce the unwanted incidents inside Company. In addition to CSR
programs for employees, environmental stewardship could also help create
reputation advantage in the marketing and financial aspects (Miles and
Covin, 2000). Companys socially responsible practices send a positive signal
to potential workers. The workers, in turn, are likely to get identified with a
responsible Company, especially if their values correspond with promoted
practices (Strand, Levine & Montgomery, 1981). Environmental policy
demonstrates that employees support is necessary to secure effective CSR
programs and policies (Ramus & Steger, 2000).
Recent research has shown that the
business organizations benefit from CSR activities as well since they enhance their image
among their customers and increase their attractiveness to potential and existing employees.
As a result, CSR initiatives have become an integral part of business practice, regardless
of the organization's type of markets, and the businesses now allocate hefty amounts in
their annual budgets to make what they call it as 'investment' in the social service areas. ( Rizwana
Bashir et al)

Recently, social responsibilities of corporations have often been discussed in

terms of corporate citizenship and sustainable development. The concept of corporate citizenship caught fire in the
1980s
and1990sinthecontextofthefailureofwelfarestatesandtherisingpowerofmultinationalcorporations ( Mele, 2008).

In this research, the Company environment, pay structures and reward

systems will be analyzed which keep strong impacts on employee
commitment for companies.

Research gap
As this research topic shows that mobile communications companies are also
strong stakeholders in the economic development, therefore it will be worth
to know how corporate and social responsibilities (CSR) are overcome by
Pakistan based mobile communication services providers.

Research question
What is extent of corporate and social responsibility (CSR) within mobile
communication industry in Pakistan and how it could be utilized?

Objectives
To study CSR practices of mobile telecom companies

To identify the CSR practices of mobile telecom companies in

accordance with law

To examine the CSR best practices

To propose a framework for Non CSR companies

Research outcome
Corporate and social responsibility will develop image of the Company,
through which Company performance can be enhanced.

Methodology
Mixed methodology will be processed to conduct and complete this research,
which includes qualitative and quantitative methods. Qualitative
methodology includes face to face interviews from executive and managerial
level employees of mobile communication services providers.

In quantitative research methodology, survey questionnaire method will be

used to know the essence of this research and impacts.

For Primary data collection purposes interviews will be conducted from

Company executive and managerial level employees. On the other hand to
collect secondary data websites, journals and magazines will be preferred to
complete this research.