"Companies that are breaking the mould are moving beyond corporate social responsibility to social

innovation. These companies are the vanguard of the new paradigm. They view community needs as
opportunities to develop ideas and demonstrate business technologies, to find and serve new markets,
and to solve longstanding business problems."

Rosabeth Moss Kanter, Harvard Business Review.

Creating a strong business and building a better world are not conflicting goals – they are both
essential ingredients for long-term success – William Clay Ford Jr. Executive Chairman,
Ford Motor Company.

The five driving forces of CSR are:

1.Affluence
4.Globalization
2. Communications
5.Brands
3.Sustainability

I think the main factor that is driving CSR today is the increased communications capabilities of
society. Companies can no longer hide things from the public as easily as they could before. With
social media being as prevalent as it is…..

anything that happens in a corner of the world can instantly be seen around the world
instantaneously. For example, Volkswagen was exposed manipulating emissions tests for diesel cars
and now they have totally backed out of the North America market. 30 years ago this could have
happened and a lot of people would not have heard it, but now if you ask anyone about this
incident and a lot of people are aware of it and now Volkswagen will have to be operating under an
umbrella of scrutiny for the next few years.

Part Two:750-Word Reflectionhttp://www.wsj.com/articles/how-wells-fargos-high-pressure-sales-

culture-spiraled-out-of-control-1474053044Section 1: What You Did for this discussion we were
asked to identify a current issue that illustrates the timeliness and the immediacy of CSR. For me I
picked an issue that hit close to home which was the Well-Fargo sales incentive scheme that
occurred during Q4 of 2016. As I said in the discussion, I worked at 8-month co-op at Wells Fargo
from Jan 2016-Sept 2016, in which I worked as a financial analyst and I really enjoyed my time
there. So for me to here that a scam rocked Wells Fargo and it dramatically effected the stock price
was shocking to me. For me the most effective posts/opinions you can have on broad topics are the
ones that you can relate to. Therefor it felt obvious for me to speak up about this issue.

Section 2: What You Learned by participating in the discussions I’m able to see that everyone has a
different opinion on the emphasis on CSR. For example, I think CSR is a huge part of
organizations today and CSR can be directly tied to company profits, their market cap, and
reputation. However, some people may not care that much about CSR because they are loyal to the
companies they are familiar with and that’s it. That being said, going forward companies are
beginning to realize the importance of CSR because it affects their relationship and trust with the
public. If companies are being publicised for shady business practices, or doing harm to the
environment, they will be fiscally damaged. Just take a look at Wells Fargo’s stock after their sales
incentive scandal for evidence.

Section 3: Connection to Theories in Textbook as I said in the previous section, CSR is becoming
increasing popular and this theory is supported in the textbook as well. “The History and Evolution
of CSR” defines a timeline of events that show how CSR has evolved into what we now know
today. If we look back 200 years ago, CSR was virtually nothing and non-existent. Firms did
whatever they wanted, whenever they wanted in order to enhance profits. I think this was partially
due to the lack of media coverage but that has changed today.
Amalric F. and Hauser J., (2005): Economic drivers of corporate responsibility activities”, Greenleaf
Publishing (Amalric) pdf www.csrindonesia.com/data/library/20070108064256.pdf

Although the concept of CSR is not a new one (Hopkins, 2004: 3), it is not fully embraced by everyone
and a lot more people happen not to even understand this concept. The commitment of resources of
corporate bodies towards social development issues has been with us for quite some time now but not
everybody shared this view or celebrated this concept. Prominent amongst them is one of the world’s
greatest economist; Milton Friedman. He did not believe that corporate bodies had should meddle in
social affairs; neither should they have any responsibility towards the community. As a strong activist of
capitalism and a critic of CSR (Idemuia, 2007), Friedman emphasized the need to ensure that corporate
bodies’ managers use the monies and resources of businesses in a way that is in the interest of the
businesses and nothing else (Friedman, 1970). For instance, he believes that if committing resources to
reduce pollution as a ‘social responsibility’ of the firm would reduce the profits of the businesses in such
a way that is not beneficial to the business, and then it should not be done. In his book Capitalism and
Freedom, Friedman is said to have referred to corporate responsibility as a “fundamentally subversive
doctrine”. It is a wonder that theorists like Friedman and his followers believed that corporate bodies
giving something back to the society that they have taken from should be considered subversive.
Although Friedman’s argument was strong and captured global attention, the upsurge of CSR has
continued. The proponents of CSR arguing on the basis that, over the years the social cost of businesses
has increases coupled with the fact that corporate bodies have gained much power and influence
(Idemuia, 2007). In these contexts of market failures, it has become imperative for businesses to pay
heed to social issues due to this increased vulnerability of society to the corporate entity. Again, the
growth of governments’ inability to fulfill their basic 30 responsibilities to society and to properly
manage business activities and the market structures of a free market society in order to avoid over
exploitation, means that the acceptance of social responsibility by the corporate world has become very
inevitable and important (Idemuia, 2007, Amalric and Hauser, 2005).

The concept of CSR is perceived differently by different people and organizations and is noted to be
“highly contextual in terms of corporate and national environment” (Broomhill, 2007: 6).

Broomhill, Ray (2007): “Corporate Social Responsibility: Key issues and debates”, Don Dunstan paper
no.2/2007, Don Dunstan Foundation, retrieved from
http://www.dunstan.org.au/resources/dunstanpapers.html

[accessed 10 May 2018]

In the past, many large corporations were seen to be insensitive to the needs of society and caused
much of the environmental degradation of the earth, (Utting 2005). Their ‘raison d'être’ has been how
to make profit and how to satisfy their shareholders as for instance argued by Milton Friedman (see
Friedman, 1970).
1.5.1 Sustainable Development Several people and institutions have defined sustainable development
in several ways but the most prominent one is the one by that emerged during Our Common Future.
During that conference in 1987, the Brundtland Commission defined sustainable development as
“development that meets the needs of the present without compromising the ability of future
generations to meet their own needs” (Brundtland, 1987: 43). Thus, development must not be short-
lived but must have long term goals. The idea of sustainability could be classified in a threefold concept;
economic, social and environmental sustainability. Thus, we must ensure economic and social growth
whilst respecting the environment in which we conduct these activities. The difficulty however, has
been how to ensure a balance in achieving these goals. That has always been a headache to most
development stakeholders (Adams, 2001: 72). Some proponents of development argue that poverty
compels people to over exploit their environment and put a lot of pressure on their environment in a bid
to develop (Brundtland, 1987: 68). However, in the fourth principle of the twenty-seven principles of the
Rio Declaration on Environment and Development, it is stipulate that sustainable development cannot
be achieved meaningfully if it is done in “isolation of protecting the environment” (Adams, 2001: 84) as
well as the pivotal role played by the indigenous people. The trick here is that the specific role to be
played by the indigenous people is unclear. So should sustainability cause people to remain in their
poverty? Today, sustainable development serves as a framework under which communities can use
resources efficiently, create efficient infrastructures, protect and enhance the quality of life, protect the
environment and create new businesses to strengthen their economies.

The Five Driving Forces of CSR:

Can You Name a Sixth?
by Leslie Back on Friday, May 6th, 2011

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I take little credit for the

intelligence of this post. Indeed, I give all that might be due to Werther &
Chandler’s 2011 text, Strategic Corporate Social Responsibility:
Stakeholders in a Global Environment, as well as to my Green Mountain
College MBA Triple-Bottom-Line Management Course, in progress.
Through these studies, the five below drivers have been articulated as
those most germane to the promotion of CSR, but I ask you, my favorite
TriplePundit readers, are there others? Have motivating factors been
missed? What else has brought us here, to this CSR “Tipping Point”?

The Five Driving Forces of CSR:

1. Increased Affluence: CSR becomes more relevant as economies

grow and stabilize. Therefore, the greatest attention to CSR is
found in developed countries. Stable work and security provide the
 luxury of choice and socially responsible activism. No such luxury
exists when basic needs are in question.

2. Ecological Sustainability: Perhaps the most obvious and most

talked about of the drivers, concerns over pollution, waste, natural
resource depletion, climate change and the like continue to fuel the
CSR discussion and heighten expectations for proactive corporate
action. After all, it is in the best interest of firms to protect for the
sustainable future the long-term availability of the resources on
which they depend.

3. Globalization: Globalization has had considerable impacts. First,

the increased wealth and power of multinational corporations has
led to questions on the decreased authority of the nation-state,
especially in developing areas. Further, cultural differences have
added to the complexity of CSR as expectations of acceptable
behavior vary regionally. With increased power comes increased
responsibility and globalization has fueled the need to filter all
strategic decisions through a CSR lens to ensure optimal outcomes
for diverse stakeholders.

4. Free Flow of Information: Yes, blame the bloggers, but through

the Internet and other electronic mediums the flow of information
has shifted back to the stakeholders, especially in the case of three
important groups: consumers, NGOs and the general media. Easily
accessible and affordable communication technologies have
permanently changed the game and only truly authentic and
transparent companies will profit in the long term.
 5. The Power of the Brand: Brands are today the focal point of
corporate success and much of the health of the brand depends on
public perception of the corporation. In other words, reputation is
key and honest CSR is a way to protect that reputation and
therefore the brand.

As reported by the aforementioned text, Malcolm Gladwell referred to the

tipping point as the point of critical mass after which an idea spreads
widely and becomes generally accepted and broadly implemented. I
argue that CSR has reached such a tipping point, pushed there by the
five above factors. I further argue that CSR will become more
mainstream and more part and parcel of everyday business strategy.
These five forces have brought us here and will continue to promote and
develop trends towards greater social responsibility on the part of firms.
But, are there others? Factors that have not here been considered that
have or will prompt this continued CSR evolution?

Leslie is a Sustainable MBA student at Green Mountain College. Study interests include
sustainability, social responsibility and the power of corporate and non-profit partnerships to
bring about positive change. Other areas of interest include social media, fundraising and public
policy. She holds a Certificate in Nonprofit Management and is certified in the Global Reporting
initiative for Sustainability Reporting. Additionally, she holds an MA in Organizational
Management and a BS in Leisure Management. On the rare occasions when she is not studying,
she enjoys writing, reading, running, nature walks and yoga. She hopes to use her skills, talents
and education to make a positive impact with an environmentally and socially conscious
organization. Feel free to connect with her on LinkedIn.

FOLLOW LESLIE BACK @TRIPLEPUNDIT

4 RESPONSES

1. Ian Edwards

May 6, 2011 at 10:46 am

Sure, there are other drivers of CSR. Along with those you mention — or
perhaps, refinements:

Threat of regulation: Many companies are managing long-term risk by

stepping up compliance issues related to sustainability — either current or
expected regulations.

Supply chain pressures: WalMart, Ikea, P&G, Timberland and other large
companies are forcing sustainability and CSR initiatives on vendors
through various sustainability indices and codes of conduct.

Opportunity to innovate: Sustainability and CSR are effective catalysts

for refreshing products and service and inventing new business
opportunities.

Cost containment: Lots of evidence that CSR and sustainability strategies

help to refine business processes, cut costs and improve margins. This is a
compelling point when selling the concept up to a conservative C-level
executive team.
 Cause marketing: You mention the brand-boosting powers of CSR. A key
pillar of CSR is strategic philanthropy — supporting and engaging a
cause or causes that are compatible with the company’s core values.
Many companies do this without having a CSR platform. For those
companies, it’s an easy step up to a fuller CSR commitment.

Log in to Reply

2. sanjay s. devkar

May 6, 2011 at 1:01 pm

UKEssays. November 2013. Five Driving Forces of CSR. [online]. Available from:
https://www.ukessays.com/essays/commerce/driving-forces-of-corporate-social-
responsibility-commerce-essay.php?vref=1 [Accessed 11 May 2018].

Five Driving Forces of CSR

Published: 23rd March, 2015 Last Edited: 12th June, 2017

Disclaimer: This essay has been submitted by a student. This is not an example of the
work written by our professional essay writers. You can view samples of our professional
work here.
Any opinions, findings, conclusions or recommendations expressed in this material are
those of the authors and do not necessarily reflect the views of UK Essays.

Keywords: csr driving forces, drivers of csr

CSR is the positive steps an organization takes in the way it functions, to give benefits to
the community, and ways in which it can return to the community from which it has
taken so much to get itself established. CSR is now internationally used tool to measure
and compare the firm's performances economically, socially and environmentally. The
idea is to build a sustainable business that benefits the market and communities. It does
this by maximising the benefits given to the local people like giving them work or
employment and caring for their health etc especially for those who live near the
factories. It cares for the community and the people. CSR does development work like
building the infrastructure like the roads so that the people also benefit on daily basis.

The important drivers include-

 Enthusiastic self interest

 Investment in the society
 Honesty with public
 Increased public expectations of business by contributing to the economy

Through these drivers a close loop between society is achieved and there is a better
understanding between the market and labor. By CSR organizations contribute to the physical
infrastructure and social capital is seen as the primary interest. Companies keep themselves
open to public; accountability to the public is reported, organizations regularly pay taxes to
stabilize the society. Iot takes some burden away from the government by helping build the
country. It serves the nation by developing its economy and infrastructure.
These drivers use strategy to give better services. They define the inventories/ business
case by analyzing the programs they approve and then charter approval is based on the
service portfolio and authorization. Chartering includes the communication and the
resource allocation. CSR is an important activity internationally because of the
globalization. Organizations who serve globally benefits from CSR.

The key driver is social investment, by engaging in public policy CSR drivers lead the
companies to good leadership and ultimate good business. Through these programs
there is better and closer relationship with the investors and the stakeholders.

The customers, benefits a lot and the communities grow by better and growing
economy.
(Source: http://positive outcomes.com.au)

CSR gives real business strategy. The survey made in 2002 by Ernst and Young show that
about 94% of companies believe in CSR. It influences about 70% of all consumers and
their purchasing decisions. Ernst and Young (environmental and sustainable services
principle state) Corporate Social Responsibility is now the basic factors that decide the
consumership and their choice with the companies.

The core drivers of CSR are:

 Growth in stakeholder exceptions.

 The responsibility for the supply chains.
 The decreasing role of the government.
 The pressure from the share holders.

Mr. Doug Miller 1999 conducted an experimental survey on CSR. Results indicated that
consumers wanted higher social and environmental goal.

The dying role of the state is an another driver or CSR because of the diminishing
participation of the state, the stakeholders are benefiting and their exceptions are rising.
Some basic drivers of CSR include:

The standard employees; companies must keep standard employee and employ them
on the basic of the quality of their work. With the competition in the market it is difficult
for companies because employees opt for companies that here better visibility and are
working for the sustaining communities. The IBR report (International Business Report in
2008 state that they were facing employee retention and this became the main driver
for CSR.

According the Moller, Jam Heltand from Great Thornton, Denmark " business ethics is
the key factor for recruitment and retention in Denmark is tight labour market, privately
held business ignoring CSR issues are facing future skills shortages that will threaten
their global competiveness.

Managing Cost: To be sustainable it is recommended that every company should ensure

that they keep their expenses as low as possible. By good operating procedures and
keeping a check on the quality the costs of the companies is examined. E.g to manage
the level of the toxic gases and the greenhouse gases like carbon dioxide is a challenge.
It accounts to a large cost of the country. The countries responded very positively o this
driver and engaged in CSR activities. Many countries like brazil rate this drvier one of the
most effective means to check the company's performance.
Brand building: Companies believe that if they involve themselves in CSR it will bring
fame to their companies. They will get famous and will get promoting. By involving
themselves in corporate social responsibilities companies get the positive wind from the
consumers. This drives the companies to work for the welfare of the people. Engaging in
social work rather than a public image becomes important as the company progress and
moves towards the global market.

Benefits by pay the tax, the company must pay the taxes and keep its system
transparent so that is comes into the public listing most companies desire to listed.

Case Studies: Different companies have different activities to keep their brand names up.

SAP: For public interest SAP focus on education and to keep the community involved
they educate people to spread awareness and keep the children away from youth
suicide. The organization facilities the communities by providing them with resources
like school based life skills to stop the people from committing suicide. To support these
programs Australia supports these agiences by providing staff and volunteers.

Sun Microsystems: A leading sponser of musica viva's first and only prime sponser.
Through making links with an IT industry it benefits musica viva by benefiting it through
giving it the opportunity of networking within the corporate sector resulting in opening
it to the sponsers. Musica viva get promoted as customers gain increasing awareness of
its activities and performances. Musica viva achievers its objectives of taking beauty and
music into the lives of ordinary Australians and bringing arts and the corporate world
together. It is like a mutual benefiter. Sun gives technical knowledge and help the
market to reach the musica viva and music viva provides it the chance to give the
community their culture back through giving them music.

IBM: To promote web based society, IBM makes and provides the training material for
education of web to the senior citizens. Other citizens that have knowledge of web pass
with computer knowledge.

HP: HP received a gold award from community chest of Singapore for raising millions of
dollars for charity in 2003. This fund raising increased the employee participation to
50%. They met their challenge by wearing gladiator costumes they set their goal of
competing with other IT industry leaders to raise charity. HP won it.

Microsoft: Working with the world food programs, save the children and mercy corps it
provides technical development assistance through the humanitarian empowerment
and response through technology. Throughout the world the organization are using
technology to spread humanitarian efforts.
Investor Relations: For ethical practice in CSR business the organizations good investor
relations and consider it an important factor of. Among other countries Vietnam is the
leading country keep that maintains good relations with its investors. It gives a lot of
importance to its investors.countirs like india ,turkey etc are emerging and consider it a
driving factor of success.they believe that the investors make it possible for the
company to meet the varying need of the customers.some countries donot think that
good investment is a main driver because some established companies can finance their
own efforts.such countries include developed contries like the Usa, Singapore japan and
the europeon countries.the countries donot really agree investor relation to be the
major drivor of CSR.The tactics used by the leading companies to engage the public is
that they do welfare programs. The use low cost programs o deliver the public goods
and accumulating the needs of the public and then meeting them in the market
demand. They work by reducing the cost as compared to the other companies and
meeting the quality due to the competition with other companies.Economies of scope:

Mostly the corporate companies try to give better products to the producer.mainly
these corporate firms have an established setup of the manufacturing industry.they can
supply the latest technology.this really assists them to have the ecomomies of sale and
makes their chance better of saling their product at a competitive price. Due to industry
and experience they have edge over other companies.this also benefits the consumers
because they don't have to try another product and risk with it.

External pressure from the investors and the consumers: Companies offer portfolios that
shelter the social considerations. They use social and environmental policies and use it
as a marketing tool. The companies study and take benefit from the market survey.
Benefits come to the investors when its capital increases and they are attracting more
stakeholders and not taking anything from the government by releasing its burden by
contributing positively to the country and making its economy healthier. The investors
donot pressurise the companies to practise CSR. They have to be convinces that CSR is a
powerful tool to build a healthy economy for a country and make it rich. Social funds are
minute and have to had much impact on the corporations. They can not exert pressure
on the share prices and influence the organization's attitude. Social funds can then also
claim that the investors have not really given them the considerations. There are no
clear evidences that can claim that there are differences between the two. It is a
question whether or not social funds can produce CSR outcomes. Social fund managers
compete with each other to find the investors and compete to keep investment criteria
thus acting like fund managers. Due to social pressure investment firms then comes with
the outcomes in the industrial sector. The social fund managers also focus on demands
like the ones that carry sustainability and recycling. This is termed as eco consumerism.
This helps them to capture the investors. This puts the pressure on the investors and
they have to act ethical and respond to the ecological demands and act as socially
responsible. Consumers also help promote CSR by making the appropriate decisions by
buying the product produced by the company that used the CSR practice. If the
consumers pay some insurance money regularly to the CSR brands the organizations
will get an incentive to work for the environment. The benefit the companies gain by
CSR compels the non users to also indulge in CSR practice.

Government pressure: With increasing awareness about industrial carbon footprint, all
corporations and entrepreneurs of all scale are trying to configure a newer, more eco-
friendly and more socially responsible setup for the overall workflow. Some corporations
tend to donate to environmental and social causes hence improving their business
reputation; others develop a team based on a variety of races and other social diversities
hence sending a message to the consumer eventually. This entire paradigm also tends
to secure a certain underwriting from related government bodies. Engagement of
government to these responsibilities not only ensures a health corporate growth but
also help the government to breach into the areas where its resources fall short. With a
given form of a government support, corporations offer a flexible working plan to its
employs and also tend to invest the available potential into areas like waste
management and energy efficiency, which finally benefit the government itself. So it
becomes a complex loop of collaboration and shared benefit. Phenomenon of global
warming has also been taken seriously by innumerable corporations, especially the ones
with higher carbon footprints. Their major production decisions take into account these
climatic changes and their policies are constructed around a socially and
environmentally sounder vision of society. Similarly, governments (especially agrarian
based societies) also endorse animal adoption- related corporate policies. Similarly
bigger (first world corporations) favor various support programs for children (especially
living in the third world) and there are health-related support groups as well. Apple for
instance launched a complete campaign of its products dubbed Product Red to endorse
African Aids victims. '

The corporate get the advantages from the CSR. They work to keep the society
flourishing and some work to keep their names high. There are many who get benefit
from the CSR: the company,the consumer, the stakeholders etc.

Tax advantage: The greatest incentive for the companies working and practicing CSR is
that they get exempted from the payment of tax to the government because they are
already doing a lot of good social work and keeping the environment sustainable. The
developing countries like India benefit a lot from it. Brazil is another country taking most
from this advantage. But this also implies that the organization's company should keep
transparency in their taxation and must also have standard employees. This then allows
them to be public ally listed.

Measuring corporate Social responsibility : It is very important to know the basics of

what you are going to do. And that is how you can achieve the task. Thing is how you
will know that how you have to do that. No one tells the rules and the techniques of
their way of work that makes their style copied by someone which degrade them. For
example if u have to prefer in two different types of working then what will you decide
in the two?

The company which treats with their employs harshly and give you a good product or

The company which treats with their employs softly and gives you a bad product.

Corporate Social Responsibility measures to apply international national regional

industry local and organizational aspects. And the characteristics are no unified
terminology no unified definition no defined content no overall standards.

On the other hand finance is also a major problem in controlling and measuring
corporate social responsibility. In different companies the financial rate is different and
the techniques to control the financial issues are different so the responsibility of
measuring varies on finance of the company if the finance is controlled and used
accurately will do better job then the company with the bad or uncontrolled finances. To
control the finances of the company one should see the expenses of the company and
use the expenses in a rite way at rite time. The way one could manage the finance of a
company is my announcing the social corporate responsibility investments. It also got
some problems in it different companies have different criteria of their own so every
company use their own aspects in making of social corporate responsibility investments.
To balance and control the financial reports audit is used to manage the accounts of the
company and to check the finances of the company. And to make the balance between
two companies one should give some rules on which the company should have to give
the answers about certain questions which can balance the two companies n make then
work in the same criteria. And also understand the way of increasing their work
objective to get the firm run in a better way. That is how a company or a firm or industry
can understand that what is the need of the people and what are the requirements of
the people and what they have to do or work on to get the required results. Every
company will have to see whether they are performing well in their field or not whether
they are giving the fine results to the people or not or whether these companies are
satisfying everyone including themselves. Big firms and industries have to see that they
must not be polluting the environment which is the biggest problem in industrial zone
now a day.
To manage all the things accurately the measuring corporate social responsibilities have
to work in on it hard. To balance the way of working and the importance of work
variably that what type of work needs more importance n what need lesser so that the
result would be overall balanced and relatively equal to all others. Check on the
managing the things done by the other companies that what are they doing and how
are they doing the aspect of their work as relevant to the other companies. To see the
equilateral input and output of the company as compared to the other company.

The advantages of indulging in CSR:

Economies of scope: It means that overall the production price for the company can
decrease if they increase the number of products produces that have similar raw
material. Using the some company name they can come up with various goods and
services. They can also work in collaborations with other firms that produce similar
products, and site near the source which manufactures the product. This is achieving the
economies of scope. Economies of scope are cost advantage because instead of
providing a single product and polishing it and making it better and special they can
increase their output. Economy of scope can also exist if the one company makes
various products under the same name with good quality and lower price than a group
of separate firms each producing a single product. Economies of scope can be achieved
when one input can be used to generate more variety outputs. This reduces the overall
cast. They exist in home healthcare, telecommunication etc. e.g the research team of
one company is capable of researching on a number of products ,their team work can
cut down the cost by producing a number of products. Most of the corporate
companies that have established their companies can offer better sale and advantage to
the producers because they have an established setup (factories, technology,
communication, transportation etc.). to help produce various products. They are able to
give the products cheaper than the others with a good quality as compared to the ones
who have stared their business and lack the experience. The companies with experience
as able to make best use of the raw material at less price and during the production
phase they waste little energy. They will have better graphics due to the skilled labour
and consumer study and better technology for the packaging as well. They save a lot of
money at the production stage and then they can pass some benefit to the users and
buyers.