Integrative Theories of CSR

 

The integrative theories are focusing on the integration of social demands. The integrative theories’ approaches are (a) public responsibility that describes as law and public policy that takes as a reference for social performance, (b) stakeholder management that balances the interest of all stakeholders of the company, and (c) corporate social performance.

 

It argues that business depends on society for its continuity and growth and even its continuance of business itself. It is focused on the detection & scanning of and response to, the social demands that achieve social legitimacy, greater social acceptance and prestige.

This group theories have four approaches: Issues Management, Public Responsibility, Stakeholder Management and Corporate social Performance.

3.1 Issues Management

The process by which the corporation can identify, evaluate and respond to those social & political issues which may impact significantly upon it

Social responsiveness ie..the  action, the how of CSR is the focus in this approach.

Gender inequality, food wastage, terminal diseases, pollution, climate breakdown, unreal beauty standards, stereotypes, natural calamities, scarcity of natural resources, war, religious conflicts, illiteracy, corruption and more are “few” of the ongoing issues that we face at a global level. The corporation identify what issue is needing immediate attention and significant for it in the given context.

Eg. Rugmark initiative

3.2 Public Responsibility

Public Policy includes not only the literal texts of law & regulation but also the broad pattern of social direction reflected in public opinion, emerging issues, formal legal requirements and enforcement or implementation practices

Scope of managerial responsibility:

Primary

Essential task of the firm such as locating and establishing its facilities , procuring suppliers, engaging employees, carrying out its production function & marketing products

Secondary

Come as a consequence of primary. Eg.., Career & Earning opportunities for some individuals etc..,

3.3 Stakeholder Management

This approach is different from the stakeholder theory of CSR which is normative in nature.

Principles of stakeholder management

The central goal is to achieve maximum overall cooperation between entire system of stakeholder groups & objectives of the corporation. The most efficient strategies for managing stakeholder relations involve efforts which simultaneously deal with issues affecting multiple stakeholders.

Goal of Stakeholder Management

The goal is to integrate groups with a stake in the firm into managerial decision making.

3.4 Corporate Social Performance

Carroll, who first introduced the concept of ‘corporate social performance’ applied in his ‘Pyramid of Corporate Social Responsibility’ that, understanding the ‘economic responsibility’ is to do what is required by global capitalism, ‘legal responsibility’ is to do what is required by global stakeholders, ‘ethical responsibility’ is to do what is expected by stakeholders, and ‘philanthropic responsibility’ is to do what is desired by global stakeholders (Carroll, 2004). This theory maintains that business, apart from wealth creation, also has responsibilities for social problems created by business, or by other causes, beyond its economic and legal responsibilities. This includes ethical requirements and discretionary or philanthropic actions carried out by business in favor of society.

Carroll (1991) stated that, “The implementation of these responsibilities may vary depending upon the firm's size, management's philosophy, corporate strategy, industry characteristics, the state of the economy, and other such mitigating conditions ...”

 The following two tables show the CSP model in its operational aspects in different perspectives

 

Principles of CSP		Process of Social Corporate Responsiveness		Programs and Policies for managing Social issues
Economic Legal Ethical Discretionary		·         Reactive ·         Defensive ·         Responsive ·         Interactive		·      Issues management

Watrick & Cochran (1985) CSP Model

Operationalisation of CSR is highlighted in these theory, although models differ  

Principles of CSP		Process of Social Corporate Responsiveness		Programs and Policies for managing Social issues
·         Institutional ·         Organizational ·         Individual		·         Environmental Assessment ·         Stakeholder management ·         Issues management		·         Social Impacts ·         Social Programs ·         Social Policies

Wood(1991) CSP Model in terms of processes.

The triple bottom line (TBL) offers a way to measure some of the effects of CSR programs . TBL is a measure described in 1994 by John Elkington, a British business consultant ((Figure)), and it forces us to reconsider the very concept of the “bottom line.” Most businesses, and most consumers for that matter, think of the bottom line as a shorthand expression of their financial well-being. Are they making a profit, staying solvent, or falling into debt? That is the customary bottom line, but Elkington suggests that businesses need to consider not just one but rather three measures of their true bottom line: the economic and also the social and environmental results of their actions. The social and environmental impacts of doing business, called people and planet in the TBL, are the externalities of their operations that companies must take into account.

The three components of the triple bottom line are interrelated.

 

The TBL concept recognizes that external stakeholders consider it a corporation’s responsibility to go beyond making money. If increasing wealth damages the environment or makes people sick, society demands that the corporation revise its methods or leave the community. Society, businesses, and governments have realized that all stakeholders have to work for the common good. When they are successful at acting in a socially responsible way, corporations will and should claim credit. In acting according to the TBL model and promoting such acts, many corporations have reinvested their efforts and their profits in ways that can ultimately lead to the development of a sustainable economic system.