Academic journal article Asian Social Science

Exploring Performance Based Practice of CSR in Sustaining the Relationship between Business and Society: A Literature Review

Academic journal article Asian Social Science

Exploring Performance Based Practice of CSR in Sustaining the Relationship between Business and Society: A Literature Review

Article excerpt

Abstract

The evolution of thought in sustainable development theory often implies that societal contribution of businesses in the form of corporate social responsibility (CSR) leads to sustainable development in the relationship between business and society. However, most of the propositions made by CSR scholars have been described as being normative and prescriptive in nature. The implication of this is that the process through which outcomes are generated from the implementation of CSR lacks adequate exploration and has remained relatively unknown. To explore the problem noted above, a literature review was carried out. The need for a paradigm shift from responsiveness paradigm to a performance based paradigm in the practice of CSR was observed. A performance based paradigm entails the generation of expected outcomes from the implementation of CSR through creating value alignment between business' values and stakeholders' values. From the literature review, three recommendations were generated. They include the need for a shift towards a performance based paradigm of CSR, need for the exploration of the interactive process in the relationship between business and society, and the need for more empirical based studies with focus on the interactive process of CSR as a means of predicting CSR outcomes.

Keywords: sustainable development, corporate social responsibility, corporate social responsiveness, corporate social performance, business and society, stakeholder theory, petroleum industry

1. Introduction

Theoretical efforts towards exploring the means through which sustainable development practices yield outcomes in the relationship between business and society has consistently pointed towards the need for businesses to ensure their profitability, while instilling social contributions to the society and preserving the environment through which natural resources are generated (Elkington, 2004; Carroll, 2009; Aras & Crowther, 2009; Claydon, 2011). It has often been posited that the adherence to these sustainable practices by businesses enhance their relationship with the society (Aras & Crowther, 2009; Elkington, 2004; Claydon, 2011). However, this position has been challenged by practical occurrences in the Nigerian petroleum industry.

Most of the Oil Companies in the Nigerian petroleum industry have adopted the practice of making socio-economic and environmental contributions towards enhancing their relationship with the society. Companies like Shell and ExxonMobil among others have embedded the principles of sustainable business practices in their policy frameworks. They function towards this direction by boasting about extensive efforts towards social, economic and environmental sustenance of their host-communities, while making profit (Ibok & Mboho, 2011). However, these practices have not generated sustainable development for these Oil Companies and their host-communities. This is evident in the constant conflict between these Oil Companies and their host-community stakeholders, which results in disruption of business activities, and the destruction of lives and properties in the society (Chukwuemeka & Aghara, 2010; Jike, 2004; Paki & Ebienfa, 2011).

It has been noted that generating sustainable development goes beyond adherence to sustainable practices. It is observed as being beyond mere instilment of social, economic and environmental values by businesses (Bhattacharya, Korschen, & Sen, 2009). It involves a deeper assessment of the process through which these contributions are made and a shift of focus towards a performance dominant paradigm in both theory and practice.

In this paper, it is argued that the explanation of the dysfunctional phenomena in the Nigerian petroleum industry can be understood from the misalignment between advancements in theory and practice of sustainable development. In other words, this implies that Oil Companies in the Nigerian petroleum industry may adopt particular sustainable business practices that are theoretically obsolete and ineffective, which results in the unsustainability of business and society in the industry. …

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