A Case Study At The HSBC

A Case Study At The HSBC Chapter 1 Literature Review 1.1 Overview of Corporate Social Responsibility The notion that business has duties to society is firmly well-established, despite the fact that in the past there has been a revolution in the way people view the relationship between business and society. Numerous researchers suggest that companies which indulge in corporate social responsibility obtain consumers’ positive product and brand evaluations, brand choice, brand recommendations, good attitude to firm, good image of the firm, purchase intention and even enjoy a premium price. Spurred at least in part by such evidences, more companies than ever before are backing CSR initiatives such as corporate philanthropy, cause-related marketing, minority support programs, and socially responsible employment and manufacturing practices with real financial muscle. Not surprisingly, this trend is also reflected in the pervasive belief among business leaders that CSR is an economic imperative in todayâ₠¬â„¢s national as well as global marketplace. However despite the increasing importance of CSR, there is little research available about CSR’s impact on consumers. According to Yoon (2003), it is not clear when and how CSR activities influence consumer evaluations. Recent researchers have suggested that a CSR activity might backfire on the company if the consumers have become suspicious and infer that the company’s true motive for the CSR activity is only to improve its image to sell more products without trying to act for the sake of consumers 1.1.1 Defining Corporate Social Responsibility According to Kotler (1991), Corporate social responsibility is about doing business in a way that maintains or improves both the customer’s and society’s well being; Fombrun and Gordberg (2000)’s point of view is that, corporate social Responsibility is something that no sane chairman should be without. On the other hand, Petkus and Woodruff (1992) believe CSR i ncludes both avoiding harm and doing good. Corporate social responsibility is viewed as a company’s commitment to minimize or eliminate any harmful effects and maximizing its long run beneficial impact on society. Corporate social responsibility activities include numerous factors; namely meeting customer expectations, demonstrating commitment to environmental responsibility, improved environmental performance, staying ahead of the legislation, and increased employee motivation. Mohr, Webb, and Harris (2001, 47) define CSR as â€Å"a company’s commitment to minimizing or eliminating any harmful effects and maximizing its long-run beneficial impact on society.† Though, Angelidis and Ibrahim (1993) define corporate social responsibility as corporate social actions whose purpose is to satisfy social needs, Lerner and Fryxell (1988) suggest that CSR describes the extent to which organizational outcomes are consistent with societal values and expectations. While some view CSR as an obligation, others, namely: Enderle & Tavis (1998) define corporate social responsibility as â€Å"the policy and practice of a corporation’s social involvement over and beyond its legal obligations for the benefit of the society at large†. 1.1.2 Dimensions of Social Responsibility The dimension of social responsibility was propounded by Carroll (1979). It was proposed that organisations have to have 4 pillars that must be fulfilled to be good corporate citizens. They are: Economic Dimension. Economic responsibility is to be profitable for principals, by delivering a good quality product, at a fair price, is due to customers.