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Word Count- 1846/PIN-10119

Rethinking of Corporate Social Responsibility and Social Entrepreneurship

In the 21st century business industry, the corporation‟s social role has been the current issue

irrespective of business type and local area. Linkage between the society and business has

been more and more tighten and at the same time, corporations get higher expectation for

doing business related to the social benefit. Nowadays, the key factor to be successful is

mutual management, which means that corporations have to concern and interact with

political, legal, cultural circumstances, and even rival within the same industry. Corporations

that are only looking for their own benefit will have a hard time to stay in business. That is

why, study about CSR (corporate social responsibility) and social entrepreneurship has been

developed.

There are two main waves of these studies, one is study for the legitimacy, and specifically

what the definition is, who serve these concepts and scope of actions. The other is how to

implement these two concepts into reality. Carroll (1979) made fundamental study about CSR

according to the historical research and presenting four-part definitions. He said

“corporations had to be judged not just on their economic success, but also on non-economic

criteria.” (Geoffrey, 2001) During that period, social entrepreneurship also became an

interesting topic to study with CSR. Since, the main actors of CSR are entrepreneurs, and

social entrepreneurship has more specified norms that can give actual guide to CSR users.

From this ground study, there have been several trials to define CSR and social

entrepreneurship, and these concepts have come into widespread. However, so far, CSR has

some ambiguity regarding concepts and controversy to the legitimacy, so it still has been

modifying. In addition, current global economic-crisis brings up difficult circumstances to

concern social goods when corporations manage their own business.

This paper is dealing with rethinking the definition of CSR and social entrepreneurship,

describing problems that might emerge and elaborating it with possible solutions. It finally

will find out barriers about these two concepts and develop proper remedies for that.

The definition of CSR is still up to date, as well as, debates and criticisms are going on.

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However, trial to arrange the concept based on the last studies about CSR is on progress.

Corporate social responsibility has broadly contains what „good‟ or „desirable‟ business

behavior is. It plays linkage role between corporations and several complex constituents for

sustaining development that has a long-term vision with society. According to Carroll (2000),

there are four dimensions to explain CSR: economic, legal, ethical and philanthropic. It

seems like CSR‟s development process starts from the basic purpose of corporation is related

to the economic responsibility, CSR‟s roles are extended to follow legal duties, legal

responsibility and overcoming legal boundaries is ethical responsibility. In the end, it reaches

to the philanthropic responsibility, which is included in voluntary sector. This paper indicates

that CSR has to contain all these four characteristics, and creating balance between these

dimensions is the main task that has to be done by a leader. About the application, CSR has

three steps to be implied by corporation: decision, adoption, and commitment. Each step

requires appropriate support by a leader. (Nada K, Andrew P, Linda Lee, 2007)

The social entrepreneurship is the concept developed from entrepreneur who works with

the objective of creating positive social change rather than „mere‟ profit. “Classic

entrepreneurship is creating and managing vision and communicating that vision to other

people. It is about demonstrating leadership motivating people and being effective in getting

people to accept change. Hence, social entrepreneur who serves social entrepreneurship has

distinct characteristics from classic entrepreneur. Social entrepreneurs motivate people to

maximize social value, do the not-for-profit activity, make organizational form based on

egalitarianism, avoid competitive strategy but focused on creating and delivering social value,

have broad stakeholders, interact with wide group of parties, finally have altruistic ethical

reflection.” (Wickham Philip A, 2006) As compare to classic entrepreneurship, social

entrepreneurship is that has more widened scope about non-profit and social sectors. But, it

also contains dilemma that how it can satisfy both social and economic goal like CSR.

Innately, entrepreneurship does not exist in sector of business. It has more broaden area and

mainly included in voluntary works so business entrepreneurship is part of that. Social

entrepreneurship is more welfare concept not exactly business idea but, for continuing social

entrepreneurship in business world, it cannot ignore economical aspects. Even though, there

are some features which are difficult to apply to the business industry; social

entrepreneurship is meaningful concept to the CSR, since almost all CSR activities are related

Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship

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to the top-down management decision and, if we put whole CSR concepts into corporations,

it normally brings about overall change for the company such as vision, structure and

individual employee‟s behavior. “From initial uncertainty and ambiguity in understanding

CSR, to moving forward to a new and concrete reality framed by deliberate leadership action.”

(Nada K, Andrew P, Linda Lee, 2007) So, adjust and implementing CSR is the main tasks for

leaders as entrepreneurs. GLOBE (global leadership and organizational behavior effective)

uses this fact for managing CSR. It is research project, which is developed by leadership

perspective. It has helped that companies corporate the CSR agenda into their core values by

building personal connections and creating an environment of trust and intimacy among

leaders. (Fred Robins, 2008) Therefore, CSR and social entrepreneurship are easily dealt with

together.

Then, what is it that makes difficult to apply CSR and social entrepreneurship into the real

business industry? The problems are divided into external and internal problems. First,

external problems are economic circumstances in these days. “CSR activity is not free and

that its costs have to be borne by somebody.” (Fred Robins, 2008) Cost aspect is very

influential reason that makes decision of the level of CSR activity. There is no doubt that the

economic crisis aroused not only from the pervasive speculation in the banking sector but

also from an expansion of loans from banks has an impact on the world economy all over the

world over the last decade. (Financial times, http://www.ft.com) Due to the financial crisis,

more corporations have hovered between the survival and collapse. This situation, in turn, is

likely to preventing from companies practicing CSR in terms of the cost, because, as a whole

investment additionally apart from activities about the core product or service of the

companies has to be always concerned after making sure if the investment can make potential

profit, for maintaining the company permanently. However, corporations prefer to put more

efforts on acheiving their main purpose of existence under the current situation, so it leads

companies to be slow in decsion about the active execution of CSR.

Second, for CSR, social entrepreneurship internal problem is unclear definitions, the

practical effects from these concepts. And there are no specific guidelines, how these two

concepts modified in business work. As ongoing subject, it is hard to distinguish direct result

from CSR and social entrepreneurship. CSR and social responsibility ranged over all business

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activities. Sometimes, these concepts are more related to the intangible parts like vision,

frame, and advertising strategy and those are fussy to compare investment and outcomes.

Even though, they are put in tangible project, the effects stretch to the corporation brand

image or reliability from then, these effects are hard to measure by figures. And by this time,

the study about CSR and social entrepreneurship have been dealt with in top management

level, so there are no specific guides how to these concepts performed by middle managers

and staffs. Moreover, Fred Robins (2008) proved that “Firm‟s stock performance and its

social responsibility has long been the subject of contradictory views.”

To overcome obscure model and prove real effects about CSR, social entrepreneurship, this

paper will choose „strategy CSR‟ concept. For adapting in business world, social

entrepreneurship should modify its norms within strategy CSR scope which balances between

economical and social needs as proper level, so strategy CSR can give guideline how CSR

and social entrepreneurship are reflected in corporation.

“Strategy CSR or strategic philanthropy is done to accomplish strategic business goals –

good deeds are believed to be good for business as well as for society.” (Geoffrey P. Lanots,

2001) This concept will bring appropriate scope of CSR definition, which is not too broad or

narrow, and deliver new perspective to adjust CSR and social entrepreneurship into reality.

Strategy CSR especially emphasizes CSR as a strategy and asset for corporation. For example,

as strategy CSR perspective, doing social goods will be brought goodwill. There exists

payback, and then CSR does not anymore charity works. Strategy CSR also relies on

financial problems, so like in these days, if the economical situation is not going well, it will

become secondary matter. For that reason, strategy CSR makes fully investment, when return

on investment is ensured.

Actually, there are representative example of succeed corporation, which used this strategy,

Body Shop and Ben & Jerry‟s. They actually do the social beneficial works but it is possible

when these works brings positive effects on their sales. For this kind of results, strategy CSR

does not only require duties to corporation, but it also imposes duties to other stakeholders.

„Reciprocal stakeholder responsibility‟ means that as social has some expectation to the

corporation, at the same time, corporation has expectation to the society. It contains important

Rethinking of Corporate Social Responsibility (CSR) and Social Entrepreneurship

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ideas that CSR is not for the corporation and it is also for the social parties. Until now, the

main stream of CSR studies have been inclined toward corporation side, but this concept also

stresses other stakeholder‟s role to complete CSR. For employees, they have to make a

commitment to their corporation and try to discover idea about CSR mission and credo. For

customers, they do not hesitate to pay more money for socially responsible business products

and progressively deliver their opinion to corporation and participate in consumer protection

activity. These mutual trials for doing CSR help make general conception to corporation who

takes CSR and social entrepreneurship as essential strategy to do business.

In conclusion, this paper explored several aspects about CSR and social entrepreneurship,

and, finally chose „strategy CSR‟ as the most preferable model to solve CSR and social

entrepreneurship‟s external and internal problems. Above all, for adjusting this concept, not

only corporation but also several social parties accept CSR and social entrepreneurship and

endeavor to spread these concepts. This concept helps CSR and social entrepreneurship to be

generalized in business, because it references reciprocally both cost aspects for corporation

and voluntary aspects for social parties. Then, CSR and social entrepreneurship are not

treated as troublesome work, but valuable strategy.

Reference List A three dimensional model of corporate performance, Carroll A.B., 1979 CSR leaders‟ road-map, Nada K, Andrew P, Linda Lee, 2007 How do I engage employees in the CSR agenda?, Michael R. Kissida, 2007 Strategy entrepreneurship, Wickham Philips A, 2006 Why corporate social responsibility should be popularized but not imposed, Fred Robins, 2008 Financial times, www.ft.com, 2009-03-25 The boundaries of strategic corporate social responsibility, Goefferey P. Lanots, 2001 The four faces of corporate citizenship, Carroll, A.B., 2000

Global Initiatives Symposium in Taiwan 2009

Hyeyeon Byeon