A study on corporate social responsibility

To use a hackneyed expression, times change.  As has for the world of corporate business practice. Nazmul Amin Majumdar, the author of Corporate Social Responsibility Practices in Emerging Economies:  The Case of Bangladesh, begins his book by expounding on this aspect of changing times:  "In business and management literature, Corporate Social Responsibility (CSR) has emerged as a key business strategy tool for redefining the role of corporations in the marketplace in today's globalised economy."  Majumdar is a career civil servant who, before joining the government service, worked in a large multinational company in Bangladesh.

Majumdar acknowledges that the issue of whether the CSR involvement of corporations should be voluntary or set within a regulatory framework has yet to be resolved between academics and practitioners (given the relative novelty of the phenomenon, not very surprising).  Nonetheless, there is little argument that, in "today's globalised corporate culture it is the obligation of corporate entities to ensure that the wellbeing of its stakeholders is ensured."  In terms of defining the concept of CSR, after having discussed several offerings by different authors and organizations, he settles on the broad categorization suggested by Harvard University's Kennedy School of Government, which states that CSR encompasses "not only what companies do with their profits, but also how they make them."

At the outset of the book, Majumdar clarifies that although the concept of CSR is applicable to corporations of all sizes, he has chosen to concentrate on the large corporations on the ground that "they are visible and have more power in the marketplace."  In this context, he sets out the objectives of his study.  Broadly, he attempts to develop an operational framework of CSR to assess the CSR practices of corporations.  We find out later in the book the extent of his success in this endeavour.  Specifically, his aim is to:

Understand CSR in Bangladesh.

Identify the key CSR factors and highlight the problems and challenges confronting corporations and management.

Undertake social responsibilities, including poverty alleviation and sustainable development.

Going back to the issue of divergence of opinion between the academic and institutional schools of thought, the author finds common ground linking the two.  They seem to be in broad agreement that "human rights, labour standards, environmental impacts, corruption, workplace relations, the marketplace, gender discrimination in the workplace, freedom of association, fair trading options, and philanthropic activities like natural disaster management, could be considered as issues of standard global CSR practices."  However, he cautions that, in developing economies, corporations do not always practice them.  That, given the disparity in the quality and efficiency of business practice in the developed and developing world, should come as no surprise.  Still, there are CSR issues that cut across the major global models, like human rights, labour standards, and environmental issues.  Majumdar is appreciative of the developing countries' situation when he notes that without first comprehensively examining their condition, the CSR operational models of developed countries cannot be expected to be completely functional in them.  

The author has carried out an extensive survey on the leading pharmaceutical corporations of Bangladesh to substantiate his findings on CSR in at least one prominent sector of the country's economy (Ch. 3, "Industrial Development Policies and the Rise of the Pharmaceutical Industry of Bangladesh").  We recall that his stated intention was to concentrate on the large corporations.  Fair enough, but that almost certainly limits the scope and authority of a holistic study.  Majumdar has carried out an extensive survey on the industry, which is reflected in the comprehensive chapter that he has written.  Some of his findings reflect tangentially on the overall governance situation in the country.  He finds rampant extortion and widespread corruption inhibiting CSR practices of corporations.  One does not have to expend much energy to put two and two together to relate to the scenario bedeviling Bangladesh.

The author remarks on a sterling aspect of the average Bangladeshi's character:  "In general, the people of Bangladesh individually or in groups assist the less fortunate, particularly during natural calamities like floods, cyclones and epidemics."  He finds that corporations are also engaged in philanthropic activities, but many tend to view these involvements as insignificant in comparison to their profit growth.  In terms of the richest people, he has a significant observation that hints at a corporation-media nexus.  Alluding to a study, he states that the very rich either own and run, or finance, important national newspapers "for their self-publicity and interests in order to create a political image and gain business through pressure, which often amounts to blackmail."  Majumdar advocates for a more positive role for the media, whether print or electronic, which can act as a watchdog and guide businesses towards CSR practices in the establishment of a fair and free market.  He, however, acknowledges that in Bangladesh, the media at times do make consumers aware of the consequences of a business policy or activity.  He does not forget to add that the chapter has focused on the importance of the pharmaceutical corporations in this country and their contribution to its economic development.

The author has also studied external and internal stakeholder conceptualization of CSR practices.  His findings indicate that external stakeholders have acknowledged the importance of CSR in business.  They believe that CSR has positively influenced gains in business reputation, brand name, and market power.  Such positive impact on business performance eventually increases profit margins.  The point is that, as stated earlier, almost no one disputes that modern business enterprises should take up CSR.  It is just that the perception lingers, as the author has indicated, that the CSR that businesses undertake is not commensurate with the massive profits they make.  The author could have expounded expansively on this perception, or reality, as the case may be.

In Bangladesh, the author finds, while some corporations have followed globally acknowledged CSR models, not all have been able to, because of country-specific constraints.  A country's level of economic development, intensity of corruption, and organizational leadership need to be considered while practicing CSR in Bangladesh conditions.  From this perspective, Bangladesh has some way to go before establishing widespread CSR practices in the business sector.  Indeed, the author observes, the perception of CSR often differs from one observer and/or practitioner to the other.  "The empirical results suggest that CSR is recognized as a business strategy tool by both external and internal stakeholders in Bangladesh.  However, the degree of importance of CSR varies between stakeholders."

Majumdar comes to several specific and general conclusions regarding his findings from the study.  Stakeholders would like to pursue issues like workplace health and safety, women's rights, and creating jobs in order to facilitate CSR in Bangladesh.  His analysis also suggests "that the country is struggling with contextual issues that have a negative influence on the CSR practices of corporations in Bangladesh:  for example, the country's economic ills, the regulatory regime, corruption, and lack of a level-playing field between national and multi-national corporations."  However, other determinants are positively related to CSR practices, like a democratic polity and the socio-cultural and religious beliefs of citizens.

The book seems to be, as it is organized, representative of a PhD dissertation.  The substantial chapter on methodology, data collection, and research design, which could easily have been summarily presented, seems to be a dead giveaway.  It reads like a dissertation effort.  There is nothing wrong with turning ones PhD dissertation into a book, but necessary changes need to be incorporated for it to be metamorphosed into a book format.  Corporate Social Responsibility Practices in Emerging Economies:  The Case of Bangladesh explores a very important subject in the post-Cold War free market economy-dominated world.  It will add to the knowledge of corporate social responsibility as a necessary and effective tool in business practice.

The reviewer is an Actor and Professor and Head, Media and Communication department, IUB.