The Case For Corporate Responsibility_ Arguments
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PROBLEM STATEMENT
The recent spate of corporate failures and accounting scandals
has undermined society’s faith in corporate leadership, in
financial reporting and in the integrity of markets the world
over (Dowling, 2004; Witherell, 2002). In the past years,
internationally and locally, demands have been made by
corporate stakeholders to increase governance practices within
organisations (Hollender, 2004; Paine, Deshpande, Margolis &
Bettcher, 2005; Zadek, 2004) and to include in corporate
strategy, corporate responsibility initiatives that demonstrate
organisational commitment to the greater good of society
(Amalric & Hauser, 2005; Hollender, 2004; Kennedy-Glans,
2005/06; Werther & Chandler, 2004).
The notion of corporate responsibility or corporate citizenship
is not easily defined (Grayson, 2005). Efforts have been made to
translate social responsibility rhetoric into corporate action with
more writers devoting their time to devising tools and methods
of implementing the concept in organisations.
The range of issues that continue to be added to the ‘corporate
responsibility’ sphere is ever-increasing, making it difficult for
corporations to know what action to take and how to make a
case for action in these areas. Changes in the environment in
which organisations operate and debate around the
accountability of business as a principal actor and motor for
growth and development, opens the debate around the role of
business in society. Defining the boundaries of responsibility of
organisations in the face of failed states, poverty and lack of
economic development is especially challenging in Africa today.
In Africa, Visser, Middleton and McIntosh (2005, p.18) note the
role of business in a tripartite partnership with government and
civil society to be focused at “aiding development towards a
more participative, rule-of-law-based society where basic human
rights and needs are met”. Meeting such human rights involves
poverty alleviation, improving governance, improving
education, tackling corruption, enforcing labour standards,
preventing resource depletion, controlling industrial pollution,
promoting environmental conservation, upholding business
ethics, ensuring the integrity of supply chains and addressing
health issues such as HIV/AIDS (de Jongh, 2004; Visser,
Middleton and McIntosh, 2005). In this regard, Visser, Middleton
and McIntosh (2005) view a corporate citizenship or corporate
responsibility debate as being integral to any debate on the
future of Africa. Hamann, Kapelus, Sonnenberg, Mackenzie and
Hollesen (2005, p. 61) broaden this argument to stress the need
for organisations working in Africa to proactively and creatively
develop local collaborative structures within an “intricate and
dynamic web of interrelated role-players involved in
(un)sustainable development at the local level”.
Hamann and Acutt (2003, p. 255), referring to corporate social
responsibility in the South African context, note that it “is
meant to link the market economy to sustainable development”.
Such sustainable development is arguably complimentary to
economic development. Hamann (2003) notes that such
initiatives necessarily must go beyond philanthropic investment
to embrace developmental initiatives due to the country’s
history of apartheid and concomitant lack of previous state
support for social development. Thus, the unique challenge to
South African organisations is to address broader societal needs
but to continue to generate profit to ensure that this happens
(Middleton, 2005).
Visser (2005) notes the drivers of corporate social
responsibility in South Africa to be legislation, globalisation of
South African companies and concomitant subjection to
international corporate governance requirements, stakeholder
activism and adherence to global standards and codes
including ISO 14001. The King Report on Corporate
Governance (Institute of Directors, 2002) has also had wide-
reaching impact with its recommendation that companies
should report annually on the nature and extent of their social,
ethical, transformation, safety, health and environmental
practices, a recommendation that the Johannesburg Securities
Exchange has made compulsory for companies wishing to list
on the stock exchange. Sustainability reporting is now
commonplace in South Africa with the publication of
organisational initiatives on corporate performance in not
only the economic sphere but also social and environmental
performance, the so-called ‘triple-bottom line’ (Co-operative
Insurance, 2002; Grayson, 2005; Institute of Directors, 2002;
Vermeir, Van de Velde & Corten, 2005; World Business Council
for Sustainable Development, 2003).
It is advocated that the elements of corporate responsibility
strategy in South Africa and the justification for that strategy
should be studied with a view to comparing these to best
practice and making recommendations to organisations.
As a background to begin to address these issues, a literature
survey has been undertaken, highlighting the reasons why
organisations do or should implement a corporate responsibility
strategy. The literature review is divided into two sections. The
LUCY DA PIEDADE
lucydapiedade@aol.com
ADÈLE THOMAS
adelet@uj.ac.za
Department of Human Resource Management
University of Johannesburg
ABSTRACT
Heightened scrutiny of organisations and ever increasing stakeholder demands for organisations to respond to issues
within broader society, make it imperative that organisational leaders understand why they should undertake
corporate responsibility initiatives. This literature review (part one of a two part study) investigates the issues that
should be addressed by organisations under the banner of corporate responsibility, including the definition of
corporate responsibility, its extent and boundaries and the business case for corporate responsibility. This
background provides a basis for an exploratory study (part two) of how South African organisations should frame
the case for corporate responsibility and how investment in this area can be assessed.
Key words
Corporate responsibility, review initiatives, literature
THE CASE FOR CORPORATE RESPONSIBILITY:
ARGUMENTS FROM THE LITERATURE
57
SA Journal of Human Resource Management, 2006, 4 (2), 57-64
SA Tydskrif vir Menslikehulpbronbestuur, 2006, 4 (2), 57-64
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