Corporate Social Responsibility: A Threat or an Opportunity

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School of Business | Bachelor's thesis
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There has been an increasing interest towards corporate social responsibility (CSR) during the last decades. Traditionally, the main purpose of companies has been to generate as high profits as possible for their shareholders. Today, corporates cannot leave demands and interests of their other stakeholder groups ignored as their ethical, environmental and social responsibilities are emphasised. As corporates try to fulfil all the demands of their different stakeholder groups, have they started to release non-financial disclosures regarding their corporate social responsibility. The purpose of these disclosures is to communicate outside stakeholders about firms’ corporate social performance and CSR activities. Opinions towards corporate social responsibility are divided in two. As some still argue how societal issues are not under the responsibilities of corporates, some emphasise how firms can create competitive advantage by integrating CSR activities in their businesses. The aim of this paper is to study positive and negative functions recognized in corporate social responsibility. The main research question this paper aims to answer to is what kind of internal risks and benefits as well as external threats and opportunities can be found in corporate social responsibility. Findings are gathered and presented in a four-dimensional SWOT type framework to provide a clear and comprehensive picture of the subject. In this paper, a systematic literature review is conducted. Corporate social responsibility is a broad concept and the area of CSR research is inconsistent. Additionally, CSR is difficult to measure because of the lack of variables which also supports systematic literature review as a research method. Systematic literature review helps to identify where the current literature stands today and what functions should be paid attention to in the future. In total of 19 key papers and two books are reviewed to construct a comprehensive picture of internal risks and benefits as well as external threats and opportunities of corporate social responsibility. The findings show that there are several risks and opportunities identified in corporate social responsibility. Risks and threats were identified in cost-benefit analysis, management expertise as well as in firm reputation and communication. The opportunities of corporate social responsibility were related to innovations and differentiation as well as in gaining better access to capital and risk management. However, dividing findings in two is made rather artificial since some functions are dependent on managers’ expertise and the fundamental level of CSR implementation. Therefore, corporates should focus on how to implement and communicate about their CSR activities to turn risks of corporate social responsibility in to benefits.
Thesis advisor
Derichs, David
CSR, CSR reporting, corporate social responsibility, threat, opportunity