CSR as a tool for brand making in China

Sevara Tadzhibaeva

Haseeba Zormati

American University of Central Asia

CSR as a tool for brand making in China

Literature review

Corporate Social Responsibility (CSR) is important for any organization’s

performance. It helps to stay competitive and earn customer loyalty. The main concern of this

paper is to compare different CSR strategies in different countries. This source is used to support

the arguments that CSR is a tool for brand making in all over the world, especially in China. The

source also cites the Committee for Economic Development CED’s contribution to CSR.

Moreover, there are also arguments mentioned against CSR. For instance, Milton Friedman

argues in the source that management has only one responsibility and that is to make profit for

the owner. This leads that some companies do not invest into CSR programs and focus on profit

only, and later suffer from long-term outcomes. Later on, the company loses customers and stay

less competitive than those who have done some CSR programs. The given source will

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CSR as a tool for brand making in China

contribute to analyze how CSR can be a real tool for Chinese companies and why it should be

included into business models of an organization.[ CITATION UKE18 \l 1033 ].

The journal written by Paolo Popoli, about the Linkage of CSR strategy and brand image:

Different approaches in local and global markets have been discussed and the different between

CSR strategy used in global and local markets are explained. In the article a proper framework

has been described that why global markets should not use the strategies used in local markets in

which particular and selective approaches are undertaken. The article then use exact examples

measuring multidimensional approaches to design strategy for global markets considering its

multi stakeholder perspective. “For a global firm, adopting many different local CSR strategies

that differ from country to country can bring about a fragmented and incoherent comprehensive

strategy that tends to be limited to the minimum CSR standards required by a single local context

(Muller, 2006); Vice versa, the adoption of a global CSR strategy, integrated and valid for all the

countries in which the company is present, could bring about the ‘harmonizing towards the top’

phenomenon of CSR standards.” [ CITATION Pao11 \l 1033 ]

Research Topic

Corporate Social Responsibility (CSR) as an American concept that has been applied

into business strategies. It has rapidly been adopted in Western Countries. Yet, CSR has been

introduced to Chinese companies not long ago; Historically, CSR was driven by exogenous

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CSR as a tool for brand making in China

factors, and first made its appearance in China in the mid-1990s [ CITATION Tan14 \l 1033 ].

‘With the sustained and rapid development of economy and the economic globalization trend

from 1990s, the concept of CSR originated in the West was widely spread in China in recent

years [ CITATION Lij14 \l 1033 ]. However, experts identified positive impacts of CSR. This

paper will conduct research on various CSR programs that have been affecting the performance

of the companies in China. To be more specific, the paper will take a close look at CSR as a tool

for brand making and overall improving the wellbeing of an organization.

Statement of the Problem

  CSR is rapidly gaining importance in the society. According to Ramanathan (1996),

there is a social agreement between society and companies. He claimed that companies do not

function separately but they are part of the society which actually formed them. The importance

of the CSR programs is that organizations have to follow certain standards and do not harm

societies. It is very crucial to have CSR programs, as it encourages companies to behave

ethically to be socially responsible for operational activities (Essays, UK. (November 2018).

Importance of Corporate Social Responsibility [ CITATION UKE18 \l 1033 ]. CSR can be

implemented in a very different ways in different countries, Denmark is one of those countries

that practices Environmental Sustainability Initiatives as a form of CSR “In Denmark, they

don’t believe that being sustainable should be focused on the environment alone. Instead, they

stand out from the crowd as they constantly move away from the ‘green trend’ and focus on

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CSR as a tool for brand making in China

economics and social responsibility too. The Danish offshore industry is also in the process of

switching over from oil and gas, to offshore wind. They already have over 500 turbines but are

aiming to have over 10,000 in the coming years.” [ CITATION Kat17 \l 1033 ].

While some large counties focus on Environmental sustainability initiative as a form of CSR other

practice different types namely direct philanthropic giving or ethical business practices and

economic responsibility. Gerry Salole notes that “there are EFC members involved in both the

US-based SDG Philanthropy Platform, led by the United Nations Development Programmed

(UNDP), Rockefeller Philanthropy Advisors and the Foundation Center, and in the OECD based

Network of Foundations Working for Development (NetFWD). Both are providing support to

institutional philanthropy organizations looking for ways to engage with the SDGs. The SDG

Philanthropy Platform is active in Colombia, Ghana, Indonesia, Kenya, Zambia and Brazil.

[ CITATION Mil18 \l 1033 ]

In other hand, “it is the mentality that holds back companies to really take the long-term

advantages of CSR like creating a strong brand image. It is the company’s skeptical attitude

towards CSR. “An organization’s small investments on CSR programs are explained that there is

a lack of knowledge about it as it is a new thing for them [CITATION Yan18 \l 1033 ]. This paper

will analyze how CSR can be a tool and how companies can benefit from it. As the main

argument CSR can help companies to stay competitive as there is a high competition in China.

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CSR as a tool for brand making in China

Research Questions:

This research paper will be based on the following research questions: How CSR help

Chinese firms to untie the traditional way of operating business? How acknowledgement on CSR

make Chinese organization better off? What is the psychological impact of CSR on the

performance of employees, brand operation? How governmental laws affected CSR operations

recently? What are the best practices of CSR in Western countries? In the further analysis, the

research will focus on importance of sufficient amount of investments on CSR and how the

investments pay off later by increasing companies’ competitiveness. Do customers tend to value

more CSR oriented companies? (Psychological aspects). All these questions will help to make

the research accurate and relevant to the stated issues above.

Research Objectives:

The main objectives of the paper are to find to find out how CSR strategy for an

organization can positively affect brand image/awareness, show how charity and other CSR

programs can be a tool determining performance of the company? Why customers choose CSR

oriented organizations? “Research indicates that more consumers are basing their buying

decisions on corporate social responsibility. ‘An estimated 90% of shoppers worldwide are likely

to switch to brands that support a good cause, given similar price and quality [CITATION

New17 \l 1033 ]. How much money shall be invested for CSR? What methods do they use to

measure the right amount of investments in CSR? According to [ CITATION Sau16 \l 1033 ]

companies across the world adopt LBG's measurement model in order to assess the real value

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CSR as a tool for brand making in China

and impact of their community investment to both, the business and society. This model helps

companies to understand the total amount of cash, time and in-kind invested with- in the

community, and enables them to understand the geographic spread of their community support

and the kind of themes supported such as education, health and arts and culture’.

Is it important to hire a CSR manager? Davis (1960) hinted at the role of managers in the social

enterprise of business by suggesting that corporate responsibility involves decisions in the

business sector that go beyond the firm’s direct economic Interests [CITATION Dia08 \l 1033 ]

Hypotheses:

By Linking CSR strategy and brand image it’s been addressed that ‘The importance of

CSR to any organization is directly related, and rises in proportion, to the value of the firm’s

global brand’ [ CITATION Pao11 \l 1033 ].Increase in brand awareness increases the performance

of an organization. Thus the hypothesis of this research paper is “CSR is a tool to improve

companies’ performance in China”.

Methodology:

The aim of this study is to obtain the insights of development of CSR strategies in China

and give accurate recommendation on how CSR can be used to increase the performance of

organizations. For this purposes, the research will be based on primary and secondary resources;

journals, books, articles, research papers that have been published before and now in this matter.

The secondary data will help to analyze the background and the history to build a better

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understanding of the topic both for reader and researcher. The primary data will help to review

recent challenges related to the topic and will contribute to prove the hypothesis.

References

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CSR as a tool for brand making in China

Diane.L, (2008, p. 1) the Oxford Handbook of Corporate Social Responsibility

Essays, UK. (November 2018). Importance Of Corporate Social Responsibility. Retrieved from

https://www.ukessays.com/essays/management/importance-of-corporate-social-responsibility-

management-essay.php?vref=1

GUO .Z (2014, 39) Evolution of CSR Concept in the West and China.

Griffiths, Michael B, Zeuthen.J, (2014, P. 35), Bittersweet China: New Discourses of

Hardship and Social Organization, in: Journal of Current Chinese Affairs

Melo.t, (January 2011) Effects of corporate social responsibility on brand value.

Mullins.T, May, Peter S. H, (2014,P.6) The Shaping of Chinese Corporate Social Responsibility,

in: Journal of Current Chinese Affairs.

Newman .E (2017), Why Customers Love Socially Responsible Companies. Retrieved from.

http://corp.yonyx.com/customer-service/customers-love-socially-responsible-companies/

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CSR as a tool for brand making in China

Popoli.P, (2014, P.265) Linking CSR strategy and brand image: Different approaches in local

and global markets, Parthenope University of Naples, Italy.

Qiu.j, (2017);Quality of CSR Reporting in China: A Comparative Analysis Between State- and

Privately-Owned Real Estate Companies)University of Pennsylvania.

Zhang .D, Morse .S, Kambhamptati .d, Li.B, (2014) Evolving Corporate Social Responsibility in

China.

PwC, (2013, P.9),Handbook on Corporate Social Responsibility in India.

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