The Level of Economic Development and its effect on CSR Implementation: A Case Study of Chevron and Shell

University essay from Malmö högskola/Fakulteten för kultur och samhälle (KS)

Abstract: Worldwide and specifically in the economic developed countries the role of business has changed over the last few decades from classical ‘profit maximizing’ approach to a social responsibly approach. Organizations, not only; have responsibility to their shareholders, but also they have responsibility to all their stakeholders in a broader inclusive sense.According to Carroll (1999) the social responsibility of business embraces the Economic, Legal, Ethical and Discretionary expectation. Economic responsibility of business means that society expects business produce goods and service to answer society needs. Werther and Chandler (2011) mentioned that, one cannot look at CSR without considering the context which includes the level of development in an organization’s operational location.CSR has been conventionally perceived as a phenomenon reserved for developed countries. In the other word, in developed countries with better resources and organizations will demand or have higher expectations from CSR. However, in developing countries, there is no significant focus on the CSR initiatives rather on economic growth, hence relegating CSR to be lower significance to the MNCs and the society at large (Hurst, 2004, cited by Pimpa, 2011). Supporting this Hohnen (2007) saying that there are differences in the way CSR is implemented and promoted. Depending on the context of the operational location the success of CSR on an organizational level and the entire economy, are interrelated with situational factors such as; economic, social, institutional and cultural conditions of context.It means that, the differences in implementation of CSR strategy within countries are dependent on context. The purpose of this paper is to find the role of economic development as one of the factors that have an effect on implementation of CSR. To answer our questions about this problem we have looked to CSR activities by two multinational companies in two different locations developed and developing (Canada and Nigeria) in order to understand the effect of economic development on CSR implementation. Using HDI as a scale of measurement, we categories the scale of economic development of countries where Nigeria is quite lower than Canada. Through evaluating and interpreting companies CSR activities in both countries. We conclude that the bottom up line of approach - the level of economic development defines the level and types of community needs which has a significant role to play in shaping implementation in organizations CSR strategy.

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