The concept and framework of CSR has been established by the European Union in relation to promote the CSR to the business society and environment. Corporate Social Responsibility refers to the “firm’s consideration of, and response to, issue beyond the narrow economic, technical, and legal requirements of the firm…(to) accomplish social benefits along with the traditional economic gains which the firm seek.”(Husted 2003).
CSR was defined by European Commission (2007) is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with the stakeholders on a voluntary basis” following ...view middle of the document...
This is where corporate management will react to community expectations (Guthrie & Parker 1989). Thus, companies are expected to carry out activities that are acceptable by the community. Legitimacy also implies that companies will take cautions to ensure their activities and performance acceptable to the community given a growth in community awareness (Wilmshurst & Frost 2008). Corporate social disclosure can be used to appease some of the concerns of the relevant publics and also as a proactive legitimation strategy to obtain continued inflow of capital and to please ethical investors (Haniffa & Cooke 2005). However, Guthrie and Parker (1989) failed to confirm legitimacy theory as an explanation for societal disclosures in their longitudinal study of BHP, an Australian mining and manufacturing company.
Economic theory reflects the degree of association of CSR and financial performance by taking consideration of cost-related advantages, market advantages and reputation advantages (Chamburi & Wan Noramelia 2004). In the business, CSR is concerned with employment, lifelong learning, consultation and participation of workers, equal opportunities and integration of people towards restructuring and industrial change. Basically, the formation of policies is influenced by the authority employment strategies, the initiatives on social responsible restructuring, the initiatives to promote quality and diversity in the workplace and health and safety strategy.
The social issues include the benefits offered in terms of training related to safety, health and environment, donations, education schemes, medical benefits and others. Environmental issues emphasize on preserving and conserving natural resources such as conducting recycling activities, noise reduction action plan to pursue noise improvement activities, water and process treatment and compliance with authority regulations and requirements. Many enterprises recognised the importance of their responsibilities towards the environment and take them seriously by setting targets for continually improving their performance. Policies are developed in accordance efforts such as minimising the consumption of natural resources including energy, water and other raw materials, phasing out the use of ozone depleting substances in buildings, reducing waste produced, encouraging recycling and minimising the use of landfill sites while ensuring the compliance with all relevant legislation. Besides, it might also involve regular review of transport operations that improves efficiency and reduces its environmental impact, liaising with suppliers to develop environmental base practices in supply chain, promoting the recycling of raw materials, encouraging staff to support initiatives towards local, national and global environment in a positive way, raising and maintaining staff awareness of such policies, ensuring that employees are engaged in supporting resulting practices, measuring, monitoring and reporting...