Over the past 20 years, corporate social responsibility (CSR) has moved to the forefront of all business interactions, most specifically in western business practices. Corporate U.S. scandals including Enron, World Com, and the housing and foreclosure crises have led to shifts in how companies conduct business and how transparent they are communicating with stakeholders. Corporate social responsibility is also a chief practice as ecological and environmental concerns are at the forefront of many who are working to make the planet a safer environment. While corporate social responsibility efforts have become part of everyday business in western countries, this trend has been much slower to find traction in eastern business dealings. Over the five years, Asian countries have become more CSR-minded. CSR is Asian countries, Indonesia, Malaysia, Pakistan, Bangladesh, Thailand, and Singapore, is not the same across the region. This paper will briefly outline the differences in CSR in Asia.
Corporate Social Responsibility
Companies adopt CSR strategies to balance social, economic, and environmental issues that will benefit people, the communities in which they operate and live, and society as a whole (Porter & Kramer,2006). A simple, all-encompassing definition of CSR includes two key points: a corporation acting socially responsible must do no harm to its stakeholders (investors, employees, customers, suppliers, or local community in which they operate); and two, if harm is done, the corporations must voluntarily rectify the problem as soon as it is discovered (Fontaine 2013). CSR practices are used to help promote the work that companies are doing for communities and for the environment. The following issues that fall under corporate social responsibility: human rights; workplace and employee issues; unfair business practices; organizational governance; environmental aspects; marketplace and consumer issues; community involvement; and social development.
Corporate Social Responsibility in Asia
In 2013, the eight-story Rana Plaza collapsed outside of Dhaka, Bangladesh. More than 1,100 people died, due to extremely unsafe working conditions in a building that was three stories taller than it was designed to be (Sinkovics, Hoque, & Sinkovics 2016). People were forced to come to work, despite management being warned that the building was unsafe and shaking, for fear of losing their positions. This tragedy had far-reaching impact on the garment industry, the world; Bangladesh is a $28 billion garment industry, second in the world after China, while drawing attention to the unsafe conditions that these people are forced to work in every day. Nations from around the world import garments from the area, and as western nations focus on corporate social responsibility and have to be accountable to the governing bodies, incidents like these are at the forefront of consideration.
An examination five years later of Bangladesh’s garment industry revealed that unfortunately conditions have not much improved and that CSR in this developing company is a complicated issue. From foreign customers not wanting to pay more for ethically made products, to the country’s complicated tax code and economic need so vast that factories are still being constructed on top of each other (Westerman 2017).
As this tragedy and its aftermath revealed, in some Asian areas, CSR is a concept that is not a high priority based on most specifically economic factors. In Japan, large companies are working to provide long-term employment prospects, while treating their male employees well (Debroux 2017). However, Japan has done little to improve working conditions or offer opportunities to women, nor have they offered explanations to foreign suppliers (Debroux 2017).
According to a 2015 study by Shakeel, which examined multinational Asian countries, stock markets are playing a key role in increasing transparency of companies and motivating more sustainable practices, across the region. Employment also serves as a prime driver, as well as social media, environment, and transparency and accountability. Asian businesses across the region are family members play key roles in large organizations making transparency and reporting important to all stakeholders. According to the study, CSR practices are highest in Singapore due to ecological concerns, then Hong Kong, India, Malaysia, Vietnam, Cambodia, and Mayanmar.
Corporate social responsibility is Indonesia focused on sustainability, but not looked upon favorably and more of a contract between government and businesses (Shakeel 2015). CSR is in its early stages in businesses in China, making it hard to implement the practice due to limited available experts, and failure is marked with unhappy customers. Malaysia is the most active in CSR focused on technology, quality improvement, service trustworthiness and competitive pricing, (Shekeel 2015, 174).
Thailand is focused on education and training, as well as the environment, preservation, the arts and youth. Singapore is also focused on education and training as well as community involvement, health, disability, welfare (Shekeel 2015, 175). Finally in Pakistan, the comprehension of what corporate responsibility as the rest of the world defines it, is missed. According the Pakistan Center for Philanthropy, 40 percent of companies believe CSR is paying taxes, 30 percent believe its community welfare efforts, with other ideas including self-interests (Shekeel 2015, 175). Only five percent of Pakistanian companies truly understand the implementation of activities and projects and transparency.
There is a growing body of research that is examining corporate social responsibility efforts in Asian countries. As it is an even newer practice than it is in western business companies, its incorporation is slow. In addition, many of these countries are developing, and being socially responsible is not necessarily high on the list of priorities when facing high taxes and economic hardships. CSR in Asian countries also varies based on individual concerns and efforts to grow and chief concerns of the area.