Corporate Social Responsibility and branding in a developing country.
In this chapter the background of the thesis will be presented and discussed. Moreover, a literature review, research problem and research questions will be introduced in order to get an understanding of the study purpose. This is followed by the limitations and disposition.
The companies of today are very aware of what the public and other stakeholders demand from the companies´ way of handle their responsibilities (Burchell, 2008). In order to form a strategy for the protection of their brand image and reputation many companies find themselves engaging in Corporate Social Responsibility activities (Kotler and Lee 2005), from now on abbreviated CSR. The desire of doing well and doing good in the society in which the company is operating have been of increasing interest world wide during the last decade. As a result, corporate reporting on social responsibility initiatives can more often be found in companies´ marketing strategies (Kotler and Lee, 2005). Even though CSR activities are increasing among today´s organizations there is still lack of a general universally definition of this concept (Crowther and Capaldi, 2008). But in a broad perspective CSR is understood and described as the way companies integrate social, economic and environmental matters into their internal organization (values, culture, decision making and strategy), which leads to establishment of better society, wealth and better practices within the company (Horrigan, 2010). Considering the breadth of CSR it can subsequently be described in many different names: corporate responsibility, corporate sustainability, corporate accountability, corporate citizenship, sustainable development etc (Benn and Bolton, 2011). In a shorter explanation, CSR can therefore be explained as the relationship between a corporation and its stakeholder (Crowther and Capaldi, 2008). Already in 1972 the American professor in Business Administration, Dow Votaw, stated that the amount pages on social responsibility written in our time would fill up a small library. As it turns out, he was right. CSR is here to stay. The idea of taking responsibility beyond what the law demands has increased since the millennial shift (Borglund, DeGeer and Sweet, 2012). Especially big organizations, both in the public and private sectors, are engaging in these kinds of activities (Burchell, 2008). The benefits of a company´s usage of CSR activities can lead to a better position in the market and a positive return on investment. On top of that of course the benefits for society, such as improvement of life or a cleaner environment (Kotler and Lee, 2005). On the other hand, many view CSR mainly as a step towards a reputation as a responsible business and as good citizens (Burchell, 2008). Either how, risks by avoiding to use this concept can lead to lack of legitimacy for the organization. Meyer and Rowan (1977) also claim that when having a business it is important to be accepted and to be legitimacy in the environment as well as having effective and structured internal processes to survive. According to Grusch (2006) consumers actively scrutinize the local behavior of international companies. Their out-sourced ventures are also being observed, and information regarding possible bad behavior reaches the ears' of the public much more quickly than it used to. Consequently, to the stakeholders' awareness and other factors that can have an impact on a company's survival, it is therefore important for companies to establish competitive advantage. Differentiation is a way to secure competitive advantage. By using a differentiation strategy a company´s key strengths and core competencies builds up, and this is where CSR has an important role for a company´s brand as it gets differentiate by incorporating it in the corporate image. This kind of action can generate to better brand...
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