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A Critical Literature Review on Corporate Social Responsibility (CSR)
Introduction
Corporate Social Responsibility (CSR) has emerged as a key strategic and ethical concern for organisations worldwide. Traditionally viewed as a voluntary commitment by businesses to contribute to societal goals, CSR has evolved into a crucial part of corporate identity and long-term sustainability (Carroll & Brown, 2018). This literature review critically examines contemporary academic contributions on CSR, identifies core themes, explores divergent perspectives, and highlights gaps in the current body of knowledge. It draws from at least six scholarly sources published within the last ten years and uses the Harvard referencing style throughout.
What is a Literature Review and What Does It Achieve?
A literature review is a comprehensive summary and critical evaluation of prior scholarly work on a specific topic. It provides an overview of key debates, emerging trends, and gaps in research, enabling scholars and practitioners to contextualise their investigations (Ridley, 2012). By synthesising multiple perspectives, a literature review facilitates an understanding of the current state of knowledge, challenges prevailing assumptions, and sets a foundation for further research (Booth, Sutton & Papaioannou, 2016).
In the context of CSR, the literature review helps reveal how the concept has been defined, implemented, and evaluated across various industries and geographies. It also aids in distinguishing between genuine CSR practices and superficial, reputation-driven initiatives (often referred to as "greenwashing").
Literature Review on Corporate Social Responsibility
Definitional Ambiguity and Evolving Scope
One of the major issues in CSR literature is the lack of a universally accepted definition. Carroll’s (1991) four-part model of CSR , economic, legal, ethical, and philanthropic responsibilities , remains foundational. However, recent literature has built upon this, emphasising sustainability, stakeholder engagement, and global responsibility.
According to Aguinis and Glavas (2019), CSR encompasses "context-specific organisational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance." This definition highlights CSR`s dynamic and situational nature, stressing alignment with stakeholder interests.
CSR and Stakeholder Theory
Stakeholder theory (Freeman, 1984) is widely referenced in CSR studies. It argues that businesses must consider the interests of all stakeholders, not just shareholders. More recent work by Harrison and Wicks (2013) expands on this, suggesting that CSR initiatives enhance stakeholder trust, thereby contributing to firm performance.
In contrast, critics such as Friedman (1970), although outside the 10-year range but still relevant, argue that CSR distracts from a firm`s primary goal, profit generation. However, empirical studies have increasingly challenged this view, demonstrating positive correlations between CSR and long-term profitability (Porter & Kramer, 2011).
Strategic CSR: Value Creation or Reputational Shield?
The literature has increasingly focused on the strategic integration of CSR into core business models. Porter and Kramer (2011) introduced the concept of “Creating Shared Value,” where CSR is not a cost but a source of innovation and competitive advantage. Empirical studies by Hawn and Ioannou (2016) support this, showing that firms with integrated CSR strategies experience higher levels of financial and reputational performance.
However, there is a growing body of research criticising superficial CSR efforts. Michelon, Pilonato, and Ricceri (2015) argue that many companies engage in CSR disclosure more for legitimacy and image management than genuine social impact. This concern has led to increased emphasis on transparency, third-party audits, and ESG (Environmental, Social, Governance) ratings.
CSR in Developing vs Developed Economies
CSR practices vary significantly across geographies. Jamali and Karam (2018) examine how cultural, political, and institutional differences shape CSR strategies in the Global South. In countries with weak regulatory frameworks, CSR is often externally motivated by international stakeholders rather than internal ethics.
Conversely, in developed countries, CSR is increasingly linked to sustainability reporting, diversity, and ethical supply chains. A study by Zhou et al. (2021) comparing China and the UK found that while UK companies prioritised environmental sustainability and social inclusion, Chinese firms often adopted CSR to enhance legitimacy and international credibility.
CSR and Corporate Governance
The role of corporate governance in shaping CSR is another prominent theme. Board diversity, ethical leadership, and CEO activism have been positively associated with CSR effectiveness (Fernando & Lawrence, 2014). Garcia-Sanchez et al. (2019) found that firms with independent and diverse boards were more likely to adopt robust CSR policies and disclosures.
Moreover, increasing investor pressure through ESG investing has pushed companies to adopt transparent CSR reporting. However, the voluntary nature of CSR and the lack of global standards continue to hinder comparability and effectiveness (Ioannou & Serafeim, 2017).
CSR and Employee Engagement
Recent literature also links CSR to internal stakeholder outcomes. Glavas (2016) found that employees who perceive their organisations as socially responsible demonstrate higher levels of commitment, motivation, and job satisfaction. Furthermore, younger generations (e.g., Millennials and Gen Z) are increasingly aligning employment decisions with organisational values, making CSR a critical HR consideration (Turker, 2009; Deloitte, 2021).
Measuring CSR Impact
Despite its growing popularity, measuring the actual impact of CSR remains challenging. Indicators like the Global Reporting Initiative (GRI) and ISO 26000 offer guidelines but are criticised for being voluntary and vague. Several scholars have called for the development of a universal CSR index to ensure accountability and consistency (Sulkowski, 2016).
