Many companies fall short of social responsibility promises

February 9, 2012 by Jared Wadley

(PhysOrg.com) -- Whether eliminating child labor, creating environmentally friendly technology or working against all forms of corruption, many corporations fail to become socially responsible despite promises to change, a new University of Michigan study found.

In an article recently published in the , U-M Alwyn Lim and Kiyoteru Tsutsui say that corporations in developed countries "are more likely to make shallow commitments without substance" in response to external pressures from government and citizens to take socially responsible actions.

They say, however, that some corporations in developing countries make more substantive commitments to corporate when they face the same external pressures.

In the age of cutthroat economic competition that mandates corporations to maximize profit and shareholder returns, a surprisingly large number of corporations commit to social responsibility that often does not generate immediate or tangible benefits, say Lim, a doctoral student in sociology, and Tsutsui, an assistant professor of sociology.

But do companies genuinely care about responsible actions or are they simply paying lip service to evade rising criticisms about corporate excesses?

Lim and Tsutsui analyzed data on the levels of commitment to social responsibility among corporations in 99 developed and developing countries.

They found that global factors like pressure from international nongovernmental organizations and trade relationships are encouraging corporations around the world to pledge to improve their social and environmental practices, holding constant other factors such as how receptive the country's residents are to ideas of corporate social responsibility.

The authors also say that these global pressures push corporations in developing countries to have relatively onerous social responsibility plans that include disclosing their efforts to the United Nations and to the Global Reporting Initiative, a nongovernmental agency that facilitates sustainability reporting.

Companies in developed countries, on the other hand, tend to make only shallower commitments and fail to submit rigorous reports on their social responsibility promises, the research showed.

Lim and Tsutsui suggest that these patterns may reflect different attitudes to corporate practices in the developed North and the developing South, with corporations in more liberal market economies using corporate social responsibility to avoid government regulations. Nevertheless, they also emphasize that, as ideas of become more prominent, more corporations will be held accountable to their promises to improve their social and environmental practices.

The findings are both promising—in that global efforts to promote responsible corporate behavior are producing conscientious efforts by corporations in developing countries—and disturbing, because those in who pay a lot of lip service to social responsibility are not delivering on their promises. The researchers call for more effective global institutions and more attention by citizens to further improve corporate behavior.

Explore further: Corporate social responsibility: less profit, more value

More information: asr.sagepub.com/content/current

Related Stories

Corporate social responsibility: less profit, more value

February 7, 2008

Companies that operate in a socially responsible manner 'pay' for this with a loss in financial profit. Yet at the same time, socially responsible business practices can enhance a company's value. Dutch economist Lammertjan ...

Recommended for you

Plague likely a Stone Age arrival to central Europe

November 22, 2017

A team of researchers led by scientists at the Max Planck Institute for the Science of Human History has sequenced the first six European genomes of the plague-causing bacterium Yersinia pestis dating from the Late Neolithic ...

How to cut your lawn for grasshoppers

November 22, 2017

Picture a grasshopper landing randomly on a lawn of fixed area. If it then jumps a certain distance in a random direction, what shape should the lawn be to maximise the chance that the grasshopper stays on the lawn after ...

Ancient barley took high road to China

November 21, 2017

First domesticated 10,000 years ago in the Fertile Crescent of the Middle East, wheat and barley took vastly different routes to China, with barley switching from a winter to both a winter and summer crop during a thousand-year ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.