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Practising corporate social responsibility in malaysia a case study in an emerging economy

PRACTISING
CORPORATE SOCIAL
RESPONSIBILITY
IN MALAYSIA

A Case Study in an
Emerging Economy

Loi Teck Hui

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Practising Corporate Social Responsibility
in Malaysia


Loi Teck Hui

Practising Corporate
Social Responsibility

in Malaysia
A Case Study in an Emerging
Economy

www.ebook3000.com


Loi Teck Hui
Loi & Mokhtar (Chartered Accountants)
& Loi & Mokhtar Consulting
Bintulu, Malaysia

ISBN 978-3-319-62475-4
ISBN 978-3-319-62476-1  (eBook)
DOI 10.1007/978-3-319-62476-1
Library of Congress Control Number: 2017948254
© The Editor(s) (if applicable) and the Author(s) 2018
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Acknowledgements

I felt deeply honored in 2012 when Bintulu Development Authority


permitted me to research into the practicing corporate social responsibility aspects of the organization since its establishment in 1978 for
advancing knowledge in the areas. Under the leadership of Bintulu
Development Authority’s top management, the recent industrialization process, and township modernization in Bintulu have moved to a
whole new level. Therefore, this study is timely and compelling in an
era calling for greater public accountability and sustainable development. As the premier industrial town in Malaysia, it seems that Bintulu
is well positioned to attain the friendly industrial city status by the year
2020 as articulated in the vision statement of Bintulu Development
Authority.
Outside my immediate environment, I am thankful to all the
dedicated staffs of Bintulu Development Authority who provided
the required information in making this corporate social responsibility intellectual discourse a success. In particular, I am indebted
to Mr. Shukarmin Chasemon, the deputy general manager of
Bintulu Development Authority and the chief internal coordinator of this research project, on his diligent liaison efforts on all the
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Acknowledgements

aspects concerning this research. I am also grateful to Department of
Environment, Department of Statistics, Malaysian Palm Oil Board,
State Health Department, the related private and public agencies, international reviewers, and family members for their efforts in providing
some crucial datasets, comments, and encouragements. Photo credits are also given to some online sources. Some portions of this book
are based on and adapted from some related research works previously
presented and published in several premier academic outlets such as
the Strategic Management Society’s special conference, Emerald Group
Publishing, and Routledge. The administrative and editorial work by the
Palgrave Macmillan team on this book project has been excellent.


Contents

1Introduction1
2 Theoretical and Managerial Framework13
3Contexts49
4 Integrating Corporate Social Responsibility
into Strategic Intent and Mission63
5 Integrating Corporate Social Responsibility
into Development Agency Role73
6 Integrating Corporate Social Responsibility
into City Council Role89
7 Transformative Corporate Social Responsibility107
8 Implications on Corporate Social Responsibility
and Corporate Sustainability159
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Contents

9 Concluding Remarks173
Appendix A: Research Methodology179
Appendix B: Development and municipal expenditures183
Name Index187
Subject Index191


Abbreviations

ADAB
BDA
CSR
EC
FDI
GDP
GLGs
ISO
PLCs
RECODA
RM
SCMD
SCORE
TGRI
The ASEAN
TQM
WEF

Australian Development Assistance Bureau
Bintulu Development Authority
Corporate Social Responsibility
European Commission
Foreign Direct Investment
Gross Domestic Product
Government-linked companies
International Organization for Standardization
Public Listed Companies
Renewable Corridor Development Authority
Ringgit Malaysia
Sarawak Chief Minister’s Department
Sarawak Corridor of Renewable Energy
The Global Reporting Initiative
The Southeast Asian Nations
Total Quality Management
World Economic Forum

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List of Figures

Fig. 3.1 Bintulu Development Authority’s headquarters in Bintulu 53
Fig. 3.2 Bintulu Development Authority’s municipal services center 53
Fig. 3.3 Organization chart of Bintulu Development Authority 55
Fig. 4.1 Bintulu development plan completed 66
Fig. 6.1 Trends in municipal income and expenditure 2009–2012 90
Fig. 7.1 Trends in financial performance and position 2009–2012 131
Fig. 7.2 Air quality status in Sarawak in 2012 138
Fig. 8.1Bintulu Development Authority’s practicing corporate
social responsibility model 161

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List of Tables

Table 2.1Corporate social responsibility trend and development
in Malaysia 17
Table 2.2 Corporate social responsibility and ethical practices 23
Table 5.1Contributions as a development agency—the first boom
period (1979–1988) 76
Table 5.2Contributions as a development agency—the second
boom period (1989–1998) 80
Table 5.3Contributions as a development agency—the third boom
period (1999–2008, till 2013) 83
Table 6.1Contributions as a city council—the first boom
period (1979–1988) 92
Table 6.2Contributions as a city council—the second boom
period (1989–1998) 94
Table 6.3Contributions as a city council—the third boom
period (1999–2008, till 2013) 100
Table 6.4Municipal services Center’s income and expenditure
2009–2012103
Table 7.1CSR and social programs by Bintulu
Development Authority 110
Table 7.2Community and social development projects by Bintulu
Development Authority 113
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xiv    
List of Tables

Table 7.3Three stakeholder management cases—background
and development 119
Table 7.4 Balance sheet for financial years 2009–2012 128
Table 7.5 Profit and loss accounts for financial years 2009–2012 130
Table 7.6 Revenue of municipal councils in Sarawak 132
Table 7.7 Expenses of municipal councils in Sarawak 133
Table 7.8Principal exports value and percentage distribution
in Sarawak 134
Table 7.9 Major investments in the oil and gas industry 135
Table 7.10Cargo exported and imported at principal ports
in Sarawak 142
Table 7.11Number of persons and average annual growth rate
by division in Sarawak 143
Table 7.12Major confirmed investment projects at Samalaju
Industrial Park 145
Table 7.13Bintulu central business district development
packages147
Table 8.1 Commonality in corporate social responsibility models 163


1
Introduction

Abstract  This chapter presents the introductory contexts, purpose
statements, research aim, and research objectives of this CSR research.
The organization is tightly embedded in the society and the natural
environment. Managing diverse interests of its stakeholders can be an
uphill task. Lacking of qualitative narratives on a holistic CSR process
coupled with diverse CSR definitions in the field might have eroded
the actual values of CSR in contributing to an organization’s sustained
value creation capability. That said, whether practicing CSR can generate resilient socioeconomical performances simultaneously requires
further academic investigations. This research takes CSR in a holistic
approach, i.e., examining its adoption in a firm’s strategic planning processes from multiple perspectives. It also accesses valuable governmental
datasets, covering the core functions of public sectors such as development agency and city council which receive little attention in the current literatures.
Keywords  CSR · Stakeholders · Holistic · Definitions · Value-creation
Strategic planning

© The Author(s) 2018
L. Teck Hui, Practising Corporate Social Responsibility in Malaysia,
DOI 10.1007/978-3-319-62476-1_1

www.ebook3000.com

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L. Teck Hui

The world and its natural laws interact with human societies to affect
the health, activity, life, and well-being of all living things. Different
natural components of the earth interrelate to determine how the
human can make choices to support sustainable development. Scientific
principles are applied to create inventions to support human progress
and to establish a sense of community that supports human endeavors. On the other hand, organizations are also established to address
the needs of communities via viable use of finite resources through economic exchanges. Mobilization of economic activities relies on systems
of production, distribution, and consumption of goods and services.
Satisfying the diverse interests of living things is dependent on a complex balance of interconnected factors. The organizations set corporate
missions, establish code of ethics, and develop crucial resource capabilities in order to deploy and share better the finite resources with other
living things.
Economic growth, social progress, and ecological balance are the fundamental components of sustainable development. An organization,
be it public or private, is not detached from the society and the natural environment. Given the tight interconnectedness of human-made
systems, communities, and environments, it is an uphill task for the
organizations to balance the diverse interests of their stakeholders in a
fast-changing world. Living up ethically to the sound corporate responsibilities whether can be something that actually has a bottom-line payoff for the organizations remains an enigma. Hence, there is an urgency
to look into the roles and manners of modern organizations in building
a better future without forsaking universal principles.
People cling on to or thrust aside social artifacts. Exploration and
exploitation with local and international mindedness can lead to new
understandings, opportunities, and changes. The object of management
is a human community held together by the work bond for a common
purpose. Management always deals with the nature of man, and with
good and evil (Drucker and Maciariello 2004). Its process in essence
is a system of interdependency (Miller and Whitney 1999). Pragmatic
management upholds the output, often justifying the inputs in terms
of the results. Corporate mishaps imperil modern enterprises’ influence
on others through morality practices. Accounting irregularities, insider


1 Introduction    
3

trading, and misuse of entrusted power for personal gains, as reflected
in the corporate failures around the world, still pervasive in the behavioral inputs to the modern management processes (Atkinson and Field
1995; Hui 2008, 2010). The pervasiveness of such phenomena in all
kinds of human-run organization can become an evolving organizational disease that impairs a firm’s long-term corporate sustainability.
As such, morality is still an issue of general concern especially where
the orthodox world of organizing is increasingly subjected to disordering. The existence of such trends provides another new opportunity to
understand organizations and to build more encompassing theories and
practices on corporate responsibility.
There is nothing inherently wrong with the fruits of affluent. The
current troubled world economies, corporate failures, and geopolitical
environments suggest that the perspective needs to be recalibrated. As
the steward of the earth, the human ought to safeguard the continuous
fruitfulness of the finite resources by developing all potentialities built
into the natural world (Atkinson and Field 1995; Hui 2008, 2010).

1.1Purpose Statement, Aim, and Objectives
1.1.1Purpose Statement
Milton Friedman (1970), a recipient of the 1976 Nobel Memorial Prize
in Economic Sciences, argues that the primary social responsibility of
business is to increase its profit without deception. There have been several works written to point out the limitations of his works especially in
a more agile kind of economy (Denning 2013; Grant 1991; Husted and
Salazar 2006; Mulligan 1986). A firm develops, acquires, and utilizes
resources to create the capability to endure. An unspoken key tenet of
corporate social responsibility (CSR) is that the society, within which the
firm operates, grants it the license to operate. Unfortunately, the unyielding need to maximize shareholder wealth has triggered corporate failures
(Chatterjee 2003; Jackson et al. 2013). In real world, any practice with
a negative externality that causes other to take a significant loss without
consent or compensation, can be seen as unethical (Cosans 2009). The

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firms ought to attain sustainability through balancing the complex relationship between current economic, environmental, and social needs,
also known as triple bottom line, in a manner that does not compromise
future needs (The Global Reporting Initiative [TGRI] 2002). Also, presenting business as a combative pursuit may not be practical in the social
era that would reward fluid organizations and transient competitive
advantage (McGrath 2013; Merchant 2012). A responsible competitive
advantage does not monopolize, but create healthy competition in the
long run that motivates other firms to provide even better goods and services (Hui 2008). Separately and together, the above developments raise
a relatively noble set of issues in CSR research to address the question of
what is the role of a firm in society.
A firm essentially is a strategic management system, concerned with
deciding on an actionable strategy for organizational effectiveness and
environment adaptation. Confirming and disconfirming in a standalone context is incomplete to explain the strategic value of CSR. There
have been concerns associated with some prominent yet futuristic CSR
paradigms with: (a) limited empirical testing; (b) confinement largely to
specific projects and products rather than the entire firm; (c) incomplete
CSR definition constructs used in explaining what constitutes multidimensional aspects of CSR; and (e) the tension between maximizing
profit for shareholders and optimizing returns for stakeholders (Crane
et al. 2014). In the current lackluster global economic and geopolitical
environments, it is critical therefore to consider the consequences of the
aforesaid concerns, and to re-examine the adequacy of the existing CSR
models that may not bode well for societies, ecologies, and firms.
That said, it is compelling to explore the current state of CSR being
practiced in major firms, in particular seeing the CSR intent, planning,
implementation, and evaluation processes, and how the CSR initiative
changes as the process of implementing and thinking about it changes
over time. To date, there has been little known about the areas as an
integrated, holistic process for sustained value creation. The actual position and the interactive process of a typical CSR planning cycle within
the firms’ larger corporate strategic planning process, and the firms’
strategic actions on their CSR performance also require further examination and clarification. Taken together, exploration in the areas can


1 Introduction    
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provide a more complete comprehension on the existing CSR phenomenon and the sustained value creation capability of CSR initiatives.

1.1.2Research Aim and Objectives
Against the above backdrops, the author conceives that CSR is much
more than an effective strategy or auxiliary social practice. Rather, it is
how the firm and its stakeholders interact and determine each other’s
future by sustaining the continuous fruitfulness of finite resources.
Thus, a central CSR question that this research aims to address is: does
a firm’s CSR and ethical practices really matter for it to fulfill economic selfinterests and societal expectations?
Using qualitative research methods, the research has the following
research objectives that seek to examine and understand holistically:
(a)the strategic intent and mission of a major corporatized governmental development agency and municipal services provider in
Malaysia, Bintulu Development Authority (BDA), in engaging
CSR practices;
(b)
the main features of stakeholder management mechanisms,
CSR planning and implementation processes, as well as major
stakeholder problem-solving incidences in order to ascertain
how the organization incorporates CSR strategies and programs
into its core routines for value creation;
(c)the management of CSR performance outcomes resulting from
the CSR initiatives and routines; and
(d)the value of CSR initiatives and sustained value creation capability of such initiatives to the organization in fulfilling its corporate goals and the expectations of its stakeholders.
Sections 2.2, 2.4, 2.5, 2.6, and 2.7 in Chap. 2 provide the theoretical
cores for the above four research objectives.
Emerging markets constitutes over two-thirds of the world’s population. The annual growth rates in gross domestic product (GDP) for
China and India have even sustained over the past few years at 7–10%.

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The emerging countries are gaining more economic and political clouts.
Country leaders, international managers, civil servants, and researchers
are in need of some guidance on how to respond to increased challenges
of practicing and maintaining corporate responsibility under the state
of uncertainty and value disparity. The emerging markets and emerging
firms can, therefore, be the important testing grounds for existing business models and theoretical concepts. Malaysia was ranked among top
20 most competitive economies 2014–2015 by the World Economic
Forum (World Economic Forum [WEF] 2014). Among its 13 states,
Sarawak has one of the strongest economies and is the only state to
receive an A-rating from Standard & Poor’s (Renewable Corridor
Development Authority [RECODA] 2014). Located in Bintulu of the
Sarawak state, the premier energy town of Malaysia, BDA is a representative local government, a prevalent form of governmental institution,
which can reflect the state of practicing CSR in the areas in Malaysia.
To strengthen the analytic generalization of this research and to
lessen the critical of disadvantages in limiting the research sample, the
author also conducted online information and secondary data analyses
on five representative city councils in the world to find out the commonalities of their CSR and social practices with BDA. The city councils are, namely Hong Kong District Councils, Vancouver City Council,
London Councils, Sydney City Council, and New York City Council.
The author believes that the findings of this CSR research can be replicated in other local governments.
What constitutes wealth creation remains an enigma when a firm is
deeply intertwined with the social milieu. It seems that the current challenging global economy can sound difficult for the firms to implement
CSR programs, not linked to their overall business strategies and profit
creation goals. This exploratory CSR study shows that by adhering to
good corporate citizen practices, the commitment to practice CSR as an
organizational core routine can be of value to the firms for demonstrating uniqueness that generates a form of corporate sustainability with
broader societal acceptance. It also informs the ongoing debate on the
strategic role of CSR, and highlights how governmental agencies adopt
CSR by providing novel descriptive data in the areas. This can be an
important first step for the subsequent large-scale quantitative research.


1 Introduction    
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1.2Chapter Outline
This CSR intellectual discourse consists of nine chapters with the following organizations and brief contents. From Chaps. 1 to 3, the author
reviews the related theoretical foundations and analyzes the contextual
backgrounds of the study. In what follows, the author analyzes and presents the research datasets, discusses the research findings (Chaps. 4 to 7),
and highlights the strategic implications of this research (Chap. 8),
before making the concluding remarks (Chap. 9). Appendices present
the research methodological issues and CSR budgetary figures.
Chapter 1. This chapter presents the introductory contexts, purpose
statements, research aim, and research objectives of this CSR research.
An organization is tightly embedded in the society and the natural
environment. Managing diverse interests of its stakeholders can be an
uphill task. Lacking of qualitative narratives on a holistic CSR process
coupled with diverse CSR definitions in the field might have eroded
the actual values of CSR in contributing to an organization’s sustained
value creation capability. That said, whether practicing CSR can generate resilient socioeconomical performances simultaneously requires
further academic investigations. This research takes CSR in a holistic
approach, i.e., examining its adoption in a firm’s strategic planning processes from multiple perspectives. It also accesses valuable governmental
datasets, covering the core functions of public sectors such as development agency and city council which receive little attention in the current literatures.
Chapter 2. This chapter surveys the related literatures in CSR and
strategy to establish the theoretical framework, in line with the research
aim and objectives. Section 2.1 reviews the trends of CSR concepts
and definition. A comprehensive CSR definition is, then, adopted. The
state of CSR trends and developments in Malaysia are also reviewed.
Section 2.2 deals with the related stakeholder literatures that form the
theoretical core to understand the state of BDA’s stakeholder management in addressing multiple stakeholder interests. Section 2.3 discusses
the dimensions of CSR and ethical business practices with specific
examples given in each of the dimensions. Section 2.4 contends with
the literature on strategic intent and strategic mission, Sect. 2.5 deals

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with the dimensions of CSR planning and implementation processes,
and Sect. 2.6 reviews CSR performance issues. The author examines
two major theories of the firm, the characteristics of a good strategy, and
the salient features of a transformative CSR in Sect. 2.7.
Chapter 3. The contextual information of BDA is examined in
this chapter. Malaysia was placed in the world top 20 in the Global
Competitiveness Index 2014–2015 compiled by the WEF. Bintulu,
where BDA is situated, is located in Sarawak, Malaysian Borneo.
It is known as a town of resource-based industry, oil and gas, as well
as renewable energy in Malaysia. Sarawak, on the other hand, is the
only state in Malaysia rated A by the Standard & Poor. The discovery
of large reserves of natural gas offshore in 1968 saw the turning point
for Bintulu from a coastal settlement to a major industrial town in
Malaysia. BDA was formed in 1978 to act as the central governmental
body that can both coordinate and implement development projects on
its own in the Bintulu region.
Chapter 4. This chapter examines the strategic intent and mission of
BDA in engaging CSR. The corresponding structured and action plans
that attempt to translate them into reality are also highlighted. The
vision and mission statements suggest that BDA has a future point of
view on CSR. Two master development plans, prepared by the established international consultants, have guided the orderly and integrated
socioeconomic developments of the Bintulu region since 1979. Also,
BDA is endowed with the authority of collecting land premium from
the sales of governmental state lands. The ability to generate its own
income increases the organization’s strategic flexibility to embed deeper
and broader CSR elements in all its corporate agendas for the betterments of its stakeholders.
Chapter 5. Whenever a firm organizes and strategizes its organizational routines, it triggers somehow the elements of the triple bottom
line. Chapters 5 and 6 analyze the core businesses of BDA as a governmental development agency and municipal services provider, and
the embeddedness of CSR perspectives in the two statutory functions.
Chapter 5 analyzes the role of BDA as a governmental development
agency, which entails it to embark on residential, industrial, and commercial development activities. Besides, BDA also undertakes business


1 Introduction    
9

ventures in collaboration with private firms through incorporating
companies; an additional authority not enjoyed by other local authorities. The organization’s major contributions, with CSR added on, in
the development of public infrastructures, industrial estates, housing
estates, and commercial centers over the past 35 years are presented.
Chapter 6. The major contributions of BDA, with CSR added on,
over the past 35 years in performing its municipal services provider role
are presented in this chapter. Municipal functions include provision
of sufficient public amenities and quality municipal services, engaging in community services, conducting valuation on ratable properties,
and charging rates on buildings. Both municipal income and expenditure have been on the rising trends, in line with the economic growth
in Bintulu. In 2012, the revenue and expenditure figures of BDA were
more or less the same as the combined figures of the North City and the
South City of the administrative capital of Sarawak, Kuching.
Chapter 7. Apart from integrating the triple bottom line elements in
the value statements and core routines of the organization, this chapter
analyzes the regular CSR and social programs carried out by BDA, three
major stakeholder management cases with international orientations,
CSR planning and control processes, and the corporate and social performance associated with the core organizational routines as well as the
CSR programs. BDA possesses strategic flexibility to select the projects
that will yield maximized financial returns. At the same time, it also has
the required financial strengths to enter, at the command of its major
stakeholders, those projects whereby the social and/or environmental
impacts outweigh the financial returns. The shared values created by
BDA, reflected as better population growth, industrialization, investment growth, standard of living, and urbanization in Bintulu, have
broader and longer term of transformative impacts on its stakeholders. The organization is able to fulfill its economic self-interests while
addressing fullest possible the expectations of stakeholders.
Chapter 8. This chapter presents a practicing CSR model of BDA and
the implications, contributions, and limitations of this research. A CSR
routine can be a valuable resource capability if a firm is capable of using
it to create competitive advantages that further its corporate agendas.
The holistic approach to researching and analyzing, used in this study,

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advances the knowledge in the areas. To lessen the critical of disadvantages
in limiting the research sample, this chapter presents also the CSR and
ethical practice commonalities between BDA and five other major city
councils. It seems that the resulting CSR and social practices do not differ
much from one council to another. The findings in this CSR research are
capable of making an analytic generalization to other major firms.
Chapter 9. This chapter concludes that by fulfilling an obligation
to make core organizational decisions with CSR added on, a firm can
demonstrate social responsibility values that benefit its stakeholders
apart from fulfilling its economic self-interests for achieving corporate sustainability. The large oil and gas reserves and richly resourcebased industries might have fueled the first 30 years of development
in Bintulu. In 2008, the region is embarking on the next 30 years of
growth with the launching of a renewable energy industrial park,
Samalaju Industrial Park, which has attracted confirmed investments
worth over Ringgit Malaysia (RM) 30 billion. This is a strategic industrial diversification which brings additional sources of revenue to the
economy of Bintulu region.
Appendices. The appendices explain the rationales for choosing the
qualitative research methods, different data collection techniques, additional field works done, sample selection, and data collection process for
this CSR study. This research has the access to valuable governmental
datasets of a major governmental development agency cum city council,
BDA which plays multifaceted governmental, societal, and business roles.
It has interfaced extensively with both notable local and international
actors in fulfilling its statutory obligations. Along the line, the organization’s years of budgetary figures with CSR added on are also presented.

References
Atkinson, D.J., & Field, D.H. (Eds.) (1995). New dictionary of Christian ethics and pastoral theology (Economic ethics, pp. 115–121). Leicester, InterVarsity Press.
Chatterjee, S. (2003). Enron’s incremental descent into bankruptcy: A strategic
and organizational analysis. Long Range Planning, 36(2), 133–149.


1 Introduction    
11

Cosans, C. (2009). Does Milton Friedman support a vigorous business ethics?
Journal of Business Ethics, 87(3), 391–399.
Crane, A., Palazzo, G., Spencer, L. J., & Matten, D. (2014). Contesting the value
of ‘Creating Shared Value’. California Management Review, 56(2), 130–153.
Denning, S. (2012, November 20). What killed Michael Porter’s Monitor
Group? The one force that really matters. Forbes. Retrieved from http://
www.forbes.com/sites/stevedenning/2012/11/20/what-killed-michael-porters-monitor-group-the-one-force-that-really-matters.
Drucker, P. F., & Maciariello, J. A. (2004). The daily Drucker. New York:
HarperCollins.
Friedman, M. (1970, September 13). The social responsibility of business is to
increase its profits. The New York Times Magazine.
Grant, C. (1991). Friedman fallacies. Journal of Business Ethics, 10(12), 907–913.
Hui, L. T. (2008). Combining faith and CSR: A paradigm of corporate sustainability. International Journal of Social Economics, 35(6), 449–465.
Hui, L. T. (2010). Christianity and organizational corruption. In S. S.
Agata (Ed.), Organizational immunity to corruption (pp. 215–224). NC:
Information Age Publishing.
Husted, B., & Salazar, J. (2006). Taking Friedman seriously: Maximizing profits and social performance. Journal of Management Studies, 43(1), 75–91.
Jackson, R. W., Wood, C. M., & Zboja, J. J. (2013). The dissolution of ethical decision-making in organizations: A comprehensive review and model.
Journal of Business Ethics, 116(2), 233–250.
McGrath, R. G. (2013). The end of competitive advantage: How to keep your
strategy moving as fast as your business. MA: Harvard Business Press Books.
Merchant, N. (2012, February 29). Why Porter’s model no longer works.
Harvard Business Review blog network. Retrieved from https://hbr.
org/2012/02/why-porters-model-no-longer-wo.
Miller, D., & Whitney, J. O. (1999). Beyond strategy: Configuration is a pillar
of competitive advantage. Business Horizon, 42(3), 5–19.
Mulligan, T. (1986). A critique of Milton Friedman’s essay ‘the social responsibility of business is to increase its profits’. Journal of Business Ethics, 5(4),
265–269.
Renewable Corridor Development Authority. (2014). Sarawak economy. Retrieved
from http://www.recoda.com.my/inside-sarawak/sarawaks-economy/.
The Global Reporting Initiative. (2002). Sustainability reporting guidelines.
Retrieved from https://www.globalreporting.org/.
World Economic Forum. (2014). The global competitiveness report 2014-2015.
Geneva: World Economic Forum.

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2
Theoretical and Managerial Framework

Abstract  This chapter surveys the related literatures in CSR and strategy to establish the theoretical framework, in line with the research
aim and objectives. Section 2.1 reviews the trends of CSR concepts
and definition. A comprehensive CSR definition is, then, adopted. The
state of CSR trends and developments in Malaysia are also reviewed.
Section 2.2 deals with the related stakeholder literatures that form the
theoretical core to understand the state of BDA’s stakeholder management in addressing multiple stakeholder interests. Section 2.3 discusses
the dimensions of CSR and ethical business practices with specific
examples given in each of the dimensions. Section 2.4 contends with
the literature on strategic intent and strategic mission, Sect. 2.5 deals
with the dimensions of CSR planning and implementation processes,
and Sect. 2.6 reviews CSR performance issues. The author examines
two major theories of the firm, the characteristics of a good strategy, and
the salient features of a transformative CSR in Sect. 2.7.
Keywords  CSR · Literature review · Definition · Malaysia
Stakeholder management · Ethical business practice · Implementation
Transformative CSR
© The Author(s) 2018
L. Teck Hui, Practising Corporate Social Responsibility in Malaysia,
DOI 10.1007/978-3-319-62476-1_2

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The concept of CSR has already existed in different names, forms, and
practices before the beginning of its growing popularity in the late
1990s, the aftermath of major economic crises and corporate debacles.
The CSR ranks high on corporate practice and academic research agendas. Regulators even introduced the Sarbanes-Oxley Act and the Higgs
Report for corporate reforms. The classic view holds that the fundamental goal of a manager is to maximize a firm’s profit. Conversely, the happening of corporate failures informs the importance of aligning a firm’s
strategy process with appropriate morality values and management practices in order to create, deliver, and share value.
This chapter has the following organization. Section 2.1 reviews in brief
the origins and evolution aspects of CSR concepts. A well-encompassing
CSR definition is, then, searched and adopted. The state of CSR developments in Malaysia, informed by the existing literature, is also presented.
Section 2.2 presents the core stakeholder literatures, seeking to investigate
the state of BDA’s stakeholder management mechanism in addressing
and balancing multiple stakeholder interests. Section 2.3 provides some
specific examples in each dimension of CSR and ethical business practices identified with reference to the CSR definition adopted in Sect. 2.1.
The categorizations of CSR and ethical business practices that form the
framework for analyzing the commonality of the practices between BDA
and five other major city councils in the world are presented in Sect. 8.2,
Chap. 8. In what follows, Sect. 2.4 deals with the literature on strategic
intent and strategic mission, Sect. 2.5 copes with the dimensions of CSR
planning and implementation processes, and Sect. 2.6 reviews CSR performance issues. Before wrapping up Sect. 2.7, the author examines two
major theories of the firm, the characteristics of a good strategy, and the
salient features of a transformative CSR.

2.1Corporate Social Responsibility Concept
and Trend in Malaysia
The antecedents of CSR concepts, definition constructs, and trends covering the period between the 1950s and 2010s have been reviewed extensively in several works (Carroll 1999, 2008; Carroll and Shabana 2010;

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