Literature Review Chapter: CSR in Saudi Firms Corporate

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[. . .] Considering that the case study firms are typical examples of Chinese businesses, our conclusion is that CSR engagement is low in all

of China. Zhang (2008)

For cultural and historical reasons, Chinese private businesses have been given low

status in all industrial sectors in China. Socialist China has traditionally been opposed

to Capitalism, which in practice is represented by private business. During the Great

Leap Forward and the Cultural Revolution, all individuals were required to work for the commune and the state: having a small private business was considered as pursuing capitalism, and hence was considered to be anti-socialist. With such a strong political position, many private businessmen were brutally purged, and many of their families suffered as well. So historically, Chinese governmental policies have always favoured SOEs and not given concession to private businesses. Since the economic reform, the Chinese state has softened their attitude to private business, but businessmen still distrust the stability of the current policy. Zhang (2008) p. 221

In both China and the Eastern European countries, central and local governments have a strong influence on CSR but have limited willingness to stimulate CSR: local governments have considerable power, including the right to levy their own taxes established by the regional legislatures, and the economic performance of the region has great importance for local politicians because of the way they are themselves judged. Hence different interests between the government, enterprises and individuals have made

CSR a negotiation process between the state, enterprises, and individuals. Zhang (2008)

Russell (2010) synthesizes an assortment of theories into an explanatory framework to construct the understanding for the collection and analysis of qualitative data he later draws from the UK oil and gas industry. The current study as the study by Russell considers the interdependence of CSR strategy formulation and the firm managers' individual beliefs, perceptions, and biases. These beliefs, which appear to constitute the primary factors which influence CSR decisions "are tempered by balancing shareholders' interests and stakeholders' expectations, and are affected by the global (in the case of corporations) or the local (in the case of corporate subsidiaries and small-medium size enterprises) contexts" (Russell, p. 5). Additionally, business leaders have to reconcile industrial, personal, organizational, global, and societal values as well as ethical beliefs; and simultaneously balance traditional organizational goals like profit maximization. These constraints coupled with the need to increase stakeholder empowerment; granting social legitimacy present critical challenges business leaders currently face.

The personal engagement of employees, and chiefly that of top-level leadership determines the quality of CSR implementations. The in-depth case study by Schwedler, Lewis, and Birkin (2010) examines the implications of the adoption of CSR practices within a UK water business. This study additionally relates considerations of significant stakeholders involved in the process; something the researcher also does in the current study. Despite a strong ethical commitment, Schwedler, Lewis, and Birkin find, the business case proved to arise as the dominant strategic factor. These authors also determined that external disturbances and pressures served as the most noteworthy influences of fundamental changes; indicated a need for more government intervention exists.

Considerations for Saudi Firms

Dusuki (2005) considers a number of theories founding CSR in regard to Shari'ah (the Islamic law),the principles that underpin this particular philosophy and principles (the Objectives of Shari'ah or Magasid al-Shari'ah) and their application to business and society. Dusuki argues that the Western perception of CSR traditionally aligns more with a materialistic philosophy than ethical concerns and that it does not include any fixed guiding principle of moral conduct to social responsibility. Dusuki further claims that the Islamic perception of CSR promotes practices based on the teachings of the Quran and the Sunnah. Determining what proves beneficial and what proves harmful cannot be left to human reasoning alone, Dusuki insists. The researcher agrees with Dusuki (2005) that a number of views exist regarding consequences of implementing CSR. The researcher challenges the claim, however, that "Islamic banks are expected to show a higher level of social responsibility than theirconventional counterparts since they are ultimately based on Shari'ah" (Dusuki, p. 215). Unlike the study by Dusuki, who prejudicially asserts that the characteristics of Islamic worldview dramatically supersede that of Western worldview, the researcher attempts to present research in a more objective manner.

Vassileva (2008) relates a number of possibilities that exist for Bulgarian companies to develop and demonstrate CSR. The current study addresses two similar relevant research concerns similar to Vassileva. These include the current situation of CSR in the country of focus and the firms' attitudes toward CSR in the country of focus. In any country, a needs to invest much goodwill and efforts to follow the progressive practices of corporate responsibility and become a good citizen.

Maon, Swaen, and Lindgreen (N.d) note that in time, CSR has progressed from ideology to reality. Business leaders currently attribute more significance to this subject as they recognize that in the 21st century, CSR portrays a vital component of business survival and success. Many firms also now acknowledge CSR as an essential dimension of contemporary business practice. Maon, Swaen, and Lindgreen present four stages for CSR implementation. These four stages integrate the following nine steps:

1. Raising CSR awareness inside the organization,

2. assessing corporate purpose in a societal context,

3. establishing a working definition and vision for CSR,

4. assessing current CSR status,

5. developing an integrated CSR strategic plan,

6. implementing the CSR integrated strategic plan,

7. maintaining internal and external communication,

8. evaluating CSR integrated strategies and communication and,

9. finally, institutionalizing CSR policy. (Maon, Swaen, & Lindgreen, N.d., p. 16)

In a similar, yet distinctly different way, the researcher relates a number of specific steps that could help Saudi firms incorporate CRS.


Baldo, M.D. (2009). Corporate social responsibility and corporate governance in Italian SMEs the experience of some spirited businesses. Journal Management Government.

DOI: 10.1007/s10997-009-9127-4

Carroll, A.B. (1999). Corporate social responsibility: Evolution of a definitional construct.

Business Society, 38; 268-295. DOI: 10.1177/000765039903800303

Dusuki, A.W. (2005). Corporate social responsibility of Islamic banks in Malaysia: A synthesis of Islamic and stakeholders' perspectives. Loughborough University

Hillenbrand, C., Money, K. & Pavelin, S. (2011). Stakeholder-defined corporate responsibility for a pre-credit-crunch financial service company: Lessons for how good reputations are won and lost. Journal of Business Ethics. DOI: 10.1007/s10551-011-0969-8

Hong, Y. & Andersen, M.L. (2011). The relationship between Corporate social responsibility and earnings management: An exploratory study. Journal of Business Ethics.


Ioannou, I. & Serafeim, G. (2010). The impact of corporate social responsibility on investment recommendations. Best Paper Proceedings, Academy of Management. Harvard Business School.

Maon, F., Swaen, V., & Lindgreen, A. (N.d.). Mainstreaming the corporate social responsibility agenda: A change model grounded in theory and practice. IAG- Louvain School of Management Working Paper

Peloza, J. & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review. Journal of the Academy of Marketing Science, 39, 117 -- 135. DOI: 10.1007/s11747-010-0213-6

Russell, E.O. (2010). CEO and CSR: Business leaders and corporate social responsibility. Retrieved from von Schwedler, M. Lewis, L. & Birkin, F. (2010, October 14-15). Implementing CSR: An in depth case study. Conference on Environmental Management and Accounting - School of Technology and Management (ESTG), Leiria, Portugal

Vassileva, B. (2008). Implementing CSR in Bulgaria: "Push" vs. "pull" approach. The Fondazione Eni Enrico Mattei Series Index. Retrieved from

Zhang, D. (2008). Corporate social responsibility in… [END OF PREVIEW]

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CSR in Saudi Firms Corporate.  (2011, November 1).  Retrieved May 20, 2019, from

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"CSR in Saudi Firms Corporate."  1 November 2011.  Web.  20 May 2019. <>.

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"CSR in Saudi Firms Corporate."  November 1, 2011.  Accessed May 20, 2019.