Theoretical Perspectives on Corporate Social Responsibility Disclosure: A Critical Review

Abstract

This study provides an extensive critical review of the theoretical perspectives applied on corporate social responsibility (CSR) disclosure literature. From a CSR standpoint we review and discuss, in detail, legitimacy theory, stakeholder theory, social contract theory, and signalling theory to identify the situations that suit each of these perspectives. The findings show that there is no universal theory applicable on corporate social responsibility disclosure for all situations or societies. While legitimacy theory suggests CSR disclosures are part of a process of legitimation, stakeholder theory offers an explanation of CSR accountability to stakeholders. Legitimacy theory seems to be more suitable for organizations working in developed countries, on the other hand, stakeholder theory appears to be most suitable for organizations working in developing countries; where a corporation can manage its stakeholders and the pressure to comply with existing legislation is less as compared to the developed countries. Social contract theory is appropriate for developed/emerged economies, as CSR disclosure exists due to an implicit social contract between business and society, which implies some indirect obligations of business towards society. Signalling theory will suit a situation where firms are competing for resources. A firm willing to demarcate from other firms will engage in more CSR practices. It is also important that the signal reaches the target audience by reporting on CSR.

Corporate Point of View in Green Accounting

“…Deegan and Unerman (2011) in Omran and Ramdhony (2015) explained that the legitimacy theory relied on the notion that there was a "social contract" between an organization and the society in which it operated. The legitimacy theory uses motivation to get the endorsement from the community as said by Laan (2009) in Tarigan and Semuel (2014).…”

Sustainability Initiatives of Fly-Fishing Lodges: A Global Approach

“…To znači da organizacije trebaju poštivati mišljenja drugih dionika te nastojati graditi intersubjektivno razumijevanje i jasno definirati pravila igre (Habermas, 1979). Nadalje, u istraživanjima društveno odgovornog poslovanja koristi se i teorija legitimiteta kako bi se objasnilo zašto se poslovni subjekti odlučuju objaviti podatke o ekološkim i društvenim aspektima svojega poslovanja (Omran, 2015). Prema ovoj teoriji, poslovni subjekti trebaju djelovati unutar granica onoga što društvo identificira kao društveno prihvatljivo ponašanje.…”

“…Istraživanje je pokazalo da popularnije kući-ce ulažu veće napore u društveno odgovorno poslovanje i izvještavanje o njima nego one manje popularne. Tu je činjenicu moguće objasniti korištenjem teorije legitimnosti (Omran, 2015), pošto su popularnije kućice istovremeno i vidljivije i nalaze se pod većim pritiskom dionika da ispune društvene norme i očekivanja. Usto, posvećenost koju kućice pokazuju prema problemima zaštite okoliša i uključivanju u zajednicu (dvije najpopularnije teme) predstavljaju neformalno nastojanje za osiguranjem dopuštenja za nastavak djelo-vanja u svojoj zajednici.…”

“…Additionally, legitimacy theory has been applied in CSR research to explain why companies decide to disclose environmental and social information about their operations (Omran, 2015). This theory states that companies need to act within the bounds of what society identifies as socially acceptable behaviour and that as sustainability concerns are more widely shared by the general public, companies choose to adopt and report on CSR in order to maintain social licence to operate.…”

CSR initiatives by companies for employees through social protection measures

“…Review of the extent literature revealed that research in CSR were mainly concerned with CSR disclosures [3,7,8], corporate governance and strategic management [9,10], and the emerging political CSR [2,11]. Debates on CSR revolved around what theories are most suitable for companies to justify the basis of their CSR activities.…”