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Corporate Social Responsibility

CSR Factor for Bangladesh

ABSTRACT

CSR concept is a notion whereby Corporate put the social and the environmental concerns together in their business operations, also their connections with their stakeholders on a voluntary basis (Green Paper, 2001). Social responsibility implies not only the responsibility of fulfilling the legal obligations, but also honoring the requisite compliance and investing further for society, the environment and for the interest of stakeholders.

CSR is not exclusively meant for the large companies but also include small scale SME’s too. For a developing country like Bangladesh, where all businesses, let it be large or small, are key contributors in enhancing country’s competitiveness, adoption and implementation of such practice should be a mandatory exercise. By embracing the values of CSR, private sector of Bangladesh can send a message to the global market, of their discharging their commitments towards society. This will help them to avoid the external pressure, which comes often with more stringent guidelines. The strategic social responsibility practices, constantly applied in Bangladesh, are going to improve the domestic competitiveness of the private sector vis-à-vis global competition. Thus Bangladesh will develop an international image as a responsible global manufacturer and service provider.

The alliance of CSR initiatives lies primarily with social and staff concerns, with hardly any initiative acknowledging the environmental issues as a facet of the CSR notion. This is because of the incidence and visibility of social issues like over-population, poverty and unemployment in the society
As the motive behind the adaptation of CSR activities is mainly instrumental or ethical, so it become evident that for initializing such activities firms can be motivated through factors associated to ethical and instrumental perspectives. Ethical factors can be associated with the Muslim religion. And for instrumental perspectives government should start providing privilege to those firms involved in CSR.

Corruption is notified by the respondents as a severe obstacle for CSR. It is consistent with the information supplied by many other researchers, as given in the literature review chapter. It frames the ground for future studies to explore the relationship between corruption and CSR.

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1: INTRODUCTION

Although a voluminous work has been carried out over the past some decades on corporate social responsibility i.e. CSR, yet the focal point has been commonly on CSR in the developed countries (de Bakker, Groenewegen, and den Hond, 2005). Just not the literature, which is less inexhaustible on CSR in the developing countries yet the works in this area, is inclined towards certain countries rather than others. Certainly, in a evaluation of research specially on CSR in the developing countries, Visser (2008) draws attention to the point that majority of studies on this aspect, most frequently concentrate on China, India, Indonesia, Malaysia, Pakistan and Thailand. Visser places Bangladesh among the countries, which have remained under researched particularly in terms of the CSR notion. This dissertation aids contribution towards addressing the rareness of works on CSR for Bangladesh by means of reporting the outcomes of this exploratory research conducted on sample of Bangladeshi firms.

After a nine month long war of liberation, Bangladesh was declared as an independent and sovereign country in the year 1971. One of the largest deltas of the world covering a total area of 147,570 sq. km., here lives a population of about 142.32 million. Bangladesh is one of the densely (964 per sq. km.) populated countries of the world. The majority of the population (over 89.6%) belongs to Muslim religion. In spite of over 98% Bangla speakers, English is also widely spoken here. Bangladesh plays a vital role in the international and regional forum, particularly in the South Asian Association of Regional Cooperation (SAARC), UN and Commonwealth countries. Major industries in Bangladesh are Ready made garments (RMG), paper, sugar, jute, pharmaceuticals, newsprint, leather and leather goods, ship building, cements, garment accessories, fertilizers, and chemicals, which are mostly dependent on unskilled labor and work force.
Bangladesh is one of the world’s poorest countries. It is in the developing stage of its life cycle. According to German Federal Ministry for Economic Cooperation and Development (2000), more than 40% of its population can be attributed as extremely poor.
Below figure gives the glimpse of investment trend in Bangladesh. Here, the private sector companies are in the majority. Also, the growth rate of private sector investment is steep whereas it is almost stagnant for public sector.

The growth rate is lagging. Current state is fragile, and it is partly able to fulfill core errands like basic education or the security need. Human trafficking is another big question here along with the presence of the mafia and underworld. All these weaknesses led to an economy with corruption and distortion. Here, regulation and direct stimulation of certain sectors is almost absent. Bangladesh is an example of the economy which fails to regulate externalities. Investment and innovation are almost at extinct stage. Entrepreneurs and business houses are not really accountable for degrading the environment, or creating dangerous and unhealthy working surroundings (The daily star, 2006).

CSR concept is a notion whereby Corporate put the social and the environmental concerns together in their business operations, also their connections with their stakeholders on a voluntary basis (Green Paper, 2001). Social responsibility implies not only the responsibility of fulfilling the legal obligations, but also honoring the requisite compliance and investing further for society, the environment and for the interest of stakeholders. CSR includes all kind of corporate houses; let it be MNC’s or the local companies. There is no particular regulatory body in Bangladesh, which can guide CSR activities. Some of the CSR supportive laws in Bangladesh are as under:

  • • ISO 26000;
  • • GRI;
  • • HACCP;
  • • ISO - 14001;
  • • SA 8000;
  • • OHSAS - 18001;
  • • UN Global Compact;
  • • Bangladesh Labor Law 2006.

Some companies are currently involved in CSR practices in different fields. For example, Heidelberg Cement, involved in school education as well as vocational training, the Otto Group, opened a model textile factory, also BASF SE and Grameen Healthcare Trust, and launched BASF Grameen Ltd. for improving healthcare.
The interest in CSR initiatives in Bangladesh is largely fuelled by MNCs. Because developing countries like Bangladesh are more and more exposed to global standards. In order to meet the importer’s requirements, it becomes mandatory for companies to go for these sorts of practices (Quazi, & O'Brien, 2000). Growth of CSR in Bangladesh is anticipated to be continued. Also from a marketing stance, it is gaining attraction of Bangladeshi companies for some strategic reasons. These firms use their CSR accounts for improving the image by social marketing as socially responsible firms. Such marketing tactics influence consumer buying in favor of the firms.

There are two private institutions in Bangladesh, where companies can seek support for CSR exercises, one is the Bangladesh Enterprise Institute (BEI) and another is the CSR Center Bangladesh.
Also known as BEI is a non-political, non-profit research centre. Founded in October 2000, this Institute focuses on the growth of private businesses of Bangladesh through its extensive research work. The Institute tends to promote concerns related to the private sector and inclined towards initiating essential measures and influence policies for developing a market-oriented economy. By means promoting sustainable growth in domestic trade, commerce and industry, BEI’s intention is to address the massive challenge for Bangladesh’s sustainability in the global market (BEI, 2012).

CSR centre was established with an aim to raise corporate social responsibility awareness among the private sector enterprises. The goal of this organization is to encourage sustainable development by reasonable business practices. It is registered as a Trust, under the Bangladesh Trust Act 1882. It was established as a non-profit organization in August 2007. It was launched publicly in September 2007 under the guidance of a Board of Trustees.
The main objective of this organization is to become the key source of resources, information, and advisory services for CSR in Bangladesh, all together with the operational principle of contributing in the achievement of the human development targets.

Besides the prime objective of creating awareness about this concept amongst Business Communities of Bangladesh, CSR Centre also conducted studies on behalf of overseas investors concerning the present Social responsibility condition and sustainability issues in different areas of Bangladesh in different business sectors.

These bodies provide tools for helping them in improving their performance. It also serves as a network for the exchange of views and experiences. Both institutions together provide a hub for companies looking for alternatives to get involved in CSR activities in Bangladesh (CSR Company international, 2012).
A qualitative research is carried out from the primary data collected through a semi structured interview method. Those interviews are taken through questionnaire. These questionnaires consist of open ended and closed ended questions. These interviews are conducted for managers of three different industries (Ryan, Scapens, & Theobald, 2002). The interviews will be arranged at their workplaces. The aim of carrying out these interviews is to evaluate the current perceptions of their about corporate social responsibility and finding out the reasons which can encourage them to engage more into socially responsibilities.
This dissertation is segregated into six chapters to follow the proper research process. These are named as follows Introduction, Literature Review, Research Methodology, Data analysis and findings, Discussion and interpretation of findings and finally Conclusion, implications and recommendations.

Chapter one is of introductory chapter. This chapter will acquaint the reader with the ground of the study. Here the research aims, objectives methods etc. are disclosed. At the beginning of the chapter, economic scenario of Bangladesh and CSR form the view point of Bangladesh is sketched. Later, the process of the research, its significance and importance are stated. The second chapter deals with the literature review. This chapter provides details about the previous studies on the concerning topic. Also define the key terms and provide theories required for the completion of the study. This chapter is concluded giving ground to the research. Research tools and methods used for deriving the objectives of the study are defined here. Complete illustration of the process from data collection to the final data analysis and interpretation is described in this section. Techniques of sampling, sample size, data analysis tools are also given here. Data analysis and findings chapter is numbered four. Here at the initial stage, primary data, collected through interviews, is discussed and analyzed. Also definition of variables used and the survey techniques is given in the early section of the chapter. In this analysis are done using charts and tables for each instance observed from the questionnaire. In the fifth section of the dissertation a detailed discussion of findings is done. Through the discussion, research interpretations are prepared. Such interpretations are further generalized to be implemented for the population under study at large, i.e. Bangladesh. In the end, all findings of the study are summarized along with the limitations of the study. Finally dissertation help ends by giving ground to the further research opportunities.

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REFERENCES

  • Bangladesh Bureau of Statistics (2008) Statistical Pocketbook of Bangladesh. [Online] Retrieved from: <http://www.bbs.gov.bd/dataindex/pby/pk_book_08.pdf,> [Accessed 7 June 2012].
  • Bangladesh Enterprise Institute (2011) [Online] available at: <http://www.bei-bd.org/what-we-do.php> [Accessed 7 June 2012].
  • Bebbington, J., & Gray, R. (2001) An Account of Sustainability: Failure, Success and a Reconceptualization. Critical Perspectives on Accounting, 12(5), 557-588.
  • Belal, A. R. & Owen, D. L. (2007) The views of corporate managers on the current state of, and future prospects for, social reporting in Bangladesh. Accounting, Auditing & Accountability Journal. 20(3), 472-494.
  • Belal, A. R. (2001) A study of corporate social disclosures in Bangladesh. Managerial Auditing Journal, 16(5), 274.
  • Belal, A. R. (2002). Stakeholder accountability or stakeholder management: a review of UK firms' social and ethical accounting, auditing and reporting (SEAAR), Corporate Social Responsibility and Environmental Management. 9(1), 8-25.
  • Belal, A. R. (2008) Corporate Social Responsibility Reporting in Developing Countries: The Case of Bangladesh. Aldershot: Ashgate.
  • Belal, A. R., & Cooper, S. (2011) The Absence of Corporate Social Responsibility Reporting in Bangladesh. Critical Perspectives on Accounting, 22(7): 654-667.
  • Belal, A. R., & Owen, D. (2007) The Views of Corporate Managers on the Current State of, and Future Prospects for, Social Reporting in Bangladesh: An Engagement Based Study. Accounting, Auditing & Accountability Journal, 20(3): 472-494.
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