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Corporate social responsibility in Peruvian company: creating shared value or a cosmetic virtue?

Kerkenaar, M.L. (2013) Corporate social responsibility in Peruvian company: creating shared value or a cosmetic virtue?

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Abstract:Corporations are forced to be more ethical and more transparent in doing their business and are challenged to develop new business strategies that facilitate sustainable actions and growth. This is known as corporate social responsibility (CSR) and is based on the intersection between business and societal conditions which causes society to have certain expectations of business. Stakeholder theory tries to answer the question to whom the corporation is responsible. In the hope to achieve a meaningful social impact as well as strengthen the long-term competiveness of the organization, a strategic dimension is added to CSR: “creating shared value”. Based on these points the following research question is formulated to drive this research project: To what extend does the corporate social responsibility practices and stakeholder management of a beauty company case Peru contribute to create shared value? A multinational corporation with headquarters in an emerging markets was chosen to fill up the gap of traditional CSR research that (mostly) focuses on developed countries. A case study was carried out in order to gain a better understanding and be able to analyse in-depth the company’s information (internal and contextually). Nine managers were interviewed faceto- face, through a semi-structured questionnaire. This latter was complemented by applying research participant observation techniques and documentation analysis to draw conclusions. These were the research methods used to approach the research question. The research showed that the beauty company has a gradual, informal approach to CSR without high investments, most of the responsibilities that the company engages in can be seen as “ethical responsibilities”. The involvement of stakeholders relies on goodwill and managerial discretion. The owners of the beauty company play a crucial role in the strategy of the company. The lack of governmental regulatory capacity drive the beauty company to CSR activities because they try to fill in the gap the government leaves. Also the influence of the international market drives the company towards CSR activities because they have to prove to the international community that they do business in a fair and responsible way. The beauty company is giving an opportunity to disadvantaged women and their families and this is how the company creates shared value. This is a form of reconceiving products and markets, because disadvantaged comities are served. Even though the beauty company does make social contributions, findings have shown that the beauty company should come up with a more integrated corporate approach whereby stakeholders are involved if the beauty company wants to claim its CSR performance accordantly to the stakeholder management dimension of CSR. They should also make it clear for external stakeholders what their approach is. This latter more specifically for external stakeholders. In this way it can become transparent that the beauty company truly accepts their responsibility to work towards a sustainable future. The beauty company has proved to have a unique strategy to asses unattended markets. It seems that because of the contextual restrictions it has adopted an approach that creates value for the company as well as the society. Western MNC can learn some lessons from this way of doing business since the alignment of social value creation with corporate strategy is receiving more attention and this fields requires active research on findings ways how to do this.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/63718
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