A Diversity Perspective
Edited by Mine Karataş-Ozkan, Katerina Nicolopoulou and Mustafa F Özbilgin
Chapter 14: Leadership and CSR in developing countries: the case of the UAE
Industrialization, modernization and the inevitable phenomenon of globalization have transformed the role of business organizations in the community. Corporate social responsibility (CSR) refers to a firm’s responsibility towards the society it operates in. This concept has gained significance over the last three decades. With rising consciousness of organizational leaders about the consequences of their firms’ actions on society, CSR becomes one of the most extensively discussed topics at management meetings. This in turn implies that corporate leadership has a remarkable influence on the CSR approach that firms adopt and, in turn, its social performance. McManus (2008) states that truth undergoes three stages: first, it is mocked, then insistently opposed and lastly acknowledged as plain obvious. Debate on the role of business in society has had a similar experience. There are two prominent viewpoints on the role of business in society. According to the classical school of thought, supported by Friedman (cited in Schwartz and Carroll 2003), the primary role of business organizations is to legally maximize profits and increase shareholder value. The society is the responsibility of the government. However, the alternative school of thought advocates that firms have equal responsibility towards all stakeholders and society in general. Organizations, their stakeholders and society exist in a dynamic symbiotic relationship. The evolving nature of the business environment no longer permits firms to be independent and unaccountable (Qasim et al. 2011).
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