A Quest for Ethical Framework for Corporate Social Responsibility (CSR) in Ethiopia

Ismail Kedir*

Ethiopian is one of the developing nations whose governments heavily rely on foreign donors’ funds to appease various societal problems. A voluntary or mandatory engagement of various organizations in an effort to ease social problems will lessen government’s responsibility in this regard.  Scholars argue that CSR approach in Ethiopia is mainly voluntary by nature. Moreover, a “make-up” to damage of their reputation or philanthropic addressing of temporary socio- economic problems is the motive behind the engagement of many Ethiopian companies in CSR.

According to report published by EU in 2011, CSR is seen as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders. Nowadays, promoting CSR has come to be a central theme of public policies for private sector development. Many successful examples of corporations that benefit from an integrated approach to marketing and CSR should motivate any CEO who believes that no communication about corporate social initiatives is best, to reconsider this policy.

This win-win perspective on the relationship between CSR and long-term profitability is convincing. It seems that the more a firm can benefit from its social initiatives the more it will be inclined to integrate CSR on a strategic decision-making.

According to Bert van de Ven, a firm should not brag about corporate social initiatives, but there is an important difference between touting one’s philanthropic activities and keeping stakeholders informed. Kotler and Lee also acknowledge this problem from a strategic perspective and offer an old solution: do good and let others talk about it (for example the non-profit partner). Make sure you get an award from others or that they thank you on their website. The justification that Kotler and Lee give for their strategic approach to corporate social initiatives is essentially, although implicitly, consequentialist in nature. Everyone benefits from a strategic approach. This win-win perspective on the relationship between CSR and long-term profitability is convincing. It seems that the more a firm can benefit from its social initiatives the more it will be inclined to integrate CSR on a strategic decision-making.

Drucker argues that regardless of the triggering factors or the decision makers’ motivations, corporate social responsibility actions have long-range strategic implications that influence the successful operation of the firm. On the one hand, social responsibility actions could preclude or minimize restrictive government action; social programs likewise might decrease adverse public reaction and opinion toward business.

Social responsibility actions of the firm hold the potential for promoting positive acceptance of the organization, thus increasing its competitive position in relationship to its industry rivals. As consumers tend to personalize the relationship with a corporate brand, it should come as no surprise that they judge the ‘personality’ of the corporation as if one is actually dealing with a moral person. Bert van de Ven emphasizes that one might believe that given the skepticism of the consumer it is best not to communicate at all about the CSR initiatives. However, if companies do not inform consumers properly about the CSR initiatives they take, they will not, or to a lesser extent, reap the benefits of their investments in CSR.

In developed countries like U.S. and U.K., models of corporate social responsibility (CSR) are relatively well defined. As the phenomenon of CSR establishes itself more globally, the question arises as to the nature of CSR in other countries. Hamann suggests that the need for focused CSR in developing economies is critical particularly with the concern that current approaches to CSR, with their origin in developed countries, “may not sufficiently relate or respond to the context and circumstances encountered in developing economies”. According to Blowfield and Frynas, developing countries do not share the same cultural and social values, norms and priorities that underpin CSR in ‘western’. Thus, the consumers also likely to respond differently for marketing of corporate social responsibility

In his master thesis conducted on 2018, Solomon states that “due to the lack of clear policy on what constitutes CSR in Ethiopia, businesses are using the opportunity negatively. But some believe that even if other business competitors are not contributing, they should at least refrain from their negative impact.” Moreover, Deyassa emphasizes that the notion of CSR is still at an infant stage in Ethiopia and the application of CSR concept is viewed as corporate charity to solve socio-economic challenges temporarily.

It is also understood that there is a strong correlation between social and environmental impacts and expectations for limited mandatory approach.

Some scholars in Ethiopia call for a slight mandatory approach with respect to CSR as we can observe major social and environmental impacts of corporate activities. It is also understood that there is a strong correlation between social and environmental impacts and expectations for limited mandatory approach. Thus, there is a widespread interest to address and be concerned about an ethical framework of corporate social responsibility in Ethiopia.

*Lecturer, Department of Management, Collage of Business & Economics, Addis Ababa University. The author can be reached at: ismail@cssethiopia.org / ismailkedir@gmail.com

The views expressed in this article are the author’s own and do not necessarily reflect ECS’s editorial stance.

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