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A CASE STUDY OF CORPORATE SOCIAL RESPONSIBILITY IN MALAYSIA

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A CASE STUDY OF CORPORATE SOCIAL RESPONSIBILITY IN MALAYSIA

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Members of the Group 3:

1. ELVIN FAN PHEI QIN  | 69580

2. FILZAH SYAZWINA BINTI ABD RAHIM | 72239

3. MOHANA A/P MUTHURAJA | 70453

4. YUSRI BIN ABD HALIM | 72019

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CSR refers to a company's continual promise to perform ethically and responsibly success while also enhancing the livelihood of its individuals and families, and also the local people and wider society. Corporate social responsibility is more than just a passing phase or business trend. Businesses that adopt CSR will benefit if they choose to remain relevant to millennials and help those in need all over the globe while raising profits and efficiency. CSR has evolved through time; it is now more than just contributing to charity; it is a critical component of how businesses function, with an emphasis on consumers' perceptions of organizational governance, the company's positive influence on society, and how it treats its employees. The general populace feels the company acts ethically, conducts its business fairly, operates honestly, helps the environment, and contributes to worthwhile causes. The company was pointed out for its critical applications to CSR initiatives, which is vital in maintaining that CSR is treated seriously from across board.

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Corporate social responsibility (CSR) is a sort of global private corporate self-regulation that makes a significant contribution to philanthropic, activist, or compassionate societal aims by volunteering or ethically oriented activities. While CSR was formerly defined as an internal organisational policy or a company ethics strategy, that time has passed as several national and international laws have been adopted. Several organisations have used their influence to push it beyond individual or even business initiatives. It has long been seen as a kind of corporate self-regulation, and over the last decade or so, it has advanced from voluntary decisions there at individual level enterprises to compulsory programmes at the regional, national, and global levels. When seen at the organisational level, CSR is usually regarded as a strategic action that enhances a brand's reputation. As a result, for social responsibility efforts to be effective, they must be congruent with as well as incorporated into a company plan Some models define corporate social responsibility as

"actions that appear to serve some societal benefit, further than firm's goals and what is legally required."

Corporations may also employ CSR for tactical or ethical reasons. From a strategic viewpoint, CSR may increase business profitability, particularly if corporations actively self-report both positive and negative outcomes of their programmes. These benefits stem, in part, from creating positive public relations and sustaining ethical values in order to reduce business and legal risk by embracing responsibility for firm operations. CSR activities encourage consumers, employees, investors, communities, and other partners to have a positive impact. Some businesses will adopt CSR. Because of top company's ethical values, some companies will accept CSR processes and regulations.

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THEORIES OF CORPORATE SOCIAL RESPONSIBILITY

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THEORIES OF CORPORATE SOCIAL RESPONSIBILITY

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I.          STAKEHOLDER THEORY
As a direct challenge to the shareholder value theory, the stakeholder theory has become widely known since the 1990s (Freeman 1984), Those whose lives are impacted by a company’s decisions are called out in stakeholder theory, which states that shareholders have the right and obligation to engage in the company’s direction. A simple example: if a factory produces waste, it is responsibilities for properly disposing of the waste.

II.          CAROLL THEORY
Respects for the people, the environment, and society are the company’s top priorities. Workers and suppliers alike are handled with respect and fairness. The business does not pollute or contribute to pollution in any way. Clean, safe, and high-quality products are available from the company.

Corporate social responsibility (CSR) is a concept that focuses on how companies engage with their communities and the world at large. CSR composed of four obligations:

Making money is essential for a company’s survival and is requirement of economics at its most fundamental level. A company’s survival is in jeopardy if it does not turn a profit.

As with the prior responsibility, the legal obligation to abide by all applicable law and regulations is similarity non- controversial. They believe that legal duty should not be seen as the cornerstone of an organisation, but rather as an obligation that aids in its healthy growth and structural improvement.

Ethical responsibility is explicitly defined as adhering to the moral code, following the moral path, or doing the right thing. This is not, however, a legal obligation; rather it is something that should be done out of a sense of duty as a human being.

Enterprises have an obligation to give to society, or at least try, through their businesses, as philanthropy.

III.          THE TRIPLE BOTTOM LINE THEORY
The concept of a “triple bottom line” is a form of CSR that aims to educate executives on the economics, social, and environmental implications of their decisions. In layman’s term, economic sustainability means prioritizing long term gains over immediate ones. According to the responsibility of huge organizations to develop business plans that have lengthened the course of action. The equilibrium of worth in people's lives is what we mean when we talk about social sustainability. Environmental sustainability is the double point of new sources of energy that may replace the current sources of energy is extremely significant.

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ADVANTAGES OF CORPORATE SOCIAL RESPONSIBILITY

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ADVANTAGES OF CORPORATE SOCIAL RESPONSIBILITY

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Once a large organisation or corporation has reached a stage where it can comfortably contribute back to society, it will often launch a corporate social responsibility programme. A corporation's social duty to its community, employees, and other stakeholders is significant and tangible. The environment in which an organisation operates must be conserved not just for the benefit of the organisation, but also for the benefit of everyone engaged. Most companies use these tactics to aid in the development of the environment in their neighbourhood and maybe internationally. Smaller firms can also contribute to a company's social responsibility, although their efforts may not garner the same level of attention.

CSR programmes can be implemented by both corporate and public organisations. Corporate social responsibility has grown in importance for businesses, and the benefits it provides make it a valuable investment. It also improves the company's image. Over time, large organisations have established a standard that new enterprises strive to meet. Major firms rely on CSR programmes to enhance living conditions by addressing climate change, water use policies, and energy efficiency.

BETTER BRAND RECOGNITION

Consumers are drawn to companies with a high corporate citizenship reputation. Customers are prepared to pay a 10% premium for socially responsible items, according to study from Tilburg University in the Netherlands. Customers are more ready to spend money on products or services given by a firm that has a beneficial social impact. The corporation builds itself as a trustworthy brand by giving back to the community.

INCREASED SALES GUARANTEES PROFIT GROWTH
The attention that a firm receives as a result of being socially responsible and maybe being featured by the news attracts more clients, which in turn leads to profit development. Some clients prefer to spend more money with socially responsible businesses, so while it may appear to be a lot of money to engage in philanthropic endeavors, its finances can also profit from CSR. CSR also increases a company's accountability and transparency in the eyes of financial analysts, the media, stakeholders, and community groups. A CSR policy increases a company's profitability and value. As a result, its credibility among shareholders such as unit trusts that include CSR in company selection increases. As a result, the stock price of the firm grows and its access to investment capital improves.

INCREASED CUSTOMER LOYALTY
Customer loyalty is a key factor influencing corporate performance and profitability; thus, businesses frequently see it as a critical long-term development aim. In other words, while client loyalty appears to be imperceptible, it has significant business worth. Client loyalty is especially crucial when businesses confront external challenges such as a buyer's market, strained customer relationships, and heightened competition pressure. Once a customer recognizes their product or service and develops a psychological attachment to it, they will actively promote trusted products and engage in free word-of-mouth advertising. Customers will be more loyal to your brand if your company values correspond with their own. CSR programs help to highlight your company values and show that teamwork, community involvement, and engagement are at the top of your priority list.

BOOST PROFESSIONAL AND PERSONAL GROWTH
Culture of corporate social responsibility in a certain companies may conveniently promote volunteerism and motivate employees to join charitable activities or even organisations. Employees can boost their growth both professionally and personally as a result of corporate social responsibility. Companies that practice CSR will eventually encourage their employees to give, volunteer, and contribute to society in whatever manner they can. Employees are more likely to become generous on their own over time. Employees who are exposed to socially responsible behaviours at work are more likely to be personally engaged in such acts. Meanwhile, employees that are aware that their organisation is committed to making a difference in their local and global communities will be more inclined to be productive and creative on their own. Hence, there are examples of businesses that use CSR, and it helps for their benefit growth.

Google
The #BlackLivesMatter campaign exposed the injustices that black-founded company owners confront on a daily basis. Only 1% of black women acquire funding for their endeavors, compared to 77% of white women. Shocking numbers like these prompted industrial titans like Google to respond with CSR programs, which were hailed. Google launched startup accelerators for black-female-led firms in 2020 and invested $175 million in economic opportunities for black business owners, entrepreneurs, and job seekers. Google's commitment to racial equality has earned them favorable press coverage from outlets such as The Verge, HypeBeast, and The Washington Post. Overall, this has strengthened their corporate responsibility and employer brand profile, allowing them to attract more eligible applications in the future.

Lego
The Lego Group illustrates how to transform any company model into a purpose-driven, long-term enterprise. The company is committed to three major areas: children, the environment, and people, and they are always looking for new ways to give back to and promote the growth of these areas. Their commitment to do what is right for the planet and limit their impact to environmental change has not only positioned them at the top of the list of the world's most reputable companies, but it has also earned them significant consumer loyalty. Consumers believe they would buy from The Lego Company 57 percent of the time, which is more than 13 percent more than other top-ranking trustworthy brands.

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DISADVANTAGES OF CORPORATE SOCIAL RESPONSIBILITY

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DISADVANTAGES OF CORPORATE SOCIAL RESPONSIBILITY

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Every advantage has its own disadvantage. Thus, corporate social responsibility (CSR) also has its own disadvantages. A corporation's social responsibility distinguishes it by providing a competitive advantage. Philanthropic actions help to establish rapport, goodwill, and loyalty among members both inside and outside the organisation. However, once a firm engages in CSR, it is susceptible to scrutiny, criticism, and public opinion.

COSTS A LOT OF MONEY
Any magnitude of CSR investment might result in hefty fees and expenditures. To accommodate this fiscal modification, organisations' finances may need to be reorganised. They need funds to train employees, advertise, and partner with outside agencies to carry out tasks. A small business may utilise social media to communicate its CSR practises to clients and the local community.

However, monitoring transactions takes time and may need the hiring of more personnel, which the corporation may be unable to pay. It mostly varies on the type of CSR activity, but most need some work to ensure that everything happens as intended. The most significant disadvantage of CSR is that it may give impacts on the small businesses as it will involve big budgets or costing. While large corporations are most likely to afford to dedicate a budget to CSR reporting.

STAKEHOLDERS’ LOCKING HORNS
The cost of CSR can be prohibitive and even some may say that corporate social responsibility is a waste of time, energy and money. Management of a corporation has a fiduciary obligation to its shareholders, which CSR vehemently opposes this, as the executives' role to shareholders is to maximize profits. The financial cost of a company's CSR initiatives may fall on shareholders, consumers, or customers. Investors will want to know where their money is going and how it is being spent and what are the things that their money being spent on. Clients want to know about the initiatives, if it aligns with their goals, and if there are any conflicts of interest. Customers pay more attention to companies that make their CSR activities known. This might impact the organizations’ marketing and sales efforts.

SUBJECT TO GREATER SCRUTINY
CSR may affect the influence on public image of the organization whether in a good or bad way. When you are in the public glare, everything you do is more likely to be scrutinized. They may suffer criticism for small breaches as an organization that maintains its reputation via its operations. This might disadvantage them since it may affect their consumer base. To preserve their public image and brand, organizations must make major expenditures. Companies that invest in CSR pledge to be more accountable and responsible for their activities. If, for example, your business operations have a detrimental impact on the environment, you must do damage control and set things right. Whereas, on the one hand, your products are not actually sustainable or eco-friendly, yet your CSR activities saying otherwise where it is combating climate change and other environmental issues, you may find yourself in the limelight.

PROMOTES GREENWASHING
According to detractors, CSR is a practise that can result in inefficiency and greenwashing. Greenwashing is a term used to describe corporate acts that appear to be environmentally beneficial but may not represent a genuine change in how a company operates. For example, a product may be labelled "No additives added" even if it is manufactured in the same manner as before.  While some customers may respond positively to such remarks, others are wary of corporate greenwashing. They show that a company's managerial workforce has an inefficient commitment to its shareholders, which CSR programmes clearly contradict. They also emphasise that senior management's obligation to their investors is to enhance profitability, as are executives who prioritise substantial revenue for the culture and their job. As a result, this is the primary reason why certain entities promote such a plan but never implement it.

COMPETITIVE DISADVANTAGE
CSR efforts can be harmful to firms in the long term. As organisations implement CSR principles into their operations, manufacturing costs, as well as other ancillary costs and pressure, may rise. It has an impact on the company's stakeholders and consumers, who must bear the weight of this corporate process. Customers are less inclined to buy from such a firm when manufacturing expenses climb. As a result, incorporating CSR principles into the firm's operations may place the organisation at a disadvantage and increase pressure on it. Simply said, when CSR is incorporated into a company's operations, it may increase the costs or services provided. As a result, product prices will rise. Individuals, on the other hand, prefer to acquire items that allow them to spend less money.

Empirical research, particularly in the last decade, has shown that CSR initiatives have a quantifiable payback on enterprises and their stakeholders. The advantages of CSR significantly exceed the disadvantages. While CSR is advantageous for a company for humanitarian and ethical reasons, the very competitive business environment in which we live requires enterprises to continue to consider their own commercial goals when devoting resources to socially responsible initiatives. Firms that practice CSR help our society as a whole, in addition to the various bottom-line benefits outlined above. If you make a mistake, you risk damaging your public image, but with a concentrated effort, you can undoubtedly build trust within your community. If you execute things right, you have nothing to worry about.

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"At KFC Malaysia, we spread love by giving back to the world"

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EXAMPLES OF CSR RUN BY MALAYSIAN COMPANIES

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EXAMPLES OF CSR RUN BY MALAYSIAN COMPANIES

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Corporate Social Responsibility (CSR) can be divided into internal and external aspects. In the internal sector, CSR practices focus primarily on workers and any other concerns connected to production and resource management. In contrast, socially responsible behaviour in the external sector involves many stakeholders in the company's activity, such as shareholders, consumers, suppliers, and the government. The Bursa Malaysia CSR Framework examines four essential areas of CSR activity: the community, workplace, environment, and marketplace. In the environmental area, CSR focuses on several environmental matters, such as energy use and how the firm distributes its usage efficiently and reduces any damages that may harm the environment.

Next, for the community part, relationship between firm and community has a two-track connection. As for example, encouraging workers' engagement in communities will benefit the corporation and the community. The company have the opportunity to be innovative in its approach to helping children, youth, and those from disadvantaged backgrounds. There is a wide range of ways for businesses to connect with the local community. In the marketplace, significant stakeholders such as shareholders, suppliers, and consumers may recognize so businesses can engage responsibly with them, such as strengthening corporate governance standards to fulfil shareholder expectations.

Several companies are doing CSR in Malaysia, such as KFC Holdings (M) Bhd. KFC Holdings recognizes continuing to emphasize the significance of corporate social responsibility (CSR) to place a strong focus on doing business responsibly and ethically. They are always looking for ways to enhance their duty to their stakeholders, improving their goods and services to aiding the areas in which they operate. In ways to strengthen local communities, promote equal opportunities at work, build human resources, improve cust experiences, and make people's lives around the company better. In their Annual Report, KFC detailed their CSR actions following the four primary local areas outlined in Bursa Malaysia's CSR Frameworks.

The first aspect focuses on the community. KFC has not wavered in its dedication to extending a helping hand to those in need whenever the opportunity presents itself. KFC has lately suggested that Yayasan Amal Bistari be incorporated. These corporate foundations will allow all KFC organizations and brands to carry out their corporate social responsibility (CSR) activities, endeavours, and programmes.

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KFC's Tabung Penyayang. Established in 1997, Tabung Penyayang KFC Malaysia is an effort to fund various CSR programmes for the needy.

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Every four months, the Malaysian charity Projek Penyayang distributes KFC to those in need, including the elderly and orphans. KFC also participated in the Hunger Relief Walk for Charity and distributed relief to those in need. KFC will be allowed to sell the board game Cilik Bistari at all of its stores due to Catur Bistari's creators and marketers, Bistari's young entrepreneur Sdn Bhd (Bye), has signed a Memorandum of Agreement with the Johor Corporation. In the Harian Metro i-Futsal tournaments and the JKing Futsal Challenge Johor, KFC futsal teams competed against the strongest. In addition, KFC is a sponsor of the International Kite Festival, which takes place in Pasir Gudang, located in Johor, and Bintulu, located in Sarawak. Over 2,500 employees and 400 orphans attended the Annual Buka Puasa session which held at Ayamas Port Klang and arranged by KFC. KFC and RasaMas give the orphans who attend gift bags and meals for the programmes. Other than that, Tijarah Ramadan is a television programme that highlights companies contributing to those who are less fortunate. KFC was given the honour of sponsoring two episodes of the show.

The next area focuses on is the marketplace. KFC connects and communicates with suppliers, consumers, government, and non-government organizations and monitors how company efforts and products impact communities and the environment. Halal improvement and entrepreneurship development programmes are among the marketplace's CSR activities. KFC sponsored the event and showcased its products to participate in the World Halal Forum. By putting up a booth, KFC was able to take part in both the most extensive food and beverage expo in Malaysia and the most significant international Halal trade show in the world and tell thousands of people worldwide about their Halal certified products and services. Besides that, KFC also participates in the Halal Food Standards Realisation (Hafstar) event, held all over Malaysia to endorse Malaysian Halal Standards and standardize and converse how to handle food, process, and storage following Malaysian Standards and Shariah. The Gerak Usahawan Siswa programme has been launched to inspire university students to pursue careers in business and entrepreneurship. In mentoring programmes and instructional presentations, the company engages with Bistari Young Entrepreneur Sdn Bhd to assist growing young Malaysian entrepreneurs.

The workplace is the third area to be considered. Every day, more than 18,000 KFC workers strive to be the finest in the industry. KFC does several things to produce people that are the best in their knowledge, skills, abilities, and drive to succeed. Pedoman, KFC's yearly event to give prize their workers for their loyalty and productiveness, is already in place. All KFC restaurant managers and employees from around the nation attended the one-day event. Participating restaurants from KFC and Pizza Hut in Kuala Lumpur hosted the National Champs Challenge, which brought together the greatest of the best restaurant supervisors and employees to compete for the title of National Champion. KFC also used the Management Associated Program to find new employees to join our permanent staff. As part of its annual Hari Mekar tournament, teams from over KFC competed for the title of Champions. The champions will represent KFC in Johor's Hari Mekar Grand Finals.

Lastly, the area that will be focused on is the environment. For this reason, KFC has taken initiatives to understand better and mitigate the company's environmental effect while maintaining operational standards and shareholder value. Wastewater management is a crucial environmental concern that has been addressed and continues to be addressed. Ayamas Port Klang and Bandar Tenggara, Johor, Region Food Industries and Bakery Outlet at Kompleks KFC Glenmarie have used this wastewater management strategy. The final wastewater discharge from these KFC facilities and outlets has been treated following the DOE discharge standard. For its part, KFC has decided to adopt the suggested treatment process, which includes an Up-Flow Anaerobic Sludge Bed (UASB) and an Alternative Intermittent Cyclic Reactor (AICAR) where this is a biochemical and biotreatment continuous process that treats 250 m3 of waste a day.

Another example of a company actively carrying out CSR activities is PJ Development Holdings Bhd. In their annual report, PJHD described their CSR activities. The company is carrying out the following CSR initiatives: Gotong Royong Bukit Bintang Central, Christmas Cheer with House of Joy, Earth Day, etc. CSR efforts of PJD Group have increased every year. PJDH's efforts to become a more responsible corporate citizen have resulted in PJDH contributing more to the well-being of the communities in which we operate.

The first area that will be the focus is the community area. Events like trips and holiday cheers with orphans continue to be on the CSR agenda for each division at PJDH. At least four orphanages, including the Good Samaritans' Home, the Rumah Amal Baitul Kasih Children's Welfare Home and the Sinthamani Divine Life Ashram in Malaysia, participated in a group expedition to raise more than RM40,000. The next area that will be focused on is the workplace; the Group has arranged many Blood Donations across all of its office sites countrywide. Workers, relatives, and the general public widely attended blood donation campaigns at our headquarters, branches, factory, and hotels. Activities like these will be part of the PDH CSR's regular schedule.

The environment is the last area to be considered. The company continues to support environmental protection via its corporate social responsibility projects, such as recycling rainwater, providing garbage and recycling bins and recycling surplus concrete on our building sites, as well as promoting The Green Tree Planting Day and a local type of the United Nations Local Agenda 21 Waste Management Project in the Bukit Bintang, Kuala Lumpur area.

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To conclude, regardless of the fact that start-up companies and small firms lack the vast monetary resources that giant corporations do, their initiatives may have a huge impact, particularly on their surrounding neighbourhoods. Even a little percentage, such as 5%, may make a significant influence. When considering methods to donate and give back, start small and work your way up. Include your workers in the decision-making process when knowing and implementing a CSR activity.

Moreover, create an internal group to lead the endeavour and select companies or issues that are important to your company or to your workers. When we give to something that is meaningful to our workers, we will enhance engagement and success. Involving your staff in the decision-making process may also give our group with clarity and certainty. People will ask whether decisions are made back closed doors whether there are strings attached and if funds are going where they are supposed to go. Involve your employees or consumers in charitable donating. Make an individual feel as if they have a voice.

Furthermore, be vocal regarding your sustainable development strategies, regardless of which ones you employ. Inform your consumers about your social responsibility activities. Customers must share in the wonderful feelings that come by doing the proper thing. Many polls have shown that people would rather buy a green product than a conventional one. Revealing these advantages is a win-win situation from both a corporate and a sustainability angle. Therefore, it’s a must to practice CSR activity by all the businesses even if it's small. Practicing this will create a lot of awareness for the society especially.

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Overall, this whole group project as well as the interesting topics that we have chosen to have given us inputs on something new. We believe that through this task as a group, we are able to pull it through despite the tight schedule. By doing this we have learned about the importance of CSR activities and the impact of it to the society. As an individual when we go into the corporate this also should be a big responsibility. Therefore, this helped us know things in bigger picture. This assessment has given us a better understanding of Malaysia's corporate social responsibility.

Based on the topic that we choose, we get more information about four essential areas required by the Bursa Malaysia Framework: marketplace, community, workplace, and environment. We did conduct a lot of research, especially to find out the information about the topic. Through this task, in light of the current global crisis, I believe that every corporation should engage in CSR activities. As a result, it helps to spread the idea that the company cares about its consumers and the community as a whole. Also, we liked the idea of having all the information that we got pasted on the Padlet. This way, we can read through other 18 groups with 18 different topics and learn all of it together.

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5 benefits of corporate social responsibility with examples. Indeed Career Guide. (n.d.). Retrieved June 1, 2022, from https://uk.indeed.com/career-advice/career-development/corporate-social-responsibility

Lin, Y. (2021, August 31). 5 benefits of Corporate Social Responsibility. EnergyLink. Retrieved June 1, 2022, from https://goenergylink.com/blog/5-benefits-of-corporate-social-responsibility/

Network, N. C. S. R. (2021, October 22). Theories of CSR. LinkedIn. Retrieved June 1, 2022, from https://www.linkedin.com/pulse/theories-csr-national-csr-network

Rajalakshmi, R. (2020, March 17). Theories of CSR. Knowledge Tank. Retrieved June 1, 2022, from https://www.projectguru.in/theories-of-csr/

Top 8 benefits of CSR for businesses, stakeholders & staff. Alaya. (2022, March 10). Retrieved June 1, 2022, from https://alayagood.com/guide/corporate-social-responsibility/benefits/