Corporate Social Responsibility of Commercial Bank in Bangladesh (GC02022)
Table of Contents
Chapter 1: Introduction.
Chapter 2: Literature Review.
Chapter 3: Methodology.
Chapter 4: Finding and Analyses.
Chapter 5: Discussion.
Chapter 6: Conclusion and Recommendation.
References.
Appendix 1: Research Onion.
Chapter 1: Introduction
1.0 Introduction
When it comes to successful socio-economic development, corporate social responsibility commonly known as CSR is rudimentary due t its enormous efficiency and efficacies in ensuring proper investigation of the crucial factors and aspects of commercial banking, especially for Bangladesh. It is crucial because it helps significantly in identifying and really projecting the ethical business factors which affect the economical development of a company and a nation as well as factors that directly impact on enhancing the quality of life of the workers of a company, or a society and a certain group (Branco and Rodrigues, 2017). In modern days such as now, corporate social responsibilities/CSR is widely practiced and considered fundamental in any business industry there is especially in the baking industry; CSR is hugely practiced to determine what needs to be done to better the industry according to the environmental needs.
This report is going to meticulously discuss numerous factors, practices and incorporations of CSR broadly in the banking sector of Bangladesh as well as this research is going to determine problems that may occur in conducting the research between ethical business activities and commercial banking practices. This chapter will focus on projecting the causes of the study and CSR’s impact on the study in correlation to CSR in the Bangladesh sector. This report is also going to explain the research questions and the hypotheses that are connected to the questions along with a quantitative survey study that will be provided for readers’ better comprehension, CSR model based on Carroll’s learning, stakeholders’ examination and academic issues will be projected as well.
1.1 Research Background
CSR became fundamentally famous in the corporate business world not so long ago, somewhere in the last half of the 20th century, CSR’s essentiality became known to all especially because of its way of educating people who are involved in numerous businesses (Garriga and Melé, 2014; Idemudia, 2011). It has a different way of educating people on social-economical business responsibilities which elevates social demands as well and since then, its existence in the business world has remained strong and it’s evolving as we speak. Most recently, United Nation’s organizations which are nongovernmental came up with the most recent conception of CSR(Adeyanju, 2016; Russo and Perrini, 2010).
Jenkins (2015) CSR’s involvement is stronger than ever in businesses now day which is also explained by Jenkins that, CSR became a crucial part that has to be incorporated in business and international agencies, world bank and much bigger projects because of its capacity to causing a paradigm shift which also caused the elimination of poverty and hunger, which also led to further betterment of the society by ensuring- primary education for all, gender equality and anti-discrimination, health improvement of all especially children, bettering environmental sustainability and reducing health issues in a much bigger spectrum (Achua, 2013).
Even though all business organizations are incorporating CSR in their company activities but banks are extra cautious when it comes to including CSR because banks being exposed to diverse groups of people on a regular basis especially in order to maintain a healthy and positive reputation among their own people as well as people that they serve (Awotundun, Kehinde, and Somoye, 2011). Other business companies are usually more obvious when it comes to business dealings and such but banks are much more obscure and dense especially regarding financial factors, which also make them appear somewhat flawless to others which makes it challenging for them to face any problems in general. They require the highest quality CSR activities incorporated with high-quality employees, customers’ loyalty and rock-solid investors (Achua, 2013).
When CSR was not that much popular yet, people in the banks used to manage their finances via income-generating projects which helped them examine their future revenues and this is definitely a more traditional manner of analyzing finances but when CSR came to be known and famous, the whole finance management game changed (EP, 2016). CSR being super active in the most recent years made the bankers and banking industry learn that numerous businesses and industries have an enormous impact on local communities and the quality of life in general and CSR being extremely helpful in ensuring bettering human life through proper financial management and enhancing sustainability in general (Carroll, 2014). When this came to be noticed, World Bank and bigger companies such as IFC came to consider and address this issue they realized that their projects have an enormous impact on social and environmental factors and human lives in general.
They realized that it was a necessity to properly plan and make appropriate strategies to eliminate social and economical problems and enhancing environmental betterment through better finance planning Mullins (2014). The CSR was then applied and not after long, it became a benchmark for all banks and bigger companies to incorporate CSR in their international financing activities to really determine social, environmental and economical sustainability and society’s betterment as a whole. Banking companies impact lives and social conditions by enhancing human health and social safety which is why, managing their finances through CSR became fundamental for them (Louche, 2017).
Corporate social responsibility since then is being enormously used in not only banks but also in numerous other businesses from clothing to pharmaceuticals to cars and whatnot. (Woodward et al., 1996) CSR is a concept that even smaller, medium-sized companies are incorporating into their businesses which definitely helps in ensuring proper relationship maintenance between the companies to their stakeholders. (Mullins2014,) stated that CSR is much like a self-driven model that manages the business in a much more socially accountable way and ensures that the company operations are being practiced consciously. (Louche, 2017) suggested that as a marketing tool, CSR is being heavily incorporated in order to make a company fully and abundantly known to all the people who are directly and indirectly involved in the market activities such as the customers, rival companies, and local communities and so on. CSR is widely known to be a tool that can not only enhance the marketing activities of a company but also enhance the corporate reputation of a company by making it fully efficient in pretty much all its spectrum and lines of work and especially keeping its good faith intact to all its stakeholders. CSR is also efficient in ensuring the betterment of the correspondence that takes place between social and cultural norms and factors; it also ensures helpfulness in assessing the needs of the economical betterment of society.
Notably in the banking sector, if we talk about Bangladesh’s case, the number of commercial banks are rising which is astonishing for a developing country. There are 57 commercial banks in total and there are 48 private commercial banks, there is 9 govt. owned banks as well, and it is significantly essential to acknowledge that, Bangladesh’s commercial banks are competing against each other heavily and they are developing their strategies very fast. In order to significantly gaining competitive advantages from markets and sustaining in the business world, competing with emerging companies with new ideas and innovations, CSR is fundamental and this was stated by (Mullins, 2014). A number of researchers, scholars and theorists such as (Mullins, 2014 and Sarkar, 2016) firmly believe that CSR is the way to go when it comes to ensuring competitive advantages from markets and determining long-lasting profitability for the company.
With commercial banks being established and firmly marketed, they really require heavy reputation management which is one of the biggest concerns of the commercial banks of Bangladesh and this was confirmed by (Islam, 2015), also added that reducing reputation risks and ensuring higher corporate advantage is primal focus on the commercial banks. Bangladesh Bank which is the central bank of the nation is now heavily invested in incorporating CSR activities even though CSR activities can be fluctuant from one commercial bank to another however, the implementation is increasing significantly. (Ferdous, 2015) stated that CSR has become a regular activity for commercial banks of Bangladesh. (Azim et al., 2016) stated that CSR activities even though are incorporated a lot, must be improved and should be implemented appropriately otherwise, their usefulness might be jeopardized. This is why, all kinds of commercial, private, state-owned banks must realize the benefits and capabilities of CSR activities.
Financial companies and finance based sectors work like a backbone to a nation or society and banks’ stability financially is absolutely crucial for the betterment of the society because, a society’s prosperity and its people’s financial growth depend on banks’ prosperity, their reputation and economical advancements (Dobers and Halme, 2016). For the economical development of the society, it is essential for a bank to be sustainable by using CSR activities which will definitely help in ensuring the highest quality capital management of humans, aiding in public sectors financially, aiding in civil society issues and enhancement of the governance.
CSR highly focuses on ensuring a company’s morality management, a company’s reputation and standard management, handling its business principles in a superior manner, human rights management of the course and most of all determining translucency in order to determine sustainability overall and these are crucial attributes of CSR. It is a known fact that the developing countries are behind in many sectors in comparison to the developed nations and in this case, the businesses especially bank businesses should be highly skilled and must continuously improve to meet human’s basic needs and this is explained by Amadi and Abdullah (2016).
Commercial banking sectors not just in Bangladesh but also in other nations also, really depend on CSR in order to draw in massive positive changes in the banking industry to really help develop the society in a much bigger spectrum. Developing nations such as Bangladesh even though indeed improving in many ways like a developed country has but there are poverty issues, unemployment issues, basic needs not being met issues which need an enormous concentration of the corporate social industries such as banking sectors and with the help of CSR, meeting basic human needs such as these can be indeed possible and this is said by Achua (2013). If CSR activities are properly comprehended and effectively implemented, chances are it will ensure the highest quality and quantity of improvement in developing nations such as Bangladesh and this is estimated by Adegbite and Nakajima (2011) in their researches. It has become an absolute necessity for leaders in the commercial banks of Bangladesh to desperately focus on ensuring CSR practices in their business activities to ensure the overall nation’s betterment through their banking activities so that, every single individual can benefit from CSR practices.
1.2 Research Problems
With the passing years, the world economy is being more and more developed and incorporated as we speak which is causing CSR information to be more unveiled in order to make reports regarding CSR practices within a company (Hooghiemstra, 2015). Reportedly, more than 1000 companies provide CSR reports which have caused CSR reports to be made and revealed based on numerous researches particularly made on CSR practices and this has become a routine activity since the 1980s (Jo and Kim, 2013). This research activity has a lot to thank the banking industry for the exceeding researchers taking place in order to determine social and economical sustainability which is why Bangladesh need to focus on CSR researches even more now. This is why; Bangladesh Bank which is the primal bank of the nation has implemented CSR activities to be compulsory activities to determine Bangladesh’s social sustainability (Achua, 2013). This bank has issued this rule which is to be followed by all banks within the nation to abide by mainstreaming CSR circular activities also abiding by global guidelines for it (Achua, 2013; Amaeshi et al., 2016)…………………………………………
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