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Purpose: Main aim of the research study is to analyse the impact of CSR on the construction industry of UK and Kuwait. The main question of the research study is to analyse the impact (extrinsic or intrinsic) on the construction firms of UK and Kuwait.
Design methodology: Research method used in the research study is “quantitative research” where the tool of the survey questionnaire is used. The researcher used Closed-ended survey questionnaire throughout the research study. A total sample size of 232 respondents is taken by the researcher were 132 respondents came from Kuwait and 100 respondents came from the UK.
Findings: Findings of the present research study concluded that CSR is an effective form enhancing the brand image, reputation and employee motivation in construction companies. CSR is not only associated with an intrinsic side of benefits for the firm but it is also linked with the extrinsic side benefits of the firm.
Recommendations: Future recommendations are provided by the researcher in the chapter of conclusion. Recommendations are provided in the form of improving the present CSR situation of construction companies. Investing in philanthropic activities, an introduction of sustainable leadership programs and reducing the level of barriers are some important recommendations provided in the research study.
Table of contents
The term Corporate Social responsibility (CSR) can also be referred to various other names; such as corporate accountability, corporate responsibility, work ethics, responsible entrepreneurship, and also corporate citizenship amongst many others (Garriga and Mele, 2004). The issues concerning CSR have recently gained much attention since its integration is most needed in contemporary business practices. This is due to the increasing trend that relates to corporate sustainability and responsible competitiveness. As noted in the studies of Carroll (2004) and Margolis and Walsh (2003), it has become a primary concern for all businesses that are performing activities in modern times. There are a number of different companies and organisation that work for the establishment and support of implementing programs that solely focus of social and environmental welfare, such as Nestle, IBM, Cisco, etc. (Ragan et al, 2012). They tend to collaborate with different like-minded agencies, such as non-governmental organisations (NGOs) in order to establish ethical codes in business. This also includes the ethics of work partnership and the code of conduct of people associated with the business as well. Apart from this, these companies also collaborate with different federations internationally that enable them to build their own CSR networks, such as CSR Europe and Business for Social Responsibility. The purpose of such activities is to contribute a maximum level of efforts in positioning values and also to incorporate ethical considerations into the business model as well as in the culture of the organisation (Cohen 2010). Moreover, these are the steps that lead the organisation to fully acknowledge their obligations towards society.
However, the term CSR itself is a concept that is still evolving and cannot be referred with a definite statement that is accepted universally. In general, it has been observed that CSR involves a firm or a business; and the way it incorporates economic, social and environmental concerns with the strategies, culture, values, operations and decisions of the company. This entire process has to be done with the most accountable procedure and transparency. Since the issues that are related to sustainable development have recently gained much importance, the way a company deals with them can now be linked to the CSR activities of that company (Zadek 2006). In addition to this, it has been observed that CSR activities have experienced a rise in prominence in the last two decades. The practices and reporting of CSR have also been upscaled across all industrial sectors in the world. The significant change in pace in most of the industries have shown and proved the importance of CSR practices implication. However, there are certain companies that have set their level of CSR activities as a comparatively low priority and do not tend to have a rapid adaptation (Matten and Moon, 2008).
The exploratory research of Corporate Social Responsibility started earlier in the 1950s, while the basic competencies were laid out in 1970s. The studies performed earlier provided the basis of the concept, which further focuses on the integration of these activities into business practices (Harrington, 2014). The core objective of this concept establishment came into existence in the 90s with CSR being the moral and ethical justification of the industry (Garriga and Mele, 2004). With reference to the study of Carroll (1999), the basis of CSR revolves around the necessity and obligations of business stakeholders towards the community they work in and towards their customers. Martinuzzi et al (2011) added the aspect of competitive advantage; while Rowley (1997) explained it as the urge to cope pressure that is put forward by the external stakeholders. Doane (2005) relates this to the reputable image building process.
One of the greatest advantages of implementing CSR activities that favours the company is that it helps build a better image. It leads to an approach that refers to the concept of maintaining goodwill with consumers of the brand that the company offers. Other such activities also result in the enhancement of business quality and the company’s growth (Zadek 2006). In terms of finance, the practices concerning CSR revolve around profit growth, cost management, cost reduction and productive growth. In addition to this, there are certain aspects that also relate to the betterment of managing risk; and also to the better recruitment process while maintaining the staff quality as high. All of these factors, one way or the other, play a vital role in providing a company with a competitive edge. (Thorpe et al. 2003)
However, it has been noted that evaluating the positive outcomes of voluntary CSR practices is not an easy task (Morimoto et al., 2005). This is due to the intangible benefits that are received by the management of the company in form of improved goodwill, motivated employees, enhanced brand image, etc. Amongst different sectors, the organisations in the construction industry, the necessity of incorporating CSR activities and practices is high because of the extensive and intensive impact of constructional activities on the environment (Glass & Simmonds 2007). As the report provided by Cartlidge (2011), the construction industry is accountable for more than 30% of the waste generated in the UK; while more than 40% of problems concerning, carbon is associated with construction all over the world. Different studies, corporate behaviour and surveys, such as Matten and Moon (2008), indicate the strong association and deeper understanding of social responsibility and good business. Not only this, but the existing financial markets and investors consider CSR activities as the most vital for better performance, good management and in building favourable business strategy (Peloza, 2006). Additionally, maintaining goodwill and trust of consumers and the community provides the company with an edge to address and gain more consumers as well as employees. This can also facilitate the company in building value for the brand and in the eyes of shareholders by acting more responsible for their workers.
There have been numerous studies, such as Ding (2008) that has focused on the issues concerning sustainable construction as well as the sustainability. Moreover, the overall impact on the environment that has been caused in the past requires attention for treatment. The consequences of linkage among construction activities and environment; there are certain outcomes, such as community protest which has become subject of interest for many researchers (Teo, 2009). In their study, Teo and Loosmore (2012) have also suggested that most of these constructs are often controversial. Not only this, but there are many other studies that have addressed the corporate social responsibility in regards with the construction industry, such as Barthope (2010), Sonja (2008), Martinuzzi et al. (2011), O’Connor & Spangenberg (2007) and Arslan & Kivrak (2008) amongst many others. In addition to this, many researchers have also focused on the emergence of CSR implications in the construction industry within UK (Jenkins 2006, Gray et al. 1995), and also in across other developing countries. This is because the construction industry causes the most environmental pollution, thus, is more obliged to work for treating their damages. As well as, it is also responsible for the overuse of rare and important resources (Jones et al, 2006).
Since the development of The Middle East is rapidly progressing with the of passing time, the improvement in tourism and related activities have also experienced a rise. This further gives an increase in demand for encompassing innovative constructional projects, developments and infrastructure of different types. Such projects range from residential to commercial and offices. According to different studies; the Gulf Cooperation Council (GCC) solely accommodated construction projects that valued about US$1.67 trillion in 2013 (Issa et al 2015). UAE and Saudi Arabia were accountable for over 68% of the said value. This was not only a great opportunity for companies to generate profit but also proved to be a responsibility. It caused The Middle East to strive for more sustainable systems, and to eliminate the obstacles that are in its way that is caused by social, technical, political and economic factors (Issa et al 2015). The study of Griffiths and Bhutto (2008) has provided an extensive review of environmental friendliness in the UK. Their study suggested that in order to maintain a competitive edge over others, companies must address the environmental issues caused by their construction projects. Chan (2004) has considered the aspect of the external environment as one of the most critical factors that contribute to the success of a construction firm. He also suggested different factors of environment that some way or the other play a vital role in its success, which is economic, physical, social and industrial relations. The study of Zhao et al (2012) studied the critical success factors of CSR on a broader perspective in terms of the construction industry. It included results based on 30 performance indicators that concerned 11 stakeholders. These stakeholders belonged to an external and internal group of stakeholders who mainly dealt with issues concerning the environment, health, safety and economic…