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The Role Of Effective Leadership And Corporate Responsibility (Research Paper Sample)


The research paper attempts to bring clarity to the role of leadership in CSR by exploring existing literature on CSR leadership to identify leadership values and styles linked to the successful implementation of CSR. The paper also examines the mechanisms through which CSR improves organizational financial performance.


Effective Leadership and Corporate Responsibility
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Corporate social responsibility (CSR) is a growing area in the current business environment. Research evidence suggests that CSR helps a firm gain and sustain competitive advantage but leadership values, behaviors and style to implement CSR practices remain unclear. The research paper attempts to bring clarity to the role of leadership in CSR by exploring existing literature on CSR leadership to identify leadership values and styles linked to the successful implementation of CSR. The paper also examines the mechanisms through which CSR improves organizational financial performance. Literature indicates that CSR is a complex issue because achieving business sustainability requires balancing of economic, environmental and social system. CSR leadership requires leaders of extraordinary capabilities. Implementation of CSR practices requires leaders who can establish an ethical culture, think through complex problems, create stakeholders' value and motivate employees to engage in a socially responsible behavior. Firms that integrate socially and environmentally responsible activities into their business processes can differentiate themselves from competitors, build a positive reputation with all stakeholders and strengthen their competitive position which in turn increases organizational performance.
Effective Leadership and Corporate Responsibility
Today's businesses are integrating corporate social responsibility (CSR) to business strategy while focusing on the stakeholders' needs to strengthen their competitive positioning and improve financial performance. CSR is relatively a growing area of interest for scholars. Much has been done to define CSR, but it remains a controversial concept due to its complex and ambiguous nature. Leaders face challenges in integrating CSR to business strategy due to its ambiguity. However, CSR has gained popularity because it signifies responsibility of companies to both external and internal stakeholders which ensures that businesses enjoy growth in profitability while engaging in activities that promote the well-being of the community. Organizations are experiencing pressure from the stakeholders to take into consideration their impact in the wider society. Marques-Mendes & Santos (2016) note that the level of engagement in CSR activities, respect to the natural environment and all stakeholders determine the capacity of companies to generate value and long-term success. The importance of CSR in business success is no longer a question. The current debate focuses on the leadership values that support the implementation of CSR initiatives. Leadership style shapes corporate responses to the stakeholders' needs and thus it is an antecedent of CSR. Metcalf & Benn (2013) observe that studies of CSR in organizations have given little attention to the role of leaders in implementing CSR initiatives. Recently, a few studies focusing on leadership style, ethics and values associated with CSR have suggested some leadership values that can help an organization to implement CSR initiatives successfully. Groves & LaRocca (2012) point out that although literature in this area is scarce, transformation leadership styles leads to strategic CSR. Zhu, Sun & Leung (2014) argue that the implementation of CSR requires ethical leadership to ensure that leaders and their subordinate are accountable. Other studies have found that leadership styles that focus on the stakeholders' values enhance CSR (Tian, Liu & Fan, 2015; Du et al., 2013). The disparate findings suggest that there are confusion and disagreement over the type of leadership style that supports CSR implementation which may create challenges in implementing CSR. The study examines the link between leadership and CSR and attempts to identify leadership values that lead to successful implementation of CSR. The paper argues that CSR is a complex issue because organizations are independent with economic, environmental and social systems and thus implementation of sustainability requires leaders who demonstrate high ethical standards, strong stakeholder values, and ability to motivate followers to change their value systems to promote social good which in turns lead to organization performance.
Corporate Social Responsibility
CSR has a long history, and it has received scholarly attention as stakeholders increasingly require organizations to address not only financial problems but also environmental and social issues. Organizations are increasingly adopting the concept of CSR due to unintended negative environmental, social and economic consequences (Chandler, 2015). The concept of CSR emerged in the 1960s after activist groups highlighted environmental exploitation by businesses (Millar, Hind & Magala, 2012). The idea of CSR has developed as a vague construct of normative behavior. Although CSR is a term of contested meaning, scholars agree that it is any investment or activity in which a firm engages in activities that are neither required by law nor mandatory (Afiff & Anantadjaya, 2013; Chandler, 2015; Agus Harjoto & Salas, 2017). CSR strategies are actions and investments implemented by an organization to achieve sustainable competitive advantages and add value to stakeholders including the entire society. CSR emphasizes incorporation of socially responsible behaviors into company's decision making, processes and operations to enhance brand image. The integration of CSR into a business strategy is a value-driven process influenced by ideology, culture and values. The core beliefs that guide and shape organizational actions, expectations and goals play a crucial role in the implementation of CSR initiatives alongside organizational values and corporate culture.
Organizations operate in a wider system due to their interaction with social, economic and environmental systems. According to Metcalf & Benn (2013), CSR is a complex problem that requires concerted and sustained effort to achieve a balance between social, economic and ecological systems. Companies are related to multiple stakeholders with different expectations and demands. CSR strategies take into account the demands and expectations of all stakeholders. Felicio, Goncalves & da Conceicao Goncalves (2013) note that complex environmental forces compel organizations to pursue sustainability methods. Organizational leaders must help the firm to adapt to rapid changes in the business environment and new stakeholder demands. Stakeholders are interested in corporate behaviors, and they have ethical, legal and economic expectations. Companies are making efforts to implement practices that promote sustainability to create viable future due to growing concern about the long-term effects of climate change ...

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