23-09-2016, 10:14 AM
Corporate Social Responsibility Practices and
Private Commercial Banks: A Case Study on
Bangladesh
1455795473-IJSR13010203.pdf (Size: 1.13 MB / Downloads: 18)
Abstract: This paper attempts to represent the present scenario of CSR (Corporate Social Responsibility) practices in private
commercial banks of Bangladesh. It also examines the banking personnel’s perception regarding the importance of CSR. The
researchers used a structured questionnaire, which aims to collect the respondent’s opinion. For analyzing the data authors used
statistical tools like hypotheses testing (Z-test) and descriptive analysis. The study reveals that CSR is important as a tool to gain
competitive advantages and has positive impact on employees’ behavior, customers’ behavior and establishing a bank’s image but CSR
practices is not diversified rather than banks are only concerned with some specific areas of CSR.
1.Introduction
The Corporate Social Responsibility (CSR) movement has
assembled great thrust over the ancient integer of ages and
today CSR is surfacing gradually and gaining its acceptance
by businesses across the world. For being reason CSR is one
of the most conversed topics to the government, by nongovernment
and by business itself. The old proverb,
“Everybody talks about society, but nobody does anything
about it” is not valid in this century because Almona, C. P.
(2005) alleged that the role of business worldwide and
specifically in the developed economies has evolved over the
last few decades from classical ‘profit maximizing’ approach
to a social responsibly approach, where businesses are not
only responsible to its stockholders but also to all of its
stakeholders in a broader inclusive sense. One can identify
so many reasons for shifting the role of business from
classical concept to a responsible business concept, but
negative impression of stakeholders on the enterprise would
get a higher priority among others. In one hand, enterprises
create wealth and job opportunities for the society and on the
other; they pollute and destroy environment and ecology
with devastating impact on human health and biodiversity
worldwide [1]. As earlier the researchers said that CSR
practices are found in government, non-government and
business sectors. Now the banking sectors are not out of the
area of business world because it has direct or indirect
relationship to the government, non-government and
business sectors. The banking sector of Bangladesh involves
of private commercial banks, public commercial banks and
specialized banks. Where there are more than thirty private
commercial banks; dominating Bangladesh’s financial
sectors. The research has emphasized on private commercial
banks because the research topic covers CSR practices of
private commercial banks in Bangladesh. Now the banking
sectors especially private commercial banking sectors are
very competitive. To get this competitive advantage from their rival, CSR is one of the main instruments. CSR is now
considered as an integral part of today’s businesses. Sarker
M.F.H (2012) also argued that in the contemporary globally
competitive market companies must portray themselves as
socially responsible companies. In their study, they also
pointed out that; Corporate Social Responsibility (CSR) can
increase both long term profitability and sustainability of the
company as well as enhance the reputation of the
organization [2]. Islam, S., (2012) mentioned CSR helps the
banks to ensure more competitive and reduces the risk of
sudden damage of reputation, as CSR is also helpful in
building corporate reputation. Bangladesh Bank, the main
regulatory authority of banking sector of Bangladesh has
also taken some initiatives to formalize CSR in the banking
industry. But still we are lagging behind in this regard, in
compare to developed countries [3]. Private commercial
banks are now practicing CSR as their routine work and are
also performing very well. The amount that the banks are
expending in this purpose is increasing gradually. In terms of
direct monetary expenditure, engagements of banks in CSR
initiatives are increasing. This research takes challenge to
mention the CSR practices of bank especially private
commercial banks in Bangladesh. Now a day Bangladesh
Bank (Central bank of Bangladesh) is very concern toward
CSR. There are some initiatives taken by Bangladesh bank
for practicing CSR activities. Such as encourage private
commercial banks in CSR activities for this NBR issued
rules on tax rebate for CSR activities. There are challenges
to implement CSR properly in Bangladesh. (Azim A &
Islam, 2009) thought currently in Bangladesh, CSR is a
matter of self-interest for the corporate sector [4]. Ultimately
CSR practices should be better practiced in Bangladesh for
better and enhanced performance.
2.Objectives of the Study
The fundamental objective of this research paper is to focus
the CSR practices of different private commercial banks in
Bangladesh. The researchers have identified some specific
objectives to achieve this fundamental objective which are
given as follows
I. To acquire subjective perceptions about various CSR
tasks of private commercial banks in Bangladesh.
II. To find out the major areas where CSR activities are
performing by private commercial banks in
Bangladesh.
III. To compare and analyze the contribution of CSR
activities of private commercial banks in Bangladesh in
different areas.
3.Literature Review:
Ali Abbaas Albdour (2012) the early writings on CSR began
with Bowen who published “Social Responsibility of the
Business Man” in 1953 [5]. Subsequently many researchers
during the 60s have attempted to formalize or, more
accurately, state what CSR means. Simply, corporate social
responsibility means the responsibility or obligation of the
firms or organization toward the society for society’s
benefits or like something. The World Business Council for
Sustainable Development (WBCSD) (2002) defines CSR as
the commitment of the company to contribute to the
sustained economic development by working with
employees, their families, the local community, and the
entire society in order to improve life quality [6]. Adding on
to the definition from the social perspectives, Baker (2003)
maintained that CSR concerns the way companies manage
their business processes which positively affect society
aligned to the business [7]. Kok, et al.(2001: p. 287) defines
CSR as the obligation of the firm to use its resources in ways
to benefit society, through committed participation as a
member of society, taking into account the society at large,
and improving welfare of society at large independently of
direct gains of the company [8]. Wood (1991: p. 693) has
defined CSR as a business organization’s configuration of
principles of social responsibility, processes of social
responsiveness, and policies, programs, and observable
outcomes as they relate to the firm’s societal relationship [9].
The goal of CSR is to provide the environment and society
with a positive impact through the activities of the company.
As every person has his own social responsibilities towards
the society so does the business firms. Business is an
inseparable and embedded part of the society (Alam et al.
2010) here; society includes stockholders, stakeholders,
customers, investors, employees, suppliers, communities,
regulators, special interest groups etc. Now a day’s
businesses are more concerned with its social responsibility.
No doubt CSR actions are costly, but it ensures a company’s
long term sustainability, as it helps to build corporate image
[10]. CSR activities of banks are now deepened and
broadened substantially. It is a good sign for the country that
now the banking sector of Bangladesh is engaged in various
social businesses. Edi, I.I. and Etu, I.I., (2011).Now a day
CSR is a common and important topic to all business
corporations [11]. Every business organization tries to practices CSR activities. As bank is also a business or
financial organization so banks especially private
commercial banks in Bangladesh tries to maintain the CSR.
Azad et al, in their paper named “Assessment of CSR
Performances in Some Selected Commercial Banks in
Bangladesh” argued that, CSR is understood to be the way
firms integrate social, environmental and economic concerns
into their values, culture, decision making, strategy and
operations in a transparent and accountable manner and
thereby establish better practices within the firm, create
wealth and improve society [12]. Trotta et al. in a conceptual
paper; “Banking Reputation and CSR: a stakeholder value
approach” pointed out that, CSR is an important reputational
driver, able to create economic value over time. The authors
found in their study that there is relationship between CSR
and corporate reputation [13]. Similarly a World Bank
(2002) described CSR as the businesses’ obligations to
provide renewable economic development through
cooperation with employees, their families, the local
community and society in a manner that enhances their
livelihood and consequently leads to beneficial business and
development [14].
Sarkar, M.F.H. (2012) argued that, corporate social
responsibility is an inevitable matter which was adopted
globally to ensure sound development of the world [15]..
(Azim et al. 2011) said however, it is regretful that though
internationally it is being practiced widely, Bangladesh is
still lagging behind [16]. Sustainable development is not
possible without evenhanded support of corporate world.
The authors found importance of corporate social
responsibility in relation to the development of the world
.Some of the benefits which the banks seek to gain from
involvement in CSR include the opportunity to improve
reputation, effective risk management, enhanced employee
performance and retention
4.Methodology
The researchers have used both primary and secondary
sources for collecting the necessary data to conduct this
study.
4.1. Primary Data
A structured questionnaire was designed to investigate the
level of users understanding and their perception towards
CSR. The sample of the study covers the banking employees
from ten selected private commercial banks in Bangladesh.
4.2. Secondary Data
Banks’ websites, periodicals, Bangladesh Bank’s
publications, newspapers are used as the secondary sources
of the study. A list of related articles from various journals is
also used to develop the basic idea about the particular topic
and several international efforts and initiatives for
developing and implementing CSR standards and guidelines
were examined.