The Effectiveness of Corporate Social Responsibility and Stakeholder Management Strategies: A Case Study of Analyzing the Private Sector Management in Khyber

Abstract

Corporate social responsibility (CSR) is practiced from time immemorial but got popularity in the early 1930s. Stakeholder management is an important area of CSR having overwhelming impact on the CSR strategies and practices. The idea of an ideal world is to develop such a society in which all the stakeholders like government, non-government organizations and businesses organizations integrate coordinate and work together for the welfare of the society. This concept is gaining popularity being closely associated with benefits of the society as a whole. This concept sees the businesses as the corporate social organizations working for the welfare of the society. The research was aimed to investigate and describe the current status of CSR practices of firms and the effectiveness of stakeholder management strategies in the food, beverages and tobacco industrial sector, the biggest private industrial sector, in Khyber Pakhtunkhwa and generalize the results to all the private sector industries of the province. The areas related to understanding of the firms about CSR, Business Management’s attitude towards CSR, practical measures taken by the firms for implementation of CSR, current stakeholders’ management strategies of the firms, and the perceptions of the firms towards the actions of different stakeholders in that particular private sector were studied. The overall investigation of all these areas of CSR helped to identify the direction of the businesses in Khyber Pakhtunkhwa towards practical implementation of CSR practices in this specific area. The research problem was investigated by applying the qualitative research methodology. Interview schedule method was used for data collection from the top management of the firms through face-to-face discussion by using a pre-structured open and close ended questionnaire. All the private sector firms were the study universe, all functional industrial units of the food, beverages and tobacco sector of Khyber Pakhtunkhwa were population of the study, out of which a sample of 108 firms was selected for research using stratified random sampling technique. Key findings of the research revealed that CSR as a concept is understood and practiced by the firms but the CSR practices are not properly planned, coordinated, integrated and are done on a smaller scale by the firms, resulting in low impact on the overall development of the society. The CSR practices are mostly focused on the primary stakeholders especially on employees’ welfare. Moreover, the management of the firms has an idea of its key stakeholders but fails to differentiate between its primary and secondary stakeholders. There were no dedicated and permanent set ups, budget allocations and training programs in CSR which resulted into informal CSR practices. Finally, the perception of the management towards different actions of some of the key stakeholders was positive. It was recommended that the firms need to take more practical steps like having an independent CSR unit, separate budget allocations and trainings in CSR for the management in order to practice CSR more effectively. Moreover, the role of the government is important for coordination, registration and supervision of the CSR activities in order to avoid duplication of the resources and enable the firms to play their role more effectively in the overall development of the society.