| Company is the basic cell of modern economy and the main organization form of modern production. The interest distribution relationship in a company is the core of the whole interest distribution system in the society. The conflicts between the employers and employees, the unbalances between the company expansion and the social development are the main issues of modern society. These kinds of conflicts and unbalances are described as Corporate Social Responsibility (CSR) by people. In recent years, business'CSR performance becomes more important because more and more problems are coming up in terms of environment, energy, poverty, consumer rights and middle-small investor's benefits.However, the debates on CSR are hot since the CSR concept was defined by Bowen(1953). There are many arguments on many fields of CSR, such as the definition of CSR and the theory of CSR, the behaviors of CSR and the results of CSR, the obligors of CSR and the obligees of CSR etc. There does not exist one CSR theory which is widely accepted. Even though some CSR theories explained why a company should bear certain CSR well, but few theories answered the following basic issues totally and systematically. The five basic issues of a CSR theory shall be included (hereinafter refer to FIVE BASIC ISSUES):1) Why shall a company bear the social responsibility ("WHY"Issue )?2) To whom is the company's CSR obliged ("WHOM"Issue)?3) What is the boundary and limit to the CSR ("HOW MUCH"Issue)?4) How can CSR be measured ("MEASUREMENT"Issue)?5) How will CSR change ("DYNAMIC CHANGE"Issue )?A few literatures discussed one or two issues of the above Five Basic Issues, but they did not deem them as inter-linked issues of one theory. The systematic and applicable answers to these Five Basic Issues are very important so as to guide the practices.Due to the above reasons, this dissertation has focused on the improvement of the CSR theory. The target of the dissertation is to establish a CSR theory which can answer the Five Basic Issues systematically and comprehensively in order to provide a better tool to understand CSR, to provide a new view of the relationships among the people, the society and the companies and to guide the CSR practices.The dissertation is designed to answer the Five Basic Issues on the view of the company itself, that is, based on the corporate value creation process and corporate value distribution process in the company. It is also designed to solve the Five Basic Issues through quantitative description, mainly in modeling. Among these Five Basic Issues, the WHY issue is the root and the WHOM issue is the basis which will underlie the answers to the other three issues; the MEASUREMENT Issue and DYNAMIC CHANGE Issue are the important research fields which are more connected with the practice; the HOW MUCH Issue will be answered based on the conclusions from the WHY Issue, WHOM Issue and MEASUREMENT Issue. During the research of the dissertation, the economic analysis method is the key tool and other methods are involved as well.The dissertation completes the research through 7 chapters. The main work done in each chapter is as follows:Chapter One is to define the research issues and to set up the research target. In this chapter the necessity and feasibility of building up a new CSR theory is assessed and the Five Basic Issues of CSR theory are clarified. Then the roadmap of the research and the structure of the dissertation are defined.Chapter Two is to review the existing CSR theories which are based on the firm theory. One CSR theory can be classified into three categories such as Exogenous Theory, Endogenetic Theory and Exogenous And Endogenetic Mixed Theory based on its answers to the most essential issue -----why the company shall bear the social responsibility. Then 3 to 4 kinds of existing theories from each category, totally 11 kinds of CSR theories, are reviewed by focusing on the answers to the Five Basic Issues. After comparing the strong points and weak points of these CSR theories, certain implications are found and the directions of coming-up research are defined.Chapter Three is to build the framework of our CSR theory based on the company value creation and interest distribution processes. First, a new concept called Company Value Creation Body is set up based on the traditional definition of a"Firm"after reviewing the current firm theories and analyzing the operating activities and processes of a company based on the view of value creation, then an extended company theory named The Theory of Company Value Creation Body (CVCB Theory) is put forward based on the concept of Company Value Creation Body. Second, a Three Stages Model derived from the Theory of Company Value Creation Body is defined as a link from Resource Integration, Value Creation to Interest Distribution. The Three Stages Model is a strong tool to analyze a company's operating activities including the CSR activities. Based on the Three Stages Model, the nature of CSR is analyzed and the answers to WHY are discussed. Third, after giving a clear definition to CSR and differentiating it with other similar definitions, the obligees of CSR and the boundary of CSR are clarified. This chapter also suggests the content of CSR and the structure of CSR. A preliminary model of CSR based on the CVCB Theory is built at the end of the chapter. This chapter is the basis of the dissertation and has generally answered the Five Basic Questions.Chapter Four is to set up a mathematical model of CSR measurement and CSR boundary identification based on the theoretical points presented in Chapter Three. The key sectors of this chapter are used to solve the MEASUREMENT issue and the HOW MUCH issue. At the beginning of this chapter, an Invested Resource Value Estimation Model is established. Then, a Value Added Calculation Model and a CSR Measurement Model are figured out. After that, several basic axioms and theorems on company interest distribution are proposed which are derived from the conclusions in the Chapter Three. At last, a CSR Situation Identification Model is suggested. This chapter is one of the basic parts of the dissertation.Chapter Five first focuses on the DYNAMIC CHANGE issue and the execution mechanism of CSR, beside holding some discussions on the feedback of CSR actual results and the maximization of the stakeholders'interests. Then the impact of CSR structure on the realization of CSR and the impacting mechanisms of certain typical factors on CSR realization are analyzed. After these studies, the execution mechanism of CSR is discussed, especially focusing on the company governance. As a key tool among these analysis, a seller-buyer game model is used to demonstrate the impacts to the CSR from the different competitive advantages of the stakeholders such as power advantage, information advantage and organization advantage. It is also argued that the conclusions on CSR issues in a company are applicable in a value chain. At the end of the chapter, we demonstrate the applications of our theory by calculating the values of CSR variables through a fictive company story. This chapter is the most important and complicated part of the dissertation.Chapter Six is to verify the validation and feasibility of the CSR theory via empirical study. The employee is taken as the representative stakeholder of a company and typical obligee of CSR. First, 6 hypotheses are suggested based on the CSR theory introduced in the previous chapters; Second, a measurement instrument for CSR level to employee is designed; Third, the field investigation samples are described after the author investigated in Shanghai and Changsha using a combined questionnaire and got 373 valid samples; Fourth, 6 hypotheses are verified using the data from the investigation and it shows that the compulsory structure of CSR, the job position, the Equity Sensitive Index(ESI) level, the transparency and fairness of the interest distribution policy and the deriving structure of CSR have significant influences on the CSR level of one company to its employees. It is also discussed that the reason why the involvement of the company governance by the employees (such as taking a position in the Board or in the Supervisor Committee) does not have significant impacts on the CSR level is that these involvements does not substantially change the weak position of the employees in the game with the company.Chapter Seven is to summarize the main points of the dissertation. Some suggestions to the public policy and implications to the management are advanced. The future research topics are also proposed.In this dissertation, the following main points are suggested:1. About the nature of the companyIt is argued that a company is a place where the stakeholders input resources and create value together based on certain contracts, which means, a Company Value Creation Body. A Company Value Creation Body is a group or organization which includes all the stakeholders who involve the company value creation activities. Each company has its certain Company Value Creation Body and its members are the company's stakeholders. From the history of enterprise development, a company is also a historical organization of team production and interest sharing. A company's prime target is to create added value as much as possible based on the integration of resources from the different stakeholders. At the same time, it is its inherent operating activity to distribute fairly the company value which is the results of company operation and is equal to the cost of value creation plus the added value. The activities of a company is to run the cycle of operation such as resource integration—value creation—interest distribution continuously. This cycle is integrated together from one side and is also separated from another side. A company is not only a body of the resource integration and value creation, but also a body of the interest distribution. These are the main points of CVCB Theory. Based on the CVCB Theory, an analyzing tool of a company named as Three Stages Model is proposed, which divides the operation of a company into three continuous stages such as 1) Resource Integration, 2)Value Creation, 3)Interest Distribution. The Three Stages Model provides a new view of CSR and implies that CSR activity is the main activities in the stage of Interest Distribution.The CVCB Theory implies that the company not only embodies the benefit relationship but also presents the social relationship among the people. For the benefit relationship, one company shall distribute the company's interest according to the contributions of each stakeholder, which we refer to as Fair Interest Distribution Principle (FIDP). This kind of interest distribution appears as the various CSR activities in the format. FIDP includes three subsequent rules such as Equal Value Exchange Principle in selling products, Equal Value Return Principle of the value creation cost and the Proportional Distribution Principle of the added value. For the social relationship, because there are some conflicts between the equality of stakeholder's membership in the company's Value Creation Body and inequality of his actual position as a result of labor division and society position, some unfair results appear during the interest distribution process, for example, some persons exploit the others, some persons become very rich and some others become very poor. From the sides of these two relationships, more attention shall be paid to that well-dealing with the interest distribution among the stakeholders will help the solution of the social problems caused by the business, such as poverty and environment issues.The CVCB Theory also proves the possibility of maximizing the stakeholders'benefits under the FIDP. Assuming that the value of the resources invested by the stakeholders and the contribution of the stakeholders are visible and measurable, the FIDP drives the incentives of the individuals and the maximization of the total company value into the same direction, which makes it possible for one company to pursue both the maximization of the stakeholders'benefits and fairly distribution of the company interest at the same time. The CVCB Theory provides a good research perspective to analyze the CSR activities based on a company's value creation and interest distribution processes.2. About why the company shall bear CSR (WHY)It is proposed that why the company shall bear CSR is due to the nature of the company. On the one hand, because the obligee of CSR has invested certain resources in the company and has attended the activities of value creation and has taken certain risks of his investment, he has the right to get certain interest from the company just like the shareholder. The economic nature of CSR is that CSR is the appearances and formats of these kinds of interest distribution, which present in the form of various activities such as salary, bonus, payment, donations and environment protection etc. As required by the CVCB Theory, these kinds of interest distribution shall be done based on the FIDP. On the other hand, adequate performance of CSR may improve the value creation efficiency of the company's Value Creation Body, but inadequate performance of CSR will reduce the attraction of the company's Value Creation Body to the stakeholders, or cause the stakeholders to raise some defending activities (i.e. withdrawing the invested resources, stopping the value creating activities), and even let the company's Value Creation Body dismissed. Based on these two reasons, it is understood that CSR is the benefit relationship among the members of Company Value Creation Body in nature but is a social relationship surrounding the company in format. To bear CSR by a company is not only a must driven by the inherent target of the company but also a result of the pressures from the stakeholders outside the company. That is why our CSR theory is an Exogenous And Endogenetic Mixed Theory.Based on the economic nature of CSR, we define CSR as: CSR is to pay certain liabilities to the company's stakeholders including the shareholders by a company, which is the formats and appearances of interest distribution activities among the members of the company's Value Creation Body. Guided by this CSR definition, the inadequate CSR performance is due to the unfair interest distribution in the Company Value Creation Body.CSR is one of the many relationships between the company and the society. The relationships among the members of the Company Value Creation Body are more close and more important then the other relationships between the company with other members of the society. The first ones are presented as CSR and the second ones are presented as the moral responsibility deeming the company as a citizen.As company is one part of a Company Value Creation Body and the company is also organized by some members of the Company Value Creation Body, CSR shall mean some rights and obligations between one or one group of the stakeholders and another one or another group of the stakeholders, which we call the Relativity of CSR.3. About the obligees of the CSR (WHOM)It is suggested the obligees of CSR are the members of the Company Value Creation Body,which include only the stakeholders of the company, who have invested certain resources in the company and affect the company's operation or being affected by the company's operation. An obligee of CSR is the person who has the right to ask the company to take certain actions. The obligees of CSR include the shareholders, the management, the employees, the customers, the suppliers, the creditors, the communities and the governments etc. The medias, NGOs and the competitors are normally not the obligees of one company according to this rule.The scope of the obligees of CSR is not fixed absolutely but is changing relatively because the members of the Company Value Creation Body are changing dynamically in the life of the history.4. About how to measure CSR (MEASUREMENT)The measurement of CSR is divided into two parts, named as the Actual CSR Volume and the Theoretical CSR Volume. The Theoretical CSR Volume is the value volume that one stakeholder shall get from the company's total value according to FIDP; the Actual CSR Volume is the total cost of various formats of CSR activities which the company performs in order to execute CSR. In order to calculate the Theoretical CSR Volume, a Resource Value Estimation Model, a Company Product Value Estimation Model and an Added Value Calculation Model are established. In the Resource Value Estimation Model, the value estimation of resources invested by the stakeholders shall be taken into consideration of the price of the resources, the integration level of the resources, the efforts involved by stakeholder in the value creation process and the risk level taken by the stakeholder. In the Company Product Value Estimation Model, the product value estimation shall be based on the social average price of the product; In the Added Value Calculation Model, the added value shall be the result of the total company product value minus the cost of value creation. And the cost of value creation is the sum of the social average prices of all the resources consumed during the process of value creation. To calculate the Actual CSR Volume, it is proposed to identify the CSR activities from the various operation activities of a company and then to record the cost individually. In order to do this, apart from applying some good methods of accounting and asset appraisal, it is necessary to build up an accounting system for each category of stakeholders such as shareholders, employees and suppliers etc.5. About the boundary of CSR (HOW MUCH)The nature of CSR means that a company shall take certain CSR which is measured in value and shall be equal to the interest volume that the obligee of CSR shall get according to FIDP. So it is defined that to indentify the boundary of CSR is to compare the Actual CSR Volume of one stakeholder with his Theoretical CSR Volume to see if there is any gap. This comparison result is presented the performance of CSR and is named as the CSR Situation. A CSR Situation is the best when the Actual CSR Volume and the Theoretical CSR Volume are equal totally, which is called as CSR IS ENOUGH or ADEQUATE. If the Actual CSR Volume of one stakeholder is not equal to his Theoretical CSR Volume, this CSR Situation is referred as CSR IS NOT ENOUGH or INADEQUATE. Further, if the Actual CSR Volume is higher than the Theoretical CSR Volume, it is referred as OVERPEFORMANCE OF CSR; when Actual CSR Volume is lower than the Theoretical CSR Volume, it is referred as UNDERPERFORMANCE OF CSR. The best situation to a company is to reach an ADEQUATE situation to all stakeholders, not to OVERPERFORM to some stakeholders and UDNERPERFORM to the other stakeholders. The CSR Situation of one stakeholder can be better identified when he compares what benefits he gets in the company with other stakeholders in the same company or the stakeholders in other similar companies. From the answers to the HOW MUCH Issue it is known that all companies shall execute CSR and also have the capability to execute CSR well no matter how much size it is, what the finance performance is, where it is allocated and in which stage it is developing. The Actual CSR Situation of a company is mainly decided by the owners and the management.6. About the dynamic change of CSR (DYNAMIC CHANGE)It is suggested that the CSR volume change of one stakeholder is coming from 3 aspects: The first is the capability of value creation by the company's Value Creation Body which decides the total volume of interest to be distributed; The second is the fairness of the company's interest distribution policy which decides the Theoretical CSR Volume; The third is the competitive advantage of the stakeholder which decides the adjustment of the Theoretical CSR Volume and finally decides the Actual CSR Volume. Just because of the above three impacts, the CSR volume of one stakeholder obliged by the company is dynamically changing. To an existing company, as the capability of value creation and the interest distribution policy are relatively stable, the competitive power situation will be the most frequent and most important factor to affect the actual CSR Situation.Using a game model, it is verified that when the competitive advantages of one stakeholder, which are detailed in power advantage, information advantage and organization advantage, are more stronger than his counterpart (mainly the shareholder, the management or the whole company), the Actual CSR Volume the stakeholder gets will be more and the possibility of getting ADEQUATE CSR volume will be higher. If the power of one stakeholder exceeds certain limits, he will turn to be an obligor of CSR instead of an obligee of CSR. In order to win ENOUGH CSR volume, a stakeholder needs to keep enough power to balance the power held by his counterpart.It is analyzed that some factors such as the company governance structure, the ownership structure, the company culture, laws and regulations, the NGO activities are changing the balance of power among the stakeholders, and some factors such as the economy developing level of the country, the characteristics of the business line, the finance performance of the company and the production volume of the company are adjusting the total interest volume to be distributed in the company. All these factors make the CSR dynamically changing. For example, when the power advantage, information advantage and organization advantage of the company to a stakeholder is fixed, the finance performance of the company is not affect the gap volume between the stakeholder's Actual CSR and Theoretical CSR Volume, but it will affect the CSR gap ratio of the stakeholder which will impact the CSR level felt by the stakeholder.7. About the execution mechanism of CSRIt is argued that the execution mechanism of CSR is to assure the execution of FIDP in a company. That is, when the total interest volume of a company is fixed, the execution mechanism of CSR is to make the powers held by different stakeholders to reach a balance. Then it is suggested that six parts of the execution mechanism of CSR shall be considered such as: 1) the mechanism of resource integration and value creation, 2) the interest distribution mechanism, 3) the company governance mechanism, 4) political mechanism, 5) social mechanism and 6) market mechanism. Among these, the first 3 mechanisms involve micro level and are inside the company and the second 3 mechanisms involve marcro level and are outside the company. According to the analysis of CSR dynamic change, it is known that to keep the balance among the stakeholders during the interest distribution is a main tool to assure the ADEQUATE performance of CSR. In the interest distribution mechanism, the CSR structure selected by one stakeholder can improve the CSR level to the stakeholder; in the company governance mechanism, the involvement by one stakeholder in the company governance structure and decision-making process is an important tool to guarantee the Actual CSR Volume of the stakeholder.Because the executors of the company's interest distribution, mainly the shareholders or the management, who are deciding how the cake of the company value to be shared, often have more advantages on the power, information and organization aspects, the responsibilities of them to the others are the most important part and the key part of CSR. That means, the competition to win the decision-making position and how to supervise the decision makers are the key issues during the execution of CSR.For the management of one company, it is their important duty to assure the execution of CSR via balancing the advantages among the stakeholders in order to keep the efficiency and stability of the Company Value Creation Body and to maximize their own interest. For the government, to balance the fighting advantages of different stakeholders during the company interest distribution game is also a main tool for them to keep a high level of CSR execution in the society, as they are the agents of the publics and the weak groups and also are the main supervisor of fair interest distribution in the society. In order to guarantee the bottom line of CSR level executed by the companies, the government is used to define certain actions through setting up some laws, introducing some incentives, steering public voices and so on. The innovative works done in the research mainly include the following aspects:1. An improved company analysis framework, the Three-Stages Model, is proposed.The dissertation develops the traditional concept of firm into a concept of Company Value Creation Body which includes the traditional firm as a core. The concept of Company Value Creation Body implies some new views of company activities such as value creation, CSR, competing etc. The Theory of Company Value Creation Body provides some new insights of business analysis and business management from the micro level. The Three-Stages Model derived from the Theory of Company Value Creation Body provides an analyzing framework not only for the CSR activities but also for other company activities.2. A new systematic CSR theory is established.First, the dissertation proposes a new CSR theory after systematically answering the Five Basic Issues based on the Three-Stages Model. The dissertation argues that the nature of CSR is the formats of varied interest distribution activities among the stakeholders of a company and the CSR activities are the necessary and important part of one company's daily operations, which abstracts the nature of CSR clearly from the various and complicated CSR activities of the company and lays the foundations for solving the Five Basic Issues of CSR. This provides another new answer on the essential question of CSR why a company shall bear CSR to certain parties.Second, the dissertation points out that the obligees of CSR are the members of Company Value Creation Body, that is the stakeholders of the company. It is implied that the scope of the obligees of CSR is dynamically changing. This provides a good answer to the question that whom the company's CSR shall belong to.Third, a measurement system of CSR is proposed, in which the measurement of CSR is divided into two parts, that is, Actual CSR Volume and Theoretical CSR Volume, and the measurement models of them is demonstrated separately. This answers the third basic question on how to measure the CSR volume performed by the company.Fourth, the dissertation suggests that the boundary of CSR means that a company shall distribute the company interest exacttly according to the contribution of each stakeholder during the company value creation process. Then an indentification model of CSR Situation is proposed. All these solve the fourth basic question how much a company shall bear CSR.Fifth, the dissertation establishes an analysis framework of CSR dynamic change, which answers the fifth basic question how a company's CSR is changing with the environment and the change of itself. It is pointed out that the competitive advantages of the stakeholders are most often and most significantly affecting the CSR performances. This helps us to rethink the gap of CSR level among the stakeholders in a company and also among the different companies. It also implies some directions to explore a good system of CSR execution.In one word, the dissertation proposes a general feasible and valid framework of CSR theory based on the company's value creation and interest distribution processes. This paves the ways for the further research.Also, there are some weak points in this study as the dissertation only analyzes the CSR issues on the view of the company value creation and interest distribution. In order to improve the CSR theory, certain further researches are necessary. |
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