A Study On Corporate Social Responsibility In European Countries And Its Enlightenment

Ever since 1990s, the corporate social responsibility (CSR) has been a growing movement across the world. The current wave of globalization has facilitated the oligopoly and cross-border trade, causing serious social and environmental issues. With the increasing social awareness and the development of social responsibility theory, the concept and the liability of a company have been reviewed. Since the resources of a company come from the stakeholders rather than shareholders, the company should take responsibility for its consumers, employers, communities and environment, while offering responsible products and services. Here comes the discordance between the maximization of shareholder's short-term profitability and the sustainable development. What is corporate social responsibility? Does social performance decrease the profitability of a company? These topics have been discussed in academic research. Till now, empirical analyses tend to argue that companies should take initiatives in making the business responsible so as to achieve sustainable development. This viewpoint has been firstly practiced in European Union countries. European government, society and companies have formed a tripartite mechanism which promotes the CSR concept and help the implementation of responsible actions. This social change has not only made a tremendous impact to the European society, but also brought great challenges to China's foreign trade. Promoting social responsibility increase Chinese companies'advantage competitiveness and contribute to build a'harmonious society', placed at the top of agenda of the 17th National Congress of Communist Party of China.In China, CSR has become a surging social discussion launched by big companies and the media. But the actual development of CSR theories and practices in Europe is rarely known. Today no comparison is possible due to a lack of comprehensive academic researches. Based on literature review and theoretical analysis, the paper advances in three steps: (1) the development of CSR in Europe (2) an empirical analysis of the relationship between social performance and profitability by sectors (3) a content analysis of CSR reports made by leading European companies. The study tends to make a CSR watch in Europe as so to give inspiration for Chinese companies.Upon a series of theoretical analysis and empirical studies, the paper comes to a conclusion that CSR does not always cause negative effects on profitability. The practice of CSR helps companies in achieving competitive advantage with a differentiation strategy. The long-term benefits can overcome the short-term costs and contribute to the sustainable development. From the current perspective, the start of CSR initiatives by European companies differs by sectors, even within the same industry. Thus the relationship between social performance and profitability must be studied in each sector. A positive impact has been observed in those companies who take early initiative. The recent publication of corporate responsibility report has improved companies'communication and social image, to a certain extent, promoted the implementation of CSR. But the responsible actions can have a positive impact only when the government and the community give strong support, and the companies take into full account their impacts on society, which require all the actors to take a joint effort.