Corporate and Social Responsibility Trends in the UAE

Introduction

Depending on the type of business and the physical location of a business, corporate social responsibility takes many names including corporate citizenship, social performance and responsible business. According to Mallin (2010, p. 258), corporate social responsibility refers to the self-regulation mechanism that businesses adopt so that they remain relevant socially especially concerning law, ethical standards and internationally accepted social norms.

Cayreyre et al. (2009, p. 61) lists four principles that mainly drive corporations and small businesses to engage in corporate social responsibility. Self-interest, social investment, increasing transparency and trust and increased public expectations of businesses are the principles that drive corporate social responsibility in the world today.

In this discussion, the focus will on the United Arab Emirates. The paper will research and examine various aspects concerning corporate social responsibility in the United Arab Emirates.

Research objectives

The overall objective of this study will be to uncover corporate and social responsibility trends in the United Arab Emirates. Precisely however, the study’s objectives will be as follows:

  • To establish a the level of corporate social responsibility practice in the United Arab Emirates
  • To establish the level of corporate social responsibility awareness in the United Arab Emirates
  • To determine the most common areas of contributing to the community that corporations in the country engage in
  • To determine if and by what extent corporations engage in initiatives aimed at protecting the environment
  • To determine the level of knowledge of the specificities of corporations involved in corporate social responsibility

Literature Review

Scholars contend that the relationship between business and society has drastically changed mainly due to globalisation and increased influence of businesses. Daft (2009, p. 138) says that most of the theory concerning corporate social responsibility is based in western culture and rarely reflects the rest of the world especially Middle East. Of more importance is the relationship or the position of corporate social responsibility and Islam.

According to Banerjee (2007, p. 147), corporate social responsibility is a complex concept that can be related to different paradigms. He adds that despite the differences there is consensus among scholars that corporate social responsibility entails observance of human rights, environmental responsibility, and effective management diversity, pursuance of sustainable policies and giving back to the community. One of the common views of corporate social responsibility is the agreement that CRS entails corporations going out of their way to exceed their legal duties by engaging in acts that promote social, economic and environmental impacts of the communities where they operate. (Daft, 2009, p. 138). Banerjee (2007, p. 150) concurs with the above assertion that corporate social responsibility includes actions that seek social good through promotion of the notion of shared responsibility to stakeholders (Mallin, 2010, p. 260).

There is conclusive evidence suggesting that corporate social responsibility initiatives do greatly improve a firm’s public image. The benefits of corporate social responsibility range beyond financial success and mainly depend on the enterprise and the business it is involved in (Cayreyre et al., 2009, p. 64)). Mallin cites human resources, risk management, brand definition and licence to operate as some of the main benefits that organizations stand to gain from effective corporate social responsibility initiatives.

Every region has its unique needs and many a times they help define the kind of CSR initiative a company will pursue. Islam is common in the Middle East region including the United Arab Emirates.Mallin says that corporate social responsibility is at the very core of Islam. In the UAE, which is a predominantly Muslim country, there are many corporate social responsibility initiatives taking place. Cayreyre et al. (2009, p. 61) say that corporate social responsibility initiatives in the Middle East especially UAE are mainly driven business and political leaders who see it as a rational choice rather than what society expects then to do. He adds that though philanthropy activities in the Middle East may be motivated by Islamic concepts such as Zekat and tsedaka, CRS initiatives are mainly driven by the business or humanitarian needs of the community.

Methodology

This study will employ the use of a questionnaire to collect data from a randomly chosen sample. The questionnaire will contain open-ended questions that will give room to participants and research assistants to explore the topic of study beyond what is written on the questionnaire. The questionnaire will be administered on a sample of 40 people with equal male and female representation. The sample will be randomly chosen from potential participants who meet the qualification standards determined before commencement of the study. Standard research ethics will be followed in the study to ensure credibility and protection of the participants. Precisely, participants will not be coerced to take part and will be free to withdraw from the study at any stage. They will also be allowed to use pseudo-names or no names at all in case they will be uncomfortable in using their real names. Additionally, research assistants will thoroughly explain the meaning of the study and their privacy will be assured.

The CSR in the UAE Context

Corporate social responsibility initiatives in the UAE context are more or less similar to that available in the larger Middle East. Many corporations and businesses are actively in different corporate social responsibility initiatives in the country. According to Daft (2009, p. 146), some sectors seem to be more active than others in terms of implementation of CSR activities. He adds that financial institutions rank lowest in the likelihood of engaging in CSR. Additionally, these organizations are believed to be the least accountable compared to corporations in other sectors. Predictably, Dubai and Abu Dhabi are the leading emirates in terms of implementation of corporate social responsibility initiatives. In the UAE, Daft (2009, p. 164) says that the desire to conserve the environment is cited as the major aim of many corporations while improving image comes second. Development and sustainability of better relationships and increasing productivity follow the first two respectively.

Some of the companies involved in corporate social responsibility initiatives in the UAE include Abu Dhabi National Oil, Dubai Holdings and Adnec.

Islam and Corporate Social Responsibility in the UAE

As said earlier, Islam has played an important role in the development and implementation of corporate social responsibilities in the United Arab Emirates. Banerjee (2007, p. 155) says that through the Sunnah, Prophet Mohammed insisted on social responsibility and justice. These are the principles that are still applied in Islamic-related corporate social responsibility initiatives. Given that general Islamic principles are universal, it is safe to generalise that the role of Islam in corporate social responsibility as described above apply to the UAE. In the Islamic world including the United Arab Emirates Banerjee (2007, p. 135) says that corporate social responsibility has been put in a cultural context. This is mainly because Islam has a big influence on the societies where it is practised.

Results and Analysis

Majority-64% agreed that profits should not become before corporate social responsibility. At the same time, opinions are evenly split at 50% on whether protecting the environment and making profits should be given equal attention by businesses in the United Arab Emirates. 78% of people strongly agree that businesses must not only focus on production of goods and services but also behave ethically. Interestingly, a minority-27% of people feel businesses should give money to charity when the money can be used in the expansion of the business. 52% of people are undecided on whether who between owners and shareholders is important in a business. 38% of people agree that there is the community and the environment should be the most important stakeholders for a business.

However, 48% disagree that giving money should be part of CSR activities for business in the UAE. There is lukewarm reception of the idea that the government should take more money in form of taxes from businesses that do not engage in CSR. 20% agree to the suggestion. Individually, many people assert that they wouldn’t be open to establishing businesses that do not take care of stakeholders such as the community and environment. 38% however disagree with the notion that businesses that do not participate in CSR make less profit that those that are involved.

Policy Implications

The above results point to a growing of importance of corporate social responsibility in UAE and an increasingly demanding public. There is also heightened awareness in the country concerning corporate social responsibility activities and the companies that undertake them. Donations to charity and care for the environment ranked as the highest CSR activities people would like to see implemented in the country. It is safe therefore to conclude that given the situation, businesses have few options but become actively engaged in corporate social responsibility.

References

Banerjee, S. (2007). Corporate social responsibility: the good, the bad and the ugly. Cambridge: Cambridge University Press.

Cayreyre, M. et al. (2009). Global Compact International Yearbook 2009. New York: Cengage Learning.

Daft, R. (2009). Management. London: Sage Publications.

Mallin, C. (2010). Corporate social responsibility: a case study approach. New York: McGraw Hill.