Corporate Social Responsibility in Malaysia

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Corporate Social Responsibility in Malaysia – experts’ views & perspectives ABSTRACT The field of corporate social responsibility (CSR) has grown exponentially in the last decade and is gradually becoming a global trend. Companies are now expected to take explicitly into account all aspects of their performance, that is, not just their financial results, but also their social and environmental performance. Therefore more organisations are now engaged in serious efforts to define and integrate CSR into all aspects of their businesses. The aim of our study is to understand this trend in Malaysia and specifically to investigate (1) The status of CSR in Malaysia; (2) Different CSR practices in Malaysia; (3) Future diffusion of CSR in Malaysia. To answer these questions, we have conducted interviews with Malaysian leading experts in CSR. Our results suggests that the key issues in the journey toward wider diffusion and acceptance of CSR in Malaysia include current confusion over the meaning of CSR, prevalent use of CSR as a PR tool, mandatory versus voluntary CSR and the role the National Mirror Committee of ISO/TMB/WG SR in this process. Keywords: Corporate Social Responsibility, Malaysia, Experts, CSR practices INTRODUCTION Over the last two decades, Malaysia has been gradually improving its alignment with global management practices such as quality management and ISO 9000. A new challenge now is to encompass the core issues of Corporate Social Responsibility (CSR). CSR became a focus of many governments as well as companies globally and an inevitable part of the international trade. Welford and Frost (2006) confirm this new reality in their study of CSR in Asian supply chains. According to Welford and Frost (2006) large companies sourcing off-shore “want to do business with partner companies that also have the capacity to develop good CSR practices”. Malaysia is indeed an exportoriented country (according to the Global Trade Performance Report 2005, Malaysia is the nineteenth biggest world exporter). Therefore, it is crucial for Malaysian organisations to embrace and develop CSR practices and capabilities. 1

There are several elements of CSR that are already incorporated in Malaysian legislation, for instance Environment Quality Act (1974), Anti-corruption Act (1977) or Human Rights Commission of Malaysia Act (1999). There is also a growing number of CSR initiatives (i.e. Bursa Malaysia Framework for CSR), many companies have practiced CSR for some time and others started to embrace CSR. Coupled with the improved awareness about sustainable development and the importance of being socially responsible, CSR has gradually gained its pace. What is the present status of CSR and what can be expected in the near future? In this paper, we scrutinize CSR in Malaysia and present results of our study that investigated the status of CSR, current CSR practices and the future of CSR in Malaysia.

LITERATURE REVIEW The CSR field has seen a proliferation of studies in several areas such as definitions of CSR (Dahlsrud, 2008), analysis of CSR approaches (Garriga and Melé 2004), CSR in , supply chains (Welford and Frost, 2006; Castka and Balzarova, 2008a), standardization of CSR (Castka and Balzarova, 2008b), CSR in large organisations (Anderson and Bieniaszewska, 2005) or CSR in small businesses (Lepoutre and Heene, 2006; Castka et al, 2004). These studies confirm that the global diffusion of CSR is accelerating and the global understanding of CSR is slowly aligning and converging. This trend is also apparent in terms of our study of CSR in Malaysia: the region as well as Malaysia itself embraced CSR practices as is evidenced in the literature (Welford and Frost, 2006; Ramasamy and Ting, 2004; Rashid and Ibrahim, 2002). There are numerous CSR initiatives (see Appendix 1 & 2 for a comprehensive list of CSR initiatives in Malaysia) and many non-governmental organisations (NGO) such as Malaysia Trade Unions Congress (MTUC), the Federation...
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