Leadership Consciousness to CSR: Royal Industrial Trading Co.

Leadership Consciousness to CSR: Royal Industrial Trading Co.

Suhail Sultan (Birzeit University, Palestine) and Imad Rjoub (Royal Industrial Trading Co., Palestine)
DOI: 10.4018/978-1-5225-3909-4.ch053
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Abstract

The purpose of this case study is to discuss the leadership role in Corporate Social Responsibility (CSR) and thus on the company's competitiveness, performance, and reputation. The case highlights the adoption of CSR as a long-term strategy in a manufacturing family business located within a highly volatile country in the Arab world where awareness of CSR is not prevailing. By interviewing the owners and senior managers of Royal Industrial Trading Company, one is able to understand how they view their social responsibilities and how they insert CSR into the company's strategy. Royal has a number of corporate social responsibility policy aims but its current disclosures do not provide a sufficient level of detail to adequately assess the social impact of their activities or link their activities to the achievement of specific stated social aims. The company is enjoying the rewards of improved competitive position, the benefit to their shareholders, and the benefit to the society at large.
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Setting The Stage

Before 2010, Royal was providing financial assistance to individuals and non-governmental organizations based on the need of these parties and the financial status of Royal (i.e. out of obligation and responsiveness to rising needs). In 2010, Royal decided to change its policy by allocating a budget at the beginning of the year to fulfill the activities Royal is planning to fund. The Fund was based on the company’s understanding that it does not operate in a social bubble, but rather plays a significant role in the Palestinian community, and thus developed its unique mission in order to give back to the society in which it operates.

Royal’s direction since launching CSR is based on a strategic vision that provides the community with human, social, cultural and health services. That strategic vision is a reflection of the company’s commitment to implement its human and developmental role. Royal also aims to give back to the community via all its activities, events and programs in order to contribute to mobilizing the wheel of socio-economic development in Palestine.

Those who adopt the neo-classical view of the firm would believe that the only social responsibilities to be adopted by business are the provision of employment and payment of taxes. This view is most famously taken to the extremes of maximizing shareholder value and reflected in the views of Friedman (1962). An alternative view of the firm following the behavioral theorists (Cyert and March, 1963) might view corporate social activity from a standpoint that examines the political aspects and non-economic influences on managerial behavior.

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