CROSS-STRAITS CSR DEVELOPMENT AND COMPARATIVE ANALYSIS

4.2.1 CSR Development in Taiwan

The review of CSR in Taiwan began much earlier than that in the field of CSR at the global level. In the early 1970s, Xu (1972) wrote an article on CSR in Taiwan. Ye (1995) observed that under the traditional concept, business and morality are considered opposites because prosperity means sacrificing moral ethics. Chen (1996) analysed the types of CSR, categorising CSR into eight types, covering the entire process of production and service to the community.

Cai (2010) investigated employees’ basic awareness of CSR and its impact. Kang (2010) examined the overall perception of CSR by selecting the service industry in Taiwan. Wang et al. (2011) hold that CSR is an early warning mechanism for market investors to detect risk. The emergence of negative benchmarks highlights the comparative advantage of positive benchmarking for firms. Therefore, compared with Western research, CSR in Taiwan can at most be seen as a signal of long-term risk monitoring for investors in specific industries. These

studies show that Taiwanese society has had an early understanding of CSR. Government involvement is a common phenomenon in promoting CSR. Although CSR is crucial, external supervision is also an indispensable part of the process. The experience of CSR development in the EU, the United Kingdom, Sweden, the United States, Japan and other economies shows that the implementation of CSR is a positive driver. In recent years, Taiwan has also actively promoted and encouraged firms to fulfil their CSR through the Investment and Business Office of the Ministry of Economic Affairs, the Bureau of Industry and the Financial Supervision Council.

For the promotion of CSR in Taiwan, in addition to the hard policy rules, the government and the private sector alike have had many soft promotional activities, primarily through inter- firm competition, to facilitate the preparation of CSR reports. Government-sponsored activities, such as the evaluation program, are more comprehensive for the Executive Yuan National Sustainable Development Award corporate category, and the others are mostly handled by relevant ministries. Thus, the evaluation program is single, such as the Ministry of Health and Welfare Health Certification, Environmental Protection Agency’s Enterprise Environmental Protection Award and Ministry of Economic Affairs’ Green Model Award. The privately sponsored part, with the Vision Magazine’s CSR Award and CSR Corporate Citizen, has a high profile.

4.2.2 CSR Development in Mainland China

Although China’s exploration of CSR started late, it has rapidly accumulated many useful results. Because the principle of CSR was incorporated into the law when Corporate Law was amended in 2006, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and the Ministry of Commerce have successively issued policies (SASAC, 2008; Ministry of Commerce, 2008); local or industrial norms have sprung up and several CSR assessment-based projects have been promoted to varying degrees by local

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governments such as Zhejiang, Shanghai, Shenzhen and Changsha; Shanghai and Shenzhen securities and exchange institutions and engineering, textile, financial and electronic industries.

For example, the Pudong New Area in Shanghai issued the ‘Regional Responsible Competitiveness Index Report’ (2012), and the Shanghai Academy of Quality Management issued the ‘Core Elements and Evaluation of Social Responsibility of Labour-Intensive Enterprises’ (2012). At the same time, many domestically-funded firms—mainly state-owned enterprises—began to publish CSR reports. In 2006, the State Grid Corporation of China released the first CSR report in mainland China. After that, almost all state-owned enterprises began to publish annual CSR reports and selectively participated in special annual awards, and even the first Social Responsibility Investment (SRI) product appeared.

The reason for the speedy development of CSR in China lies in the rapid development of the mainland’s economic structure, which highly affects its domestic political, economic and social development. Whether in the case of mainland firms or foreign firms, coordination during their growth have caused many legal and political impacts. To achieve effective implementation, some responsible mainland companies have started setting up relevant CSR departments for supervision and management.

In terms of the overall corporate development atmosphere on the mainland, most companies can agree that CSR is a powerful tool for brand management in the current market. Especially in terms of corporate management transparency, more and more companies are willing to announce their implementation performance of CSR and develop CSR systems and specifications with localised characteristics. For example, in 2005, the China National Textile and Apparel Council formulated the ‘China Social Compliance 9000 for Textile & Apparel Industry’ (CSC9000T). CSR is so popular in mainland China that it extends from firms to suppliers and customers, which has really carried forward the value of CSR and made it take root in society.

The academic development and localization of the CSR concept has also been continuously promoted in mainland China. Yuan (1990) was the first Chinese scholar to put forward the concept of localized CSR. ‘Corporate responsibility is the obligation that firms must undertake to safeguard the fundamental interests of the state, society and human beings in the face of various social needs and social problems while striving for their own survival and development’.

Liu (2007) described CSR as the sole purpose of a company’s existence is to maximize not only profits or dividends for shareholders but also other social interests beyond shareholders’

interests.’ Chinese economist Ren (2005) established the social responsibility standards for Chinese firms from eight dimensions, which can be regarded as the epitome of the recent development of CSR in China: 1. integrity; 2. scientific foundation; 3. sustainable development;

4. environmental protection; 5. cultural construction; 6. charity development; 7. employee health and 8. scientific and technological research and development (Huang, 2005).

4.2.3 Similarities and Differences in CSR Approaches

A number of similarities and differences were noted with regards to the CSR practices between Taiwan and mainland China in addition to the Western influence of CSR in both sides of the Strait. As noted in Table 5.0 below, the differences between China’s and Taiwan’s approach to CSR was mentioned and discussed by three interviewees:

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Table 5.0: The Differences Between China’s and Taiwan’s approach to CSR

Source: Author

Note: Memo count denotes the separate number of interpretations the researcher made to certain parts of the respondents’ answers

The interviewees mainly pointed to a number of minimum requirements of CSR in China as compared to Taiwan. They spoke of the cultural influence in China as what set the country’s approach apart to Taiwan in terms of CSR. This includes Confucianism and Taoism.

“If you carefully sort out the context of introducing the CSR concept into China, you will find the differences… In fact, many CSR concepts discussed in China are different from those in the West. Just like the requirements for citizens, enterprises must first become law-abiding citizens, operate legally, pay taxes according to law, protect the environment, and abide by labour and employment laws. This is the minimum requirement for CSR. Specifically, the CSR discussed in China has been mixed with many shadows of Confucianism and Taoism, even though the basic structure still follows the West. On this basis, enterprises create jobs and provide products and services required by the market, which is the greatest "good" to society”

(IV1-President of WangWang).

“The other is the incorporation of China's own traditional Confucian business thought.

Now the main CSR in China is discussing some discussions related to the harmonious thought,

and the harmonious policy is a very important concept” (IV9-Chairnam of Shandong Energy Group).

According to Table 6.0 below, the similarities between China’s and Taiwan’s approach to CSR was mentioned/discussed by two interviewees:

Table 6.0: The Similarities Between China’s and Taiwan’s approach to CSR

Source: Author

Note: Memo count denotes the separate number of interpretations the researcher made to certain parts of the respondents’ answers

Only a few similarities were noted between China’s approach to CSR compared to Taiwan’s.

The similarities were widely acknowledged to the region’s rather similar cultural literacy. As the entire region calls from honesty in business and the benefiting of the entire society, this plays a big role in the CSR practices. Consider the responses below:

“Comparatively speaking, our (Taiwan) CSR concept is quite similar to China's because we have similar cultural literacy” (IV-President of WangWang).

“When it comes to the differences in CSR cognition between the two sides of the Strait, due to the different business development models and corporate culture maturity between the two sides of the Taiwan Straits, Taiwanese enterprises on both sides of the Straits recognize the value of CSR promotion. I think there are many Chinese ideas similar to the concept of CSR. In the past, traditional ideas such as honesty and benefiting the people will more or less affect the

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current definition of CSR on both sides of the Straits” (IV3-Chairman of SinoPace Holdings).

4.2.4 Western Influence of CSR Approaches in Both Sides of the Taiwan Strait

During the data analysis, it was noted that despite the Confucian and Taoism influence in both sides of the Taiwan Strait, the Western world, mainly due to globalisation, has heavily influenced the development of CSR in both sides of the Strait.

Table 7.0: Western Influence of CSR Approaches in Both Sides of the Taiwan Strait

Source: Author

Note: Memo count denotes the separate number of interpretations the researcher made to certain parts of the respondents’ answers

Table 7.0 above shows that the Western world variable was discussed by just two respondents: they attributed the influence to the overspreading of foreign standards and need to follow the West.

“Specifically, the CSR discussed in China has been mixed with many shadows of Confucianism and Taoism, even though the basic structure still follows the West… as far as my observation is concerned, both sides of the Strait accept the western concept first and supplement our own views… it is apparent that we adopt the international standard practice because the views of politics and business at the meeting agree that this can be connected and communicated… Taiwan has been very good in line with international standards because we directly accept the Western rules of the game” (IV1-President of WangWang).

“Of course, we also refer to some foreign standards. After all, the concept of CSR originated abroad” (IV7-President of HAOLIYOU FOOD CO., LIMITED).