The Concept of CSR

A clear view emerged among both government and non-government participants emphasising the opinion that the concept of CSR was not agreed upon in Saudi Arabia. Participants argued that there is a lack of clear understanding among Saudi companies of what CSR is and that it is often mixed with other practices of charity and public relations. Starting with the non-governmental groups, around half of the

private sector participants agreed that “the concept of CSR is not well defined” (PR10) and “there is a lack of understanding of CSR” (PR05). Participant PR04 argued that the concept of CSR varied widely among Saudi companies and stated

“In reality, CSR has many definitions and understanding of the concept varies from company to company. Unfortunately, CSR, for many Saudi companies, is writing a cheque to provide financial support to a particular social programme.” Several participants stated that the concept of CSR was often confused with that of charity and “charitable work” (PR02 and PR03) making a direct connection between CSR initiatives and religious practices encouraging the culture of giving. For example, it was claimed that the concept of CSR is underlined by a religious driver as argued by participant PR03:

“In my opinion, CSR -for us Saudis- is deeply rooted in Islam. The concept itself has been practiced for a long time, but perhaps what is new now is the process of managing and organising CSR activities. I believe there is a very thin line between CSR and charitable work and the two have often been mixed up in Saudi Arabia.”

Other participants were also not completely clear about CSR, describing it as “financial donations” (PR04) and voluntary charity (unlike the mandatory Zakat) as elaborated upon by participant PR08:

“Some companies treat CSR as a voluntary, charitable act despite the fact that CSR is not charity. On the contrary, I believe that charitable work is part of CSR.”

These views are perhaps not surprising given the short history of CSR in Saudi Arabia and the view of charity and culture of giving outlined in the role of religion in current CSR practice in Saudi Arabia in Chapter three. Participant PR02 assessed the situation of CSR and charity in Saudi Arabia as follows:

“For most companies, the concept of CSR has been linked to their charitable contributions (despite the fact that CSR is not the same as charity). Nowadays, there is more demand and pressure from the public as well as from government for the success of social responsibility programmes. Therefore, some companies are participating in CSR to establish their presence and enhance their role in the community. Over the past ten years or so, companies have become more aware that CSR is not only about charitable donations to the community, but a fundamental part of the work of the company as it supports its business in one way or another.”

Participants’ views revealed that the concept of CSR, in Saudi Arabia, was also often similarly confused with the concepts of public relations and marketing. For example, participants stated that CSR was often used as a “marketing tool” (PR08), “marketing and PR tool” (PR05) or to “enhance company reputation” (PR04). One participant described the concept of CSR as being “hijacked as a PR tool” (PR10). For example, participants stated that:

“In my view, there is a misunderstanding of the meaning of CSR in Saudi Arabia. Several Saudi companies consider CSR as a marketing tool for their products. In fact, the organisational structures of many companies include CSR in the marketing department.” (PR04)

“In my own opinion, Saudi companies are not clear about the meaning of CSR. Some large companies consider CSR as part of its marketing strategy and manage it through its marketing department, which limits the ability of such programmes to achieve its goals.” (PR08)

These views were consistent with those expressed by the two participants representing the Riyadhchamber of commerce, who also stated that although CSR should not be considered as acts of charity or public relations, these concepts were often confused in practice. Participant CHAM01 explained this idea by saying that “some companies still think of CSR as direct financial aid to charities without any consideration for strategies or social development” (CHAM01). The participant went on and explained his own understanding of CSR as follows:

“CSR is a mutually beneficial partnership between business and society, where companies have a duty towards society. Importantly, companies need to understand that [in this partnership] profit does not have to be quick, but a long term CSR strategy leads to profit.”

In this context, the participants linked their understanding of CSR to the concept of good corporate citizenship and the duty of businesses towards society. They stated that “good corporate citizenship applies to companies who exercise their duties

towards society in the form of contribution and help even if they make profit in the process”.

Participants representing the non-governmental organisations (NGOs) sector made similar points that there was a lack of clear understanding of CSR among Saudi companies and that the concept of CSR was not very well defined among them. One participant from this sector suggested that “most of the small and medium companies are still not clear about their CSR role” (NGO02). This statement was made in the context of the participant’s praise of the CSR efforts of a couple of very large Saudi companies, the implicit suggestion being that there was a difference in the understanding and implementation of CSR in the private sector depending on the size of the company. This group of participants expressed similar views to those expressed by the other two groups that the concept of CSR was widely confused with that of charity and PR practices. According to participant NGO02:

“Many companies still manage their CSR as part of their PR strategy. These companies need to understand that CSR is much more than improving their public image and it should be part of their strategy.”

On the other hand, Government participants expressed their own understanding of the concept of CSR in several ways. The Ministry participants stated that “CSR is the responsible practice of social, environmental and economic activities”, and “companies should not cause any damage to communities through their commercial activities” (MIN02). A broader understanding was expressed by participant MIN03 as “CSR is an ethical commitment towards society and it is broader than charity”. The SDC participants, on the other hand, appeared to have much more expectations from the private sector when stating their understanding of the concept of CSR. In doing so they stated that:

“CSR is a duty not a gift and it should not be limited to financial donations but should rather be about long term projects” (SDC01), and

“CSR is a national duty and should be part and parcel of development work” (SDC06).

Similar to views expressed above by non-government participants, both sets of government participants agreed that in the current practice of CSR in Saudi Arabia, there was a clear lack of understanding of CSR concept among Saudi companies, where it was often confused with practices of charity and public relations. For example, it was stated that “CSR activities appear to be more about PR” (MIN02). Along the same lines, participant SDC02 stated:

“The private sector confuses the concept of CSR with acts of charity or public relations. I believe that some companies are not really doing CSR and limiting their activities to sponsorships and festivals.”