Corporate social responsibility, stakeholder trust and organizational outcomes

Growing numbers of firms are engaging with Corporate Social Responsibility (CSR), that is, they are extending their decision-making beyond short-term maximization of profits to address the social and environmental costs of doing business. Human rights violations, environmental pollution, misinformation of customers, financial scandals and other irresponsible firm behavior have put CSR high on the public agenda and led to criticism of firm practices (Bartley & Child, 2014). A recent defining moment was the Rana Plaza accident in April 2013, when more than 1,100 garment workers died in the collapse of a factory building near Dhaka in Bangladesh. Factory owners ignored safety warnings after cracks appeared the day before the accident and ordered garment workers to return the following day. The building then collapsed during the morning rush hour. The factories in the building produced apparel for such Western brands as Benetton, Bonmarché, El Corte Inglés, Mango, Primark, and Walmart, which had outsourced manufacturing to Bangladesh, the country with the lowest wages in the world (Young & Makhija, 2014).