Theory Research On Internal Control For Corporate Social Responsibility

"What’s the nature of corporate social responsibility? How to provide the reasonable assurance for corporate social responsibility implementation?"These are the two core questions need to be solved. The answer of the first question can clarify that corporate social responsibility means who should be responsible to whom, what responsibility it should take and why it should be responsible for that, the answer itself can provide the theory evidence to corporate social responsibility management practices. The answer of the second question can provide the effective way to realize the corporate social responsibility.Since start, the corporate social responsibility has always been a controversial topic; the theoretical circle has not establish a concept of corporate social responsibility that is accepted widely. Due to lack of understanding about the nature of corporate social responsibility, it leads to two misinterpretations of the theory in the practice of social responsibility which are "itemization" and "generalization." These misinterpretations caused the negative effect on corporate social responsibility in practice, and "generalization" even worse. This thesis agreed with the idea of Clarkson (1991), that the concept of "social" shouldn’t be enlarged unlimitedly in terms of social responsibility; it only needs to handle the social affairs within the scope of related stakeholders. As for how to define the "related stakeholders," this thesis used the internal and external stakeholders theory (Wang Zhuquan,2006) for reference, defined the "related stakeholders" as the external stakeholders and then conclude that the nature of the corporate social responsibility is a response to the external stakeholders’interest claim.Corporates have dual goals which are the goal of enterprise value and the goal of social responsibility. Corporate Internal control should provide reasonable assurance to realize its dual goals. However, the current internal control theory and practice just emphasis on how to achieve corporate value target, but ignore the control of social responsibility goal. Therefore, it is necessary to research on the framework of related internal control.The thesis used research methods such as literature analysis, questionnaire survey, phenomenon induction, corporate interviews, case studies, etc. The context followed the outline of "Current research situation and related theories analysis-revealing the essence of social responsibility describing the theory of the internal control framework of social responsibility-implementing the internal control of social responsibility". The thesis included nine chapters and the main contents can be divided into four parts except Chapter I Introduction and Chapter IX Summary and Outlook.The first part (Chapter2) researched and analyzed on the current theories. The current study on the internal control of corporate social responsibility is lack of systematicness. Enlightened by studying the three main basic "mother" theories (corporate social responsibility theory, stakeholder theory, internal control theory), this thesis analysed the current theories objectively and revealed the shortcomings of those theories, which established the base of this thesis’s theory innovation. The second part (Chapter3) revealed the nature of corporate social responsibility. This is the first important innovation of the thesis. This part started from exploring the nature of the enterprise, and carving up the external stakeholders and internal stakeholders is the first step to understand the nature of corporate social responsibility. Then the author studied on the external stakeholder’s interest claim, and concluded that the nature of corporate social responsibility is a response to the external stakeholders interest claim.The third part (Chapter4to Chapter7) described the framework of the corporate social responsibility internal control theory. This is the second important innovation of the thesis. Chapter IV focused on how to build a framework of corporate social responsibility internal control which includes "goals, subjects levels and elements" based on the analysis of the motivation, contents, and characteristics of corporate social responsibility internal control. Chapter V to VII, respectively, revealed the "goal, elements, subjects and levels" of the corporate social responsibility internal control.Part IV (Chapter8), internal control implementation for corporate social responsibility. On the basis of analysing the implementation and management overall results of social responsibility, the thesis researched on the corporate social responsibility external environments, and the way to fulfill it. The case study of SGCC(State Grid Corporation of China) revealed the current situation of corporate social responsibility internal control and its existing problems.This thesis is innovative in three aspects:(1)Revealed the nature of corporate social responsibility. The thesis first analysed the essence of a corporate, then along with the enterprise contractual theory and the stakeholder theory and on the basis of the cognition of collective choice of a business and the division of internal and external stakeholders, the thesis demonstrated that the essence of corporate social responsibility is the response of the corporate which is constituted by internal stakeholders to the external stakeholders’interest demand;(2) Defined the internal control objectives for corporate social responsibility. Corporate goals included its value target and social responsibility target. However, the current corporate internal control theories and practice just focus on its value target, but its social responsibility goal is still without an obvious description. These caused a common ignorance of the control of the corporate social responsibility. This thesis studied on corporate dual goals, internal control dual goals, and corporate social responsibility internal control, researched deeply into the internal control of the corporate social responsibility and demonstrated the connotation of the internal control of corporate social responsibility.(3) Systematically built a framework of the internal control for corporate social responsibility, which combined with the four factors of "goal, elements, subjects and levels" together. And these four factors get the theoretical arguments respectively.