Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)

Research Article: 2021 Vol: 24 Issue: 2S

A Critical Analysis of Individual Social Responsibility in China: The Role of the Government in Defining Ethical Behavior

Manman Lu, Ewha Womans University

Hannah Jun, Ewha Womans University

Xinxin Chang, Ewha Womans University

Abstract

With the rapid growth of China’s entertainment industry, many market watchers have begun to pay attention to the ethical behavior and social responsibility of influential personalities. Since the recent issuance of China’s Celebrities’ Social Responsibility Report, findings have been the focus of intense scrutiny primarily due to mismatches between public perception and findings of the report. In light of this phenomenon, this paper analyzes the extension of Corporate Social Responsibility (CSR) to Individual Social Responsibility (ISR), paying particular attention to the role of the government as facilitator and agenda-setter. Based on China’s cultural strategy and unique institutional environment, our findings suggest that the gap between the report’s findings and public expectations can be largely explained by a lack of consensus-building on what constitutes “ethical” behavior among individuals.

Introduction

The importance of Corporate Social Responsibility (CSR), or “a process to integrate social, environmental, ethical, human rights and consumer concerns into business operations and core strategy in close corporation with the stakeholders” (European Commission, 2011), has received significant attention in emerging economies such as China over the past few decades (Moon & Shen, 2010). As Chinese firms have become more active players in the global market, they have also been held to higher standards of accountability in their operations. This includes supply chain management (Luo et al., 2009), corporate impacts on environmental issues (Davis et al., 2017) and particularly with respect to the local market – philanthropic activities (Chen, 2007). Key drivers of CSR among Chinese firms include external influences such as international organizations and initiatives that aim to streamline global standards on corporate behavior regarding economic, environmental and social issues (Xu & Yang, 2008). In addition, when it comes to CSR reporting and disclosure, the Chinese government has played a crucial role in facilitating the development of detailed criteria that measure corporate social performance for firms in China. China’s CSR development followed a model that is characterized as “state-led society-driven” (Hofman et al., 2015), with governmental initiatives on promoting CSR mainly encompassing laws and regulations, as well as instructions and guidelines (Lin, 2010).

In more recent years, however, interest in social responsibility has expanded from that of corporations to individuals – particularly celebrities. Just as corporations exercise enormous influence in the economic sphere, high-profile individuals and celebrities have also been known to exert similar influence predominantly through “pull” factors (Chung & Cho, 2017). Given celebrities’ visibility and popularity, encouraging a certain standard of ethical behavior for celebrities may foster an effective trickle-down effect that could, in turn, have a positive impact on the behavior of the broader population (Horton & Wohl, 1956).

It is against this backdrop that the first Celebrities’ Social Responsibility Report was published in 2018. With no known global precedent, its introduction is both noteworthy and raises important questions about the motivations for measuring individual social responsibility. In this paper, we investigate the emergence of measurement criteria for individual social responsibility within the context of two major phenomena:

1. The extension of CSR to individual social responsibility (ISR) in the literature; and

2. The unique role of China’s government in formulating an “ideal” standard of individual behavior.

Literature Review

With regards to individuals and social responsibility, Escarti, et al. (2010) defined individual social responsibility as “an identification of oneself with others, an attitude that results in behavior that favors the common good” (388), while McKercher, et al. (2014) suggested that ISR refers to responsible actions individuals need to take, as an individual’s actions may “affect people and/or communities outside of their immediate sphere of influence” (433). Compared with these conceptualizations, Chinese scholars have taken a slightly different view, with Chen (2007) defining ISR as the responsibility, task and mission of a person to others and society. Importantly, this includes individual responsibility to one’s own country as a component ISR.

When it comes to forming ISR cognition, research indicates factors such as social value and culture. Bowes, et al. (2001) suggested that a country’s values can affect the conceptual formation of social responsibility (welfare of others) and individual responsibility (self-reliance and self- care). Specifically, countries that advocate individualistic values and monetary rewards tend to emphasize individual responsibility, while countries that advocate collectivistic values emphasize social responsibility. Furthermore, while CSR has specific performance evaluation criteria, research on ISR performance is still in its infancy. In the case of China, there is no systematic research on this area, aside from discussions on philanthropic activities. For example, Zhu, et al. (2020) studied the influence of entrepreneurs’ military experience on personal charitable donations. While findings suggest that the army is an important place for individual socialization and plays a key role in the formation of military values, thus promoting entrepreneurs to take on active personal social responsibility, the question of what ISR actually encompasses remains unanswered.

In terms of personal morality, the two most prominent perspectives have been Confucianism and Legalism. Scholars have suggested that Confucianism demands different individual moral expectations for ordinary people versus scholars (Hwang, 2012; Huang & Gove, 2012; Yang, 2020). For ordinary people, social interactions follow the rule of feminism and distributing resources obey the rule of blood relations. For scholars, scholars take care not only of the individual and family, but also greater society. Under Confucian ethics, all important resources of the group should be allocated by morally educated scholars and follow the rule of equality. As Legalism allocates “rewards and punishments to subordinates, contributions to the accomplishment of organizational goals, rather than blood relationships or group memberships,” individual interests are permitted under the premise of satisfying collective interests (Hwang, 2012).

But while both approaches have been influential in shaping the formation of social value in China, there is a need for greater consensus on what constitutes “individual social responsibility” in the Chinese context. At the same time, we have seen attempts to not only define but measure individuals (specifically celebrities) based on new conceptualizations of social responsibility – particularly by the government. As such, it is crucial to examine conceptual and methodological rigor against broader expectations for what ISR should consist of.

Methods

To understand the development of ISR that has culminated in the Celebrities’ Social Responsibility Report, this study utilizes archival research (predominantly government and industry data as well as industry guidelines) to:

1. Understand the growth of China’s cultural industry that has brought celebrities to the forefront and, consequently, constituting a core target for framing individual social responsibility; and

2. Provide a comparative analysis of corporate versus individual social responsibility definitions to understand key areas of convergence and divergence. Importantly, our analysis includes an in-depth investigation of the methodology utilized in the Celebrities’ Social Responsibility Report.

Results and Discussion

An Overview of China’s Cultural Industry

Starting from the late 1970s, China achieved about four decades of significant economic growth. With this rise in national wealth, China’s cultural industry has also developed significantly in tandem. Particularly after 2000, the development of China’s cultural industry was catapulted to the level of national strategy. In January 2006, the CPC (Communist Party of China) Central Committee and the State Council of China jointly issued a document of “several guidelines on deepening the reform of the cultural system.” The document clearly stated that the future direction of China’s cultural industry would be targeted towards marketization. Along with the liberalization process of the cultural industry, its economic value has also grown substantially. In 2011, the cultural industry’s total output value exceeded 3.9 trillion RMB, accounting for about 3% of GDP (Ye, 2012), and based on the most recent data, the market size of China’s culture and entertainment industry totaled roughly US$253 billion in 2018 (Research Report 2018). This is nearly two times the market size recorded just five years earlier in 2013.

But in addition to its potential economic value, the cultural industry and cultural products also play an important role in societal value orientation. As such, ethical behavior and social responsibility-related issues have also been receiving increased attention from the public and, notably, the Chinese government. Indeed, a growing body of research has been investigating the concept of celebrity and governs mentality in China. This includes an analysis by Lin & Zhao (2020) which argues that the notion of “celebrity” has been yielded as a one-way tool employed by those who govern, with the state playing a crucial role in Chinese celebrity politics. These points will be considered as we examine China’s unique institutional environment as it first relates to corporate social responsibility, and then its evolution to individual (or celebrity) social responsibility.

China’s Unique Institutional Environment and Defining Social Responsibility

Compared with other major economies, China has a unique institutional environment in which the government plays an important role in many aspects of society. This can be illustrated in the development of CSR in China. CSR research began relatively late in China, with the concept first introduced in the 1990s. After the start of the millennium, the emergence of negative social and environmental impacts of high-speed economic development encouraged a shift from economic development to sustainable development. According to Xu and Yang (2008), CSR in China exhibits special dimensions compared with the concept of CSR in Western economies. Except key indications of stakeholder interests, employee benefits, legal responsibility, economic

and social interests, environmental protection, charitable responsibility and operation in good faith, CSR in China does not consist of stakeholder interests and equality in western indicators, while the dimensions of business ethics and social stability and progress are unique in China’s CSR.

In addition, research has highlighted that the Chinese government is considered to be a key driver in the promotion of CSR. China’s CSR development followed a model that is characterized as “state-led society-driven” (Hofman et al. 2017), with governmental initiatives on promoting CSR including laws and regulations, as well as governmental instructions and guidelines (Lin, 2010). Zhao (2012) also finds that the Chinese government utilizes non-regulatory practices to affect corporate social behaviors for long-term relationships with firms rather than regulations as in Western nations, such as business resource control normative influences.

Presently, various guidelines are applicable for enterprises publishing CSR reports and can be classified into three basic categories:

1. Comprehensive guidelines;

2. Guidelines released by stock exchanges; and

3. Industrial guidelines.

Comprehensive guidelines include recommended standards and best practices for corporate social responsibility in China, CASS-CSR series guidelines (CASS-CSR, CASS-CSR2.0, CASS- CSR3.0) and national standards of social responsibility series guidelines (GB/T 36000-2015, GB/T 36001-2015, and GB/T 36002-2015). Guidelines released by stock exchanges are issued by the Shanghai and Shenzhen Stock Exchanges. In addition to these guidelines, there exist a plethora of industrial guidelines with the scope of application limited to one or several specific industries (see Table 1). We note that these three categories guidelines are not independent of each other and elements are linked and overlap.

At the same time, the Chinese government has also instructed public academic institutions, such as the Chinese Academy of Social Sciences (CASS), to publish CSR performance-related research findings and rankings in order to guide public opinion. For instance, since 2009, the CASS has issued annual rankings of Chinese enterprises’ CSR performance and has also been tasked with developing measurement criteria and rankings for celebrities’ individual social responsibility. According to Zhang et al. (2014), social responsibility in China has always been the administrative departments’ “ideological and political work” in practice. The Chinese government could use awareness campaigns to promote social responsibility by holding conferences and displaying slogans such as “serve the people” and “socialist spiritual civilization” (7649). The most recent slogan was “China dream,” promoted by Chairman Xi Jinping in 2013, which refers to Chinese prosperity, socialism and national glory (Zhang et al. 2014:7649). Gao (2009) argues that the concept of social responsibility is still in its early phase and individuals may not be aware of social responsibility, especially in the ethical and philanthropic levels (Ramasamy and Yeung 2009). as shows in Table 1.

Table 1
Applicable CSR Guidelines for Enterprises in China (Partial)
Name Issuing Authority Scope Launch Notes
China Corporate Social Responsibility Recommended Standard and Best Practice China Business Council for Sustainable Development (CBCSD) All industries Oct. 2006 First comprehensive CSR report guideline in China. Provides recommended standards and practices to Chinese enterprises for reference. Enterprises “strongly encouraged” to follow the standards.
Chinese CSR Report Preparation Guide 1.0 (CASS- CSR1.0) Chinese Academy of Social Sciences (CASS) All industries Dec. 2009 Basic framework for CSR report preparation.
CASS-CSR 2.0 Mar. 2011 Basic framework for CSR report preparation.
CASS-CSR 3.0 Jan. 2014 Basic framework for CSR report preparation.
National Standards of Social Responsibility General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ); Standardization Administration (SAC) All industries Jun. 2015 Series of CSR national standards consisting of guidance on social responsibility (GB/T36000- 2015), social responsibility reporting (GB/T 36001- 2015), classifying social responsibility (GB/T 36002- 2015); consistent with the concept of ISO26000.
Shenzhen Stock Exchange Social Responsibility Instructions to Listed Companies Shenzhen Stock Exchange Shanghai Listed company of Shenzhen Stock Exchange Sep. 2006 Based on the Shenzhen Stock Exchange, guidelines from 2003, 2005 and 2006 will be abolished in 2010.
Guidelines on Environmental Information Disclosure by Companies Listed
on the Shanghai Stock Exchange
May 2008 Allow for the SSE to take “necessary punishment measures” against companies for violations of the disclosure rules.
Guideline for the preparation of the report on performance of CSR Jan. 2009 Rules for the preparation of CSR reports in social, environmental, and economic sustainable development contexts.
Consistent with GRI 3.0 in
structure.
Guidelines about China’s Industrial Enterprises and Industrial Associations’ Social Responsibilities (GSRI) China Federation of Industrial Economics (CFIE) and 10 national industry associations Coal, Machinery, Steel, Petrochemical, Textile, Building Materials, Nonferrous Metals, Electric Power, Mining and other Light Industry Apr. 2008 Basic principles and overall requirements of social responsibility implementation, social responsibility system, the main elements of social responsibility, and reference for social responsibility reports.
Guide on Social Responsibility for Chinese Industrial Enterprises and Industry Associations (2.0)
(GSRI 2.0)
May 2010

Analysis and Feedback on China’s Celebrities’ Social Responsibility Report

Accompanying the rapid growth of China’s entertainment industry has been an increase in negative news surrounding celebrities. In response to this concern, Beijing Normal University (BNU), the Chinese Academy of Social Sciences, China Social Responsibility 100 Forum and the Responsibility Cloud Technology jointly issued the 2017-2018 Chinese Celebrities Social Responsibility Report. Since then, the report has been published annually and on January 15, 2021, the “2020 Chinese Celebrities Social Responsibility Report” was jointly issued by Beijing Normal University (BNU), China Social Responsibility 100 Forum and the Responsibility Cloud Research Institute. The report collected information for the top 100 most influential celebrities in China and gave rankings based on individual social performance. According to the work, criteria for analyzing celebrities’ social responsibility performance are based on three aspects:

1. Professional work,

2. Charitable work, and

3. Integrity (Hindustan Times, 2018).

Similar to the first report, the third report issued in 2020 also attracted significant public attention. But while Beijing Normal University and the Chinese Academy of Social Sciences, China Social Responsibility 100 Forum and the Responsibility Cloud Research Institute are considered authoritative institutions in Chinese academic circles, the general public took a very different view of the reports’ contents and subsequent rankings. According to a report from QQ.com, one of China’s largest search portals, the general public was critical of the rankings, especially regarding the fairness of celebrities’ social performance (Anon, 2020).

The “Chinese Celebrities Social Responsibility Report” consists of five parts, including research background, research methodology, celebrity social responsibility index, celebrity professional work index and celebrity public benefit activities index. Research targets are defined as celebrities with high activity levels and influence on the public, with the latter being measured by inclusion in at least two lists of influential individuals. These include AIMan Data Star Ranking, CBNData Celebrity Consumption Influence Index, Internet Influence of Chinese Entertainment Stars, Charity List on China Philanthropy Times and Alibaba Data Celebrity Consumption Influence List. Researchers utilized Baidu, the biggest search engine in China, as data sources and captured the data by searching celebrities’ names and keywords.

According to the Report, this indicator system (consisting of professional work, charitable work and integrity) was designed by experts in social responsibility. Scores for individual celebrities were obtained by multiplying each dimension by the corresponding coefficient, which were then weighted and added together, as follows:

ZRZS = [0.5×ZRZP+0.5×(0.3×GYZD+0.2×GYZJ+0.5×GYSJ)]×SF(0,1)×0.1HG where ZRZS is a measure of celebrities’ responsibility score.

1. ZRZP: Score of professional work. Professional work was selected based on Douban Score (an influential movie and drama evaluation system in China) above 7 points and was screened by experts according to the content of work. The work should be related to social reality, environmental issues and outstanding Chinese traditional culture and technological innovation.

2. GYZD: Score of celebrities’ institution-related behavior. It refers to non-profit foundations or personal brand public welfare projects founded by celebrities.

3. GYZJ: Score of celebrities’ annual public welfare investment. This includes welfare investment in disaster relief funds, foundation donations and charity donations.

4. GYSJ: Score of activity level of public welfare practice. This is the amount of public welfare endorsement by celebrities. In addition, protecting animals and the environment, caring for special groups, or volunteering as teachers in rural areas are included in this set of practices.

5. SF: Score of legal dimensions. If the celebrity had illicit (illegal) affairs, the score would be 0. If not, the score would be 1.

6. HG: Score of severity of violations on compliance indicators. Examples include breaking contracts, extramarital affairs, false endorsement, taking drugs or unrestrained gambling.

When examining CSR or integrative reports of listed companies within the Chinese entertainment industry (which are based on GRI 4.0 guidelines), common features in these reports include organizational profile, organizational strategy, stakeholder engagement, governance, as well as economic, environmental and social responsibilities. Reports disclose not only economic performance but also indirect economic impacts. For environmental responsibilities, reports include contributions to protect the environment, while they generally lack specific amounts of energy, water usage, waste or emissions. At a social level, firms mentioned welfare and training opportunities, as well as physical and psychological health for all employees. Key areas of focus include stakeholder engagement and community engagement, including funds for charities and volunteer teams supporting less advantaged children and those affected by disasters.

In contrast, celebrity social responsibility has focused on individual dimensions, including political, social, environmental, philanthropic, ethical and legal criteria. For instance, “responsible” works of celebrities should spread positive values or outstanding features of traditional culture. Recent social issues and the environment should be featured prominently in responsible works. Philanthropic standards involve celebrities’ own non-profit foundations or projects, donations, and participating in activities to protect animals, the environment and supporting disadvantaged groups, while legal and ethical standards consist of drug usage, gambling, tax evasion, drunk driving, domestic violence, marital infidelity and false advertising, among others.

When examining scores over time, the total average score decreased slightly from 2018 to 2019 and then increased dramatically in 2020. According to the 2018 and 2019 reports, there are only nine persons and seven persons, respectively, who received “pass” evaluations (in the assessment system, a score above 60 out of 100 suggests a “pass”). However, there are 56 persons who received scores above 60 in 2020. Furthermore, celebrities who received a score with less than 10 points accounted for 27% and 38% of all celebrities on the list in 2018 and 2019, respectively. This high percentage illustrates that as a whole, the level of celebrities’ responsibility was very low and there were few celebrities with high evaluations in work, public charity and conduct. We then saw a significant shift in 2020, with the lowest score received being 34.68. In addition, while we saw a decreasing trend in average scores from 29.90 in 2018 to 27.79 in 2019, this increased sharply to 58.87 in 2020.

Part of the reason behind this recent jump in scores may reflect points of controversy when the rankings were first released to the public. As scores were generally very low across the board, this led to questions about the veracity of the indicator system. Another point of continued debate is that celebrities would receive a “pass” or “fail” evaluation depending on the overall score -- a system that is absent in social responsibility measures for other institutions (such as corporate social responsibility). With regards to professional work, the evaluation system may not reflect the possibility that there may be limited opportunities to participate in work that focuses on social content. As some may argue that actual individual social responsibility outweighs portrayals of social responsibility on screen, it is difficult to justify that the evaluation system is accurate or even fair to those celebrities who exhibited high performance in other criteria. For instance, Chinese actor Jackie Chan ranked 42nd and 64th in 2018 and 2019, respectively, although he was among the top five for categories such as charity annual donations or public welfare projects. In 2020, he was not even featured in the report. As a result, many were surprised by the results as the latter did not match the average citizen’s understanding about individual social responsibility.

The lack of awareness may become an inhibitor of sensitivity to social responsibility and explain why social responsibility might not be taken into account when the public considers celebrities’ social responsibility (Tian et al. 2011:198). For instance, some celebrities with low scores in the reports still have millions of followers on Weibo (the most widely used social media network in China). If we assume that the evaluation system is an accurate measure of celebrity social responsibility, these conflicting points may suggest that it is possible that a large base of followers can be tolerant of celebrities’ misconduct or even illegal behavior and support them regardless of lower levels of responsibility to society at large. If this is the case, it would be important to raise public awareness of social responsibility for celebrities specifically, but also for individuals in general. At the same time, we note that mismatches in expectations may reflect a lack of consensus on what constitutes individual social responsibility. Thus while the government and related entities may be framing one “ideal” for others to emulate, this expectation gap may still remain – rendering the celebrities’ social responsibility evaluation ineffective.

Conclusion

This paper highlighted that the Chinese government has been active in shaping acceptance behavior, from corporate social responsibility to individual social responsibility. While CSR has been shaped over decades in tandem with broadly-accepted international guidelines, ISR is a relatively nascent field in which evaluation frameworks have few global precedents. The government has worked to formulate an “ideal” for individual social responsibility in conjunction with leading academic institutions with the publication of the Celebrities’ Social Responsibility Report. But while the reports’ publication does well to highlight the importance of celebrity social responsibility, dissonance between findings of the reports and public opinion suggest that more work needs to be done to enhance the rigor of reports on the one hand, and heighten awareness of public social responsibility on the other. Going forward, steps may need to be taken to bridge this expectation gap between the evaluation framework and public opinion, which may include a combination of greater disclosure and rigorous rationale for the social responsibility evaluation system, and heightening public awareness of individual social responsibility.

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