business SOCIAL RESPONSIBILITY

Corporate Social Responsibility



Corporate Social Responsibility

The concept of corporate social responsibility (CSR) refers to the general belief held by many that modern businesses have a responsibility to society that extends beyond the stockholders or investors in the firm. That responsibility, of course, is to make money or profits for the owners. These other societal stakeholders typically include consumers, employees, the community at large, government, and the natural environment. The CSR concept applies to organizations of all sizes, but discussions tend to focus on large organizations because they tend to be more visible and have more power. And, as many have observed, with power comes responsibility.

Arelated notion is that of business communal performance (CSP). For the most part, CSP is an extension of the concept of CSR that focuses on actual results achieved rather than the general notion of businesses' accountability or responsibility to society. Thus, CSP is a natural consequence or follow-on to CSR. In fact, it could well be argued that if CSR does not lead to CSP then it is vacuous or powerless. Interestingly, many advocates of CSR naturally assume that an assumption of responsibility will lead to results or outcomes. Thus, the distinction between the two is often a matter of semantics that is of more interest to academics than to practitioners. Most of our discussion will be focused on CSR with the general assumption that CSP is a vital and logical consequence.

Development of the CSR Concept

The concept of CSR has a long and varied history. It is possible to trace evidences of the business community's concern for society for centuries. Formal writings on CSR, or social responsibility (SR), however, are largely a product of the 20th century, especially the past 50 years. In addition, though it is possible to see footprints of CSR thought and practice throughout the world, mostly in developed countries, formal writings have been most evident in the United States, where a sizable body of literature has accumulated. In recent years, the continent of Europe has been captivated with CSR and has been strongly supporting the idea.

A significant challenge is to decide how far back in time we should go to begin discussing the concept of CSR. A good case could be made for about 50 years because so much has occurred during that time that has shaped theory, research, and practice. Using this as a general guideline, it should be noted that references to a concern for SR appeared earlier than this, and especially during the 1930s and 1940s. References from this earlier period worth noting included Chester Barnard's 1938 publication, The Functions of the Executive, J. M. Clark's Social Control of Business from 1939, and Theodore Kreps's Measurement of the Social Performance of Business from 1940, just to mention a few. From a more practical point of view, it should be noted that as far back as 1946 business executives (the literature called them businessmen in those days) were polled by Fortune magazine asking them about their social ...