Essay: Corporate Social Responsibility
Over the last two decades, the relationship between governments and corporations has changed significantly and the possibilities for multinational businesses to influence and co-design political decisions have been growing immensely. Due to increasing globalisation and growing interdependence of nations, civil societies are concerned with the growing power of multinationally operating corporations and the call for a decent regulatory framework is getting louder. In this context, the concept of Corporate Social Responsibility has emerged as a response to new challenges in the transforming triangle between government, civil society and business.
This essay will provide a brief overview on the historical background of Corporate Social Responsibility and a perspective on the possible definitions of the term. Subsequently, the most popular models of CSR and the business case will be explained to provide a basis for discussing the limits and potentials of CSR in the process of promoting sustainable development.
Corporate Social Responsibility as an academic discipline emerged in the United States of America in the 1950s inspired by Howard R. Bowen's Essay “Social Responsibilities of the Business Man” in which he stated that, since corporations are benefiting from the society they operate in, they have to orientate their responsibilities according to the needs of that society. Starting in the 1970s, the academic debate was enriched by the perspective that entrepreneurs should be seen as actors capable of actively designing their voluntary commitment and dedication of CSR actions instead of simply responding to society’s expectations. Simultaneously, an environmental approach was developed in the late 1970s and 1980 building the foundation for the concept of sustainable development. Ever since the 1990s, the ideas of CSR and sustainability/protection of the environment have been melting together leading to an integrated understanding of Corporate Social Responsibility. The concept of CSR was born.
As for the definition of CSR, the academic and the business world have not yet agreed on a general version but are increasingly involved in developing and discussing the term. Two of the most significant definitions though might be the following ones: The one published by the European Commission in October 2011 stating that to fully meet their social responsibility, enterprises “should have in place a process to integrate social, environmental, ethical and human rights concerns into their business operations and core strategy in close collaboration with their stakeholders” (European Commission 2011) and the one by the World Business Council for Sustainable Development, which says “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (WBCSD 2011). Many academics agree that, in order to be able to call a business strategy a CSR strategy, it is vital that the corporation brings social and environment issues not only on the agenda but actually into the core of the business to achieve the goal of the CSR process: Sustainable Development. Some academics strongly support the thesis that Corporate Social Responsibility ought not to be confused with charity or philanthropy for they are merely choices of action a corporation takes on top of every day business . CSR, on the other hand, should be about designing the entire production cycle of a company in a way that responds to the needs of the stakeholders, so to say everyone who affects or is affected by the business's actions (Tiscorna Biaus 2012). Examples for possible stakeholders are the community, the suppliers, the clients, the shareholders, the government, the employees and the environment. Therefore, involvement in (for example) community life according to CSR should be acted upon with the serious attempt to reflect and solve social difficulties and problems caused by the corporation.
Since most of the international standards concerned with CSR issues are implemented on a voluntary basis, CSR remains a form of corporate self-regulation implementing sustainable and responsible business. It aims at improving the quality of life, not only of the employees of the business or professionals who are in direct contact with the corporation but (in an ideal situation) of society as a whole on a voluntary basis. The most popular voluntary CSR standard is the ISO 26000 (published by the International Standardisation Organisation in November 2010) which aims at assisting organizations in their self-regulatory efforts by providing guidelines and orientation for businesses who wish to align their strategies with the goal of sustainable development.
In order to provide a basis for the following discussion of the limits and potentials of CSR, I will now give an overview of the popular models of CSR and the business case.
In the academic debate, three models of CSR have become vital to the core of the subject: Carroll´s pyramid of CSR, the two dimensions of CSR according to Quazi and O`Brien and the three dimensions of CSR as they were defined by Carroll and Schwartz. First of all, according to Archie B. Carroll, Corporate Social Responsibility of entrepreneurs can be distinguished in four categories: Economic responsibility (working and producing in a cost-covering/cost-effective way), legal responsibility (working and producing according to the law and legal standards), ethical responsibility (acting ethically and fair beyond the legal framework) and philanthropic responsibility (creative commitment/engagement in society beyond society’s expectations). The first two categories are necessary for a corporation to sustain itself, the third category is required to be socially accepted and the forth category is purely voluntary but desired by society. CSR basically covers all four categories (Carroll 1999).
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- Laura Nordmann (Author), 2011, What is Corporate Social Responsibility?, Munich, GRIN Verlag, https://www.grin.com/document/206914