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Corporate Social Responsibility Essay

Definition:-

[Carroll, 1979; 2008, 500]: “The social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that a society has of organizations at a given point in time.” EU Definition of CSR: “A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” The World Business Council for Sustainable Development (WBCSD): “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”

Concept:-

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a distinction between CSR, which can be a strategic business management concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of CSR clearly goes beyond that.

The Pyramid of CSR

One of the most popular concepts of CSR was developed by Archie Carroll in the early 1990s. It is known as the pyramid of CSR. The pyramid suggests that CSR is composed by 4 different kinds of social responsibility. These responsibilities are economic, legal, ethical and philanthropic. Caroll considers them to be basic economic responsibilities. The aim of economic responsibility is to provide goods and services for consumers and to gain profit out of it. (Crane, Matten, Spence, 2008, p. 62) Due to capitalism the idea of profit transformed into the extent of maximizing profits upon all other aspects. Society sanctioned businesses for their idea of maximizing profits and in this context governments legislated ground rules according to which businesses must operate. The rules indicated companies to comply with regulations and to fulfill legal obligations.

Even though norms like fairness and justice are well ordered in economic and legal responsibility, ethical responsibility goes beyond the law and regulations. It embodies values, norms and expectations from stakeholders, like consumers, employees and a shareholder, for what they believe is fair and right. For a company ethical components of CSR embrace acting morally and ethically and going further than compliance with laws and regulations. (Caroll, 1991)

However, ethical responsibility is intertwined with the legal conception and is pushing toward more regulations and higher expectations. The last and smallest layer of the pyramid is philanthropic responsibility. Philanthropic responsibility means for the company to be a good corporate citizen. Taking this challenge into account the company has to contribute to arts, education and the community and, therefore, endorse human welfare or goodwill. Philanthropic responsibility is sometimes put on the same level as ethical. However, the difference is that it is not seen as unethical behavior if businesses do not contribute their money to humanitarian programs.


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