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Posted by on Nov 21, 2012 in HowTo | 1 comment

HowTo Define Corporate Social Responsibility

HowTo Define Corporate Social Responsibility

 

According to Ramon Mullerat (2010), the definition of Corporate Social Responsibilities (CSR) is still relatively new and imprecise. Mullerat argues that CSR definition will remain unclear until the concept becomes consolidated, clear and agreed. There are then several reasons why CSR is difficult to define: (1) it is relatively new concept, (2) it rapidly evolves, (3) adopted CSR campaigns depend on the size of the business organization- its services and products, (4) companies’ owners have different objectives, and ultimately, (5) more and more elements are implemented in the concept of CSR (Mullerat 2010). What is more, despite having already a strong recognition, the meaning of CSR “is still a fuzzy one with unclear boundaries and debatable legitimacy” (Lantos quoted in Mullerat, 2010, p. 13). On the other hand, the concept’s proponents have proposed various definitions:

“The intelligent and objective concern for the welfare of society and restrains individuals and corporate behavior from ultimately destructive activities, now matter how immediately profitable, and leads in the direction of positive contributions to human betterment, variously as the latter may be defined” (Kenneth R. Andrews, quoted in Lantos, 2001, p. 8).

“Corporate Social Responsibility is the obligation of the firm to use its resources in ways to benefit society, through committed participation as a member of society, taking into account the society at large independently of direct gains of the company (Kok, Van Der Wiele, McKenna and Brown, quoted in Lantos, 2001, p. 8).

In other words, Corporate Social responsibility can be defined as a responsibility of business organisations towards societies within which they operate, and proposing new policies on how to meet their ethical obligations (Schwartz and Gibb, 1999). In addition, the ‘social responsibilities’ can be divided into four elements: (i) economic responsibilities, (ii) legal responsibilities, (iii) ethical responsibilities and (iv) philanthropic responsibilities (Carroll, 1991).

(i) Every business organisations must offer a product or a service at appropriate price, which represents its real value. The products and services should however provide business with profits to ensure its growth (Carroll and Buchholtz, 2003). In another sense, business management strategies should be directed towards financial performance of the company.

(ii) Today’s business organisations operate under the law. Corporations are expected, therefore, to respect the law and their legal obligations (Carroll and Buchholtz, 2003).

(iii) Ethical responsibilities refer to activities and practices, which are not initially required by law. This may include, for example, the civil rights or environmental obligations, which societies expects business to meet (Carroll and Buchholtz, 2003).

(iv) Philanthropic responsibilities refer to voluntary activities, which are not initially required by law and are not expected of business. Those activities may include, for example, voluntary donations or partnership with local organisations (Carroll and Buchholtz, 2003).

Why business organisations invest in CSR

Corporate Social Responsibilities has become a major field of business activities over the past twenty years, since the concept of CSR arose as a result of globalization and wider access to information (Schwartz and Gibb, 1999). Schwartz and Gibb argue that the results of the business behaviours have always been visible to the public, but the information about those effects like never before, are now widely accessible. Accessibility of information therefore has significantly changed the structure of companies as well as the demands of the markets (Schwartz and Gibb, 1999). Business organisations therefore invest in CSR programs to respond to the growing social expectations of consumers (Carroll and Buchholtz, 2003). In the words of John Ruggie “Companies are doing it. It’s one of the social pressure they have absorbed” (The Economist, 2008). This shows that companies are not committed to implement CSR spontaneously as they do not consider them to be potentially a competitive advantage (Porter, 2003). In fact, corporations include CSR in their ‘to do list’ because of governments and public pressure. Having said that, there are numerous examples of successful corporations such as the Coca Cola Company, whose corporate website highlights the brand’s CSR activities and ‘advertise’ them. In fact, on the Coca Cola Company corporate website a whole part of the website is dedicated to promoting and explaining their ethical and philanthropical activities.  The website demonstrates a very consistent commitment towards implementing CSR and taking regularly additional initiatives. On the other hand, corporations such as Ryanair or Primark may not have extensive CSR campaigns, but their success cannot be contradicted (Morris and Goldsworthy, 2012). Thus, it can be seen that success of the brand do not necessarily relate to the wide-ranging CSR program, which suggest that Coca Cola’s commitment to CSR may not be a major element of its commercial success.

References:

Carroll A., Buchholtz A., 2003. Business and Society. Ethics and Stakeholder Management.  United Kingdom: South-Western, Thomson Learning.

Mullerat R., 2010. International Corporate Social Responsibility: The Role of Corporations in the Economic Order Of the 21st Century. Neitherlands: Kluwer Law International.

Morris T. and Goldsworthy S., 2012. PR Today. The Authoritative Guide to Public Relations. London: United Kingdom. Palgrave Macmillan.

Porter M., 2003. CSR- A Religion with too many priests. European Business Forum [online] Available at: <http://www.fsg.org/Portals/0/Uploads/Documents/PDF/CSR_Religion_with_Too_Many_Priests.pdf?cpgn=WP%20DL%20-%20CSR%20-%20A%20Religion%20With%20too%20Many%20Priests> [Accessed 4th April 2012]

Lantos G., 2001. The Boundaries of Strategic Corporate Social Responsibilities. [online] Available at: <http://ejournal.narotama.ac.id/files/Strategic%20Corporate%20Social%20Responsibility.pdf> [Accessed 4th April 2012]

Schwartz P. and Gibb B.,1999. When Good Companies Do Bad things. New York, USA: John Wiley and Sons Inc.

The Economist, 2008. Does CSR work? The Economist [online] Available at: <http://www.economist.com/node/10491055> [Accessed 4th April 2012]

1 Comment

  1. An interesting article, laying the foundaments of CSR and with good references for further readings!

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