Brief introduction by Liliana Anam

CSR is present on the front pages of Financial Times or The Economist, United Nations are promoting this idea, and some governments actively support CSR policy e.g. Minister  of CSR in the UK.  What corporate social responsibility stands for?

A piece of history

The origins of CSR are connected with philanthropy and the United States of America, where modern firm was born. At the end of the nineteenth century an idea appeared in the USA that businessmen should be responsible towards the society. This concept gained a popularity particularly in the times of the Depression in 1930s.

However, the modern view on the CSR developed in 1950s thanks to Howard Bowen. He explained in ‘Social Responsibilities of the Businessman’ that business operations influence society and therefore they should be coherent with objectives and values of this society.

Later, in 1960s and 1970s the debate on business ethics built the base for modern tools of CSR such as social audit. 1980s brought the idea of sustainable development and 1990s on corporate citizenship. Together with theory the practice and research have progressed. Currently, Europe and particularly the UK are leading in the practice of CSR.

Corporate Social Responsibility

Generally speaking, the CSR is about relations between business and society. The globalization has brought changes into business, and in result into this interdependence. Business faced new challenges and had to find a way to answer  the new expectations.

The key questions in the CSR is to whom business is responsible and what this responsibility means in practice. Carroll, professor of management at the University of Georgia outlined four groups of responsibilities. According to his model (pyramid) a responsible business is profitable, obeys law, is ethical and acts as a good citizen, supporting the community.

On the other hand professor Freeman, the author of the stakeholder theory, defined to whom business is responsible. He developed the concept of ‘stakeholder’, who is any subject (organization, group or individual) who can affect or is affected by the organization’s activities. In other words, stakeholder has a “stake” in the firm. Conventionally, to the main stakeholders of the firm belong shareholders, employees, clients, communities and environment.

To summarize,  a corporate socially responsible business (recently just corporate responsible) takes into consideration stakeholders in the context of four issues represented by the Carroll’s pyramid: economic, legal, ethical and philanthropic.

However, such definition, although explains the basics of the CSR, creates many questions. Currently, the discussions are focused on three problems. First, which stakeholders should a company be accountable to? Second, what does it mean in practice “taking into consideration” interests of stakeholders. Third, how those issues are related to company’s operations which are assessed only through lenses of two variables: profits and growth.

There are many drivers and factors which influence the development of the CSR. The proponents underline advantages of CSR (so called business case for CSR) while critics shows the gaps between practice and expectations (e.g. conflicts of interests between stakeholders and a company).

The practice of CSR depends on the geographical area, industry, legal system and in result each country and company has its own specificity. Traditionally, CSR means a voluntary approach, beyond the law, thus the practice in e.g. USA and Europe is different.

Noticeable is a fact that CSR is not limited to large companies, as the “corporate” element in terminology might suggest, but might be applied to SMEs as well (responsible entrepreneurship). Moreover, CSR gave the fundaments to social responsibility (SR). SR underlines the importance of sustainable development and is relevant not only to business but to a whole array of organizations such as NGOs and government agendas. With accordance to this approach ISO 26000 standard is building.

CSR is a complex field of the relations between economy, society and its values, with corporate governance issues and relations between a firm and its environment. One of the professors observed that CSR belongs to “highly contested” concepts like justice or democracy, where the discussion about idea is always connected with an application.

Consequently, CSR cannot be treated as a temporary fashion, PR or relations with investors.

The practice proved the CSR is a dynamic concept what is reflected in the innovative and strategic implementation by the companies. There are tools, which help business to implement CSR and measure the performance. CSR indices such as FTSE4Good support investors interested in responsible companies in making informed decisions. Furthermore, new initiatives have emerged, which associate and support business such as Global Compact, CSR Europe, associations of CSR specialists, ethical officers, consulting firms, marketplaces of good practices, research, academic publications and …active critics.  

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