The concept of corporate social responsibility (CSR) comprises stakeholder expectations of the social, ethical, legal, and economic impacts of an organization. These expectations and the perceptions stakeholders have of an organization’s corporate social responsibility are central outcomes of business planning, management and operations, marketing, advertising, corporate communication, and public relations. Organizations seek to be perceived to be meeting their obligations to society, thereby gaining and maintaining a license to operate. Legitimacy is a major driver of corporate social responsibility (Sethi 1979). Increasing their attractiveness to potential and existing employees, investors and investment fund managers, and consumers is another motivation for organizations to adopt CSR principles. As such, CSR forms a central charter for public relations in communicating and creating mutual understanding, managing potential conflicts, and to achieving organizational legitimacy.
CSR is studied from communication, management, legal, ethical, and political perspectives. These various strands of research focus on the ethical and moral rationales for organizations, the institutional pressures from legal, economic, and political imperatives, and the management of perceptions about the alignment of organizational practice with social expectation.
CSR has been described as encompassing “the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point of time” (Carroll 1979, 500). The rationale for corporate social responsibility to society has shifted from the purely economic toward a broader conceptualization of the role of the stakeholder. Whereas the classical notion of an organization’s social responsibilities centered on short-term profit making (Friedman 1970), the emergent alternative view focuses on an organization’s reciprocal relationship with a range of stakeholders in society (Freeman 1984). Hence Sethi’s suggestion (1979, 66) that corporate behavior should be congruent with the prevailing norms in society. Whetten et al. bring the stakeholder into sharp focus in their view of CSR as “societal expectations of corporate behavior: a behavior that is alleged by a stakeholder to be expected by society or morally required and is therefore justifiably demanded of business” (2002, 374).
Stakeholder theories suggest that there is a wide range of groups in the social environment that an organization can affect through the secondary impacts of its activity and that these groups have legitimate claims on the organization due to concepts in agency and property theories. For example, a combination of economic, ethical, and legal rationales underpins the CSR slogan of “doing well by doing good.” It is also accepted that the idea of CSR involves “actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (McWilliams & Siegel 2001, 117).
The nature of social responsibility has also evolved. Early conceptions involved notions of business ethics and business philanthropy. Sponsorship and cause-related marketing are often included as examples of socially responsible practice, while at the same time providing a type of commercial advantage to the organization. Social responsibility is now likely to be couched in terms of business sustainability and corporate citizenship. The sustainability case is linked to social, environmental, as well as economic implications of organizational decisions and their longer-term implications for organizational success.
Corporate social reporting provides a core channel for organizations to communicate with stakeholders about their social responsibility activities. It also seeks to measure and assess an organization’s responsibility. The term “triple bottom-line reporting” refers to the economic, social, and environmental dimensions of organizational activity. A fourth dimension, governance, is sometimes added. These four distinct types of CSR practices can be described in the following taxonomy of CSR practices (see Table 1).
Table 1 Taxonomy of CSR practices
Reporting on social and environmental impacts is voluntary in most countries but some, such as France, have made it mandatory. However, many large organizations produce externally audited social impact reports as a competitive strategy within their industry, or to build their legitimacy (as is the case for tobacco companies). Critics question whether issuing a report equates with real commitment to social responsibility and sustainability principles, or whether they are simply “spin”. Proponents, on the other hand, claim the focus is on balancing the needs of all stakeholders with the organization’s profit motives. There is no universally accepted standard or definition of what CSR entails, or of its evaluation methodology, or reporting standard. However, the global reporting initiative (GRI) and the associated AA1000 standard are emerging as the internationally accepted standard for reporting on organizational activity.
- Carroll, A. B. (1979). The three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 497–505.
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- McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117–127.
- Sethi, S. P. (1979). A conceptual framework for environmental analysis of social issues and evaluation of business response patterns. Academy of Management Review, 4, 63 –74.
- Whetten, D. A., Rands, G., & Godfrey, P. (2002). What are the responsibilities of business to society? In A. Pettigrew, H. Thomas, & R. Whittington (eds.), Handbook of strategy and management. London: Sage, pp. 378 – 408.