¶ … Corporate Social Responsibility (CSR). It puts light on the history of Corporate Social Responsibility (CSR). It also discusses the approaches for the implementation of Corporate Social Responsibility (CSR) and also the benefits of its implementation. This paper also seeks to understand the principles and priorities of Corporate Social Responsibility (CSR) and puts light on its future as well.
In the business era the responsibility of the organizations has been to make a profit and to maximize shareholder wealth. The goal of shareholder wealth maximization has been the underlying motivating factors for most the decisions taken by the organizations. The above mentioned goals were considered as the driving force of many organizations historically but now the situation has changed. In the past era the organizations have been exposed to a number of responsibilities in relation to their environment, society and community. This new responsibility or driving force of the organizations is called Corporate Social Responsibility (CSR). It is also termed as the triple bottom line of the organizations, that is, how does the organization performed economically, socially and financially for conducting the operations of the business. (Rionda, 2002)
Definition of Corporate Social Responsibility (CSR)
Although there is no universal definition of Corporate Social Responsibility (CSR), but in general terms it can be defined as the practices of the organizations that have a high level of transparency and are in alignment with legislations, rules and regulations, ethical codes, norms and principles. These practices depict a high level of respect for the people and communities and the societies in which the organizations are operating. Therefore, apart from making profits, organizations are also held responsible for the impact that they have on the people and on the planet earth. People are very for the organizations as they are the stakeholders of the organizations including, employees, investors, consumers, suppliers, business partners etcetera. Nowadays, stakeholders give a lot of importance to Corporate Social Responsibility (CSR). They expect that the organization should act more responsibly in social and environmental terms while conducting their business. In the business world, Corporate Social Responsibility (CSR) is often referred to as corporate citizenship which implies that the organization should act as a responsible and dutiful neighbor in the community in which it is operating. (Rionda, 2002)
History of Corporate Social Responsibility (CSR)
The history of Corporate Social Responsibility (CSR) roots back to a century. However, the most prominent emergence of this pattern was seen in the 1950s. Some formal works were being published in the United States of America but the traces of this principle were quite evident throughout the world. The history of Corporate Social Responsibility (CSR) can be classified into following parts; (Carr, Hart, Mackinnon & Mellinger, 2004)
1950s-1960s; the Modern Period of CSR
The history of CSR is strongly connected with Howard R. Bowen's Social Responsibilities of the Businessman. In his book Howard clearly expressed that businesses must think about their responsibility to the environment and society and making profits must not be the sole purpose of the organizations. Howard contributed a lot to the field of CSR and that is why he is known as the 'father of CSR'. Another achievement in this era in the field of CSR was Keith Davis's 'Iron Law of Corporate Social Responsibility'. This law stated that corporate social responsibility has a positive relation with the size of the business. In other words, the larger the size or the impact of the business on the society, the larger will be its corporate social responsibility or environmental and societal obligations. (Carr, Hart, Mackinnon & Mellinger, 2004)
1970s-1980; the 4 part Definition of Corporate Social Responsibility (CSR)
The early literature indicated that the businesses must not only consider the stockholders but also other people who have a connection with the organization and are related to it. This idea gave rise to the term stakeholders. The theory of stakeholders elaborates that the responsibility of business goes beyond the specific stockholders who have a financial investment in the organization as it also includes other people who have some other relation with the organization no matter if it is in nonfinancial terms. (Carr, Hart, Mackinnon & Mellinger, 2004)
Another important development in this era was Committee for Economic Development (CED)'s Social Responsibility of Business Corporations. The definition given by CED suggested that the businesses should first fulfill their economic obligations and then they should go for increasing their information about the changes in the society and in the end they should try to make major improvements in the society with the aim of benefitting the society. This definition gave rise to Carroll's four part definition...
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