Corporate Social Responsibility (Sony)
Corporate social responsibility (CSR) is no longer a tenable option to just be silent. Companies have to take responsibilities of their actions as a result of the impacts their businesses causes to the community and their stakeholders. For example during the recent oil spill of the British Petroleum Company (BP), at the coast of United States, the U.S. government did not remain silent on the issue but urged BP to take responsibility of the spill which endangered the health and safety of humans, plant and animal life.
In addition, businesses cannot exist without the community and in the same way, community cannot exist without business. This is in the view that, if there is no community, where would the business sell its products? And where would that business get labor from, to produce those goods and services consumed by that society or the community?
It's in the light of answering these questions that CSR has become a major topic in businesses today than it was 20 years ago. In advancing such an argument, businesses have had a greater awakening that it's not only producing goods and services that matters, but they have a responsibility to give back to the community.
Background of corporate social responsibility:
Since the year 1960s, the concept, nature and scope of corporate social responsibility has changed over time. In the 18th century, Adam Smith, a philosopher and economist developed a classical view that the needs of a society can best be fulfilled through the interaction of individuals and organizations in the market place. He argued that, individuals would produce and deliver goods and services that would earn them a profit and also meet the need of others.
The industrial revolution of the 19th century brought radical technological changes in Europe and United States which acted as a catalyst for the emergence of new industries. The new technology allowed efficient production of goods and services, organization reaped a lot of profits creating a class of wealthy and rich individuals. Completion heightened and organizations became concerned with idea of milking away profits leading to what came to be known as "Social Darwinism." That is survival for the fittest.
The social Darwinism philosophy neglected employees' welfare and the community at large. This is because the philosophy justified cutthroat competitive strategies where other stakeholder such as employees and the society were only used as a means to create wealth for business owners.
Criticisms arose in the 20th century against these large corporations for practicing socially unacceptable behaviors. As a result, laws and regulations were put in place to protect employees, consumers and the society. Example of the said law is the Sherman Antitrust Act.
Between 1900 and 1960s, business all over the world began to accept additional responsibilities other than just being driven by huge profits and obeying the law. Thus, businesses agreed to be good to do good business.
However, between 1960s and 1970s, there was a major turnaround that saw emergence of civil rights movement, consumerism, and environmentalism which influenced societal expectations towards businesses in respect to solving societal problems whether they were caused by the business or not. It's in this view that corporate social responsibility (CSR) still exists in much of the business world today.
CSR trends and developments:
The scholars of CSR agree on a mutual consensus that the concept emerged in 1930s and 1940s and became formalized in 1953.
In 1950s, CSR was referred as social responsibility (SR). According to Carroll, (1999) the work of Howard R. Bowen, (1953) marked the beginning of corporate social responsibility. Bowen argued that the actions of large corporations affected the community at large and businesses ere responsible for their actions covered in their comprehensive income statements.
In 1960s, CSR formalization continued to gain momentum and the only justification to show that firms were socially responsible is to use their economic gain, by paying back to the society.
In the 1970s, business people became occupied with corporate philanthropy and community relations. In 1971, the Committee for Economic Development (CED) comprising of business people observed that business functions by public consent and its basic purpose is to serve the society. This reflected a changing social contract between the business and the society.
In 1979, social responsibility disclosures found their way in the annual reports of the organizations, covering environment, equal opportunity and community involvement.
In 1980s, more studies and intensive research on kept going on and as a result other business themes such as corporate social responsiveness (CSP), public policy, and business...
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