GGSR CH 1

• Importance of corporate social responsibility (CSR)

  • It offers a remarkable opportunity to discuss the role of business in society after decades (if not centuries) during which business was not always acting in the best interest of our global society
  • CSR illustrates a direction for business to take so it can help address the biggest challenges of our time
  • It is an important alternative to the extreme capitalism that possibly led markets to financial crises and ethical meltdowns in recent years
  • Responsible and ethical business is essential for the future of our world
• CSR defined by Archie Carroll (1979)


  CSR encompasses the economic, legal, ethical, and philanthropic expectations that society has of organisations at a given point in time
• CSR defined by Edward Freeman (1984)


  A view of the corporation and its role in society that assumes a responsibility among firms to pursue goals in addition to profit maximization and a responsibility of the stakeholders to hold the firm responsible for its actions
• CSR defined by Aaronson (2003)


  Business decision making linked to ethical values, compliance with legal requirements, and respect for people, communities, and the environment around the world
• Strategic CSR vs Responsive/Traditional CSR

  Strategic CSR is when the firm becomes involved in an issue related to its operations or value chain. Responsive/Traditional CSR is when the firm becomes involved in a generic issue not related to its operations, or 'random acts of charity'
• Brief history of CSR thought

  • Origins can be traced to early human thought, from religion and Greek philosophy, to scholars of the 17th and 18th centuries
• Narrow view of business responsibilities


  Accroding to Milton Friedman. Business exists to produce products and services, sell them and maximise profit. This is what they are legally bound to do. Shareholders invest for a good return, not to solve societal issues.
• Broad view of business responsibilities


  Businesses have additional responsibilities beyond making profit. Business operates within society and only thrives because of people who are employees, consumers and shareholders. Business has a responsibility to ensure the wellbeing of people and avoid harm.
• Wether and Chandler(2011)

  According to the Stakeholder Theory, CSR can be defined as a view of a corporation and its role in the society that assumes the responsibility among firms to pursue goals in addition to profit maximization and a responsibility of the stakeholder to to hold the firm responsible to its actions.
• Alternative Terms of CSR

  1. Sustainability
  2. Corporate responsibility
  3. Corporate citizenship
  4. Social business
  5. Conscious business
  6. Creating shared value
• CSR thought Timeline

  1979: Adam Smith's The theory of Moral Sentiments

  1913: Industrial Welfare Commision

  1940: Elton Mayo's Hawthome study

  1971: CED, Social Responsibility of Business Corporation

  1979: Archie Carroll's Pyramid

  1984: Edward Freeman's Stakeholder Theory

  1980s-1990s: Social Businesses

  2002: Porter and Kramer's Startegic Corporate Philanthropy

  2010: Startegic CSR, Conscious Capitalism

  2011: Porter and Kramer's Creating Shared Value
• Invisible hand (Smith, 1776)

  Markets will ensure business responsibility since if they behave illegally or immorally the market will punish them. Others claim that society issues are not business problem.
• "Greenwashing"

  being used instrumentally to brainwash us, manipulate consumers to believe that businesses to patch up their immoral behavior.
• Carroll and Shabana, 2010

  Business has enormous responsibilto ensure the well being of people to avoid harm.
• Brivers for change

  1. Successful responsible companies
  2. Consumer growing awareness
  3. Globalization and free flow of information
  4. Financial crisis
• Business Motivation for CSR

  1. Moral Motivation
  2. Relational Motivation
  3. Economic Motivation