Corporate Social Responsibilities

Corporate Social Responsibility

 

                  A fundamental question to this topic is why should corporations be socially responsible?           

Corporate Social Responsibility (CSR) is the impact of a company’s action on society. Companies do not operate just for personal gain. Every decision and action of companies has impact to stakeholders and wider society, that is why managers are required to consider their acts in terms of a whole social system and anywhere in that system.

The concept of CSR has evolved from simple responsibility of increasing a company’s profits to complex responsibility of considering the impact of company’s action on the whole society.

Here are some of the views on CSR:

1.       As stated by Davis and Blomstrom, CSR requires decision makers to make actions that protect and improve the welfare of society as a whole along with their own interests.

2.       For McGuire, CSR mandates that the corporation has not only economic and legal responsibilities to society that extend beyond these obligations.

3.       According to Epstein, CSR relates primarily to achieving outcomes from organizational decisions concerning specific issues or problems, which by some normative standard have beneficial rather than adverse effects upon pertinent corporate stakeholders. The normative correctness of the products of corporate action have been the main focus of CSR.

At the same time, private corporations should not be merely established for the purpose of private gain, but effective partners of the National Government in spreading the benefits of capitalism for the social and economic development of the nation. (Explanatory note to the Corporation Code of 1980)

According to Archie B. Carroll, a professor and a researcher on the subject of CSR for decades, CSR can be categorized into a pyramid as follows:

 

If put into an equation, CSR is the sum of 4 responsibilities in Carroll’s CSR pyramid.

So what’s the need for being socially responsible?

As identified by our 10^th lecture notes entitled “Introduction to CSR” of our subject, La Sallian Business Leadership in Ethics and CSR, there is a need to be socially responsible given the following reasons:

1.       Self defense – if business is not proactive, the public or government will press for more regulations.

2.       Obligation – Business exists due to being sanctioned by society – owing debt to the society.

3.       Self-interest – Being socially responsible is good for the business in the long run.

Conflict between CSR activities and Business Profit?

I don’t think so. In contrast, CSR activities lead to greater business profit since:

1.       CSR activities are important to and even expected by the public;

2.       CSR activities help organizations hire and retain the people they want; and

3.       CSR activities contribute to business performance.

           

References:

 1.       Text

       https://www.conference-board.org/bio/index.cfm?bioid=1323

Explanatory Note to the Corporation Code of 1980

BUS560M SESSION 10.ppt - De La Salle University-Manila

 

2.       Images

 BUS560M SESSION 10.ppt - De La Salle University-Manila