Corporate Social Responsibility - The Concept

Digital Marketing - Study Notes:

The concept of corporate social responsibility (CSR) emerged as a response to various economic, social, and environmental challenges faced by businesses and communities. This development is not surprising, considering that businesses have now become a major part of our daily lives and significantly impact the lives of billions of people in diverse ways.

CSR is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public.

“By practicing CSR, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental” (Fernando and Scott, 2021).

We can then that CSR is concerned with the ways in which an organization exceeds its minimum legal obligations (Johnson, 2017).

Stances on CSR

Different organizations take different stances on CSR. They represent a progressively more inclusive ‘list’ of stakeholder interests, and a greater breadth of criteria against which strategies and performance will be judged (Johnson, 2017).The table outlines four basic types that illustrate these differences. As we can see, the table also explains what such stances typically involve in terms of the ways companies act. Now let’s explore the dimensions of each stance.

Laissez-faire

The laissez-faire view (literally ‘let do’ in French) represents an extreme stance in which organizations should be left alone to get on with things on their own account. The only responsibility of business is to make a profit and provide for the interests of shareholders. It is for the government to protect society through legislation and regulation. Organizations need to do no more than meet these minimum obligations.

Enlightened self-interest

Enlightened self-interest is guided by recognition of the potential long-term financial benefit to the shareholders of well-managed relationships with other stakeholders. The justification for social responsibility is that it makes good business sense. For instance, a good reputation in the eyes of customers and suppliers is important to long-term financial success. Working constructively with suppliers or local communities can actually increase the ‘value’ available to all stakeholders.

Forum for stakeholder

A forum for stakeholder interaction explicitly incorporates multiple stakeholders’ interests and expectations, rather than just shareholders, as influences on organizational purposes and strategies. Here the argument is that the performance of an organization should be measured in a more pluralistic way than just through the financial bottom line. Such organizations adopt the principle of sustainability in strategy, one that ensures a better quality of life by attending to all three dimensions of environmental protection, social responsibility, and economic welfare.

Shapers of society

Shapers of society regard financial considerations as of secondary importance or as a constraint. These are visionary organizations seeking to change society and social norms. Public-sector organizations and charities are typically committed to this kind of stance. There are also social entrepreneurs who found new organizations that earn revenues but pursue a specific social purpose.