“The movement on corporate social responsibility has won the battle of ideas.” This was the opening line of a 20-page supplement on CSR in The Economist in early 2005 (Crook, 2005). In today’s global business world, the word CSR is a word phrase that can hardly be eschewed by the managers, in other words, all of the world’s top multinationals employ CSR in some form and there is almost no country in which businesses haven’t been engrossed by the threat and the demand for CSR in some way or the other.
There, however, subsists less lucidity on how to construe and elucidate ‘corporate social responsibility’. Aside from the gewgaw of the CSR, one of the most crucial and pivotal problems that exist is the conglomeration and the plethora of actors in the CSR world as it is not exclusive to the corporate world. CSR serves as an amphitheatre for numerous political actors and key players.
What is CSR?
Debates regarding whether corporate social responsibility is a novel and neoteric phenomenon have been doing the rounds.
For instance, if someone was to question Sir Adrian Cadbury, one of the leading voices in the contemporary CSR debate, on responsible corporate governance in the UK and beyond, there is a possibility that he might put forward and maintain the argument that his great grandfathers in the nineteenth century were already knowledgeable and ardent practitioners of CSR. Similar claims can be made by the Thyssens and Krupps in Germany or the Rockefellers, Dukes, and Carnegie in the United States. However, it was in the prelude of the 1950s that the function and the capacity of a corporation in the society became the concentre of all the systematic debates and many regards Howard R. Bowen’s book “Social Responsibilities of the Businessman” (1953) to be the promontory of the ongoing debate on CSR.
Notably, therefore, it was the USA in particular who led the debate on the role and responsibilities of companies in society and it was by 1970s that a burgeoning accord on the comprehension of CSR materialized and developed.
Based at the University of Georgia, it was management professor Archie Carroll, who propounded and entrenched the “Four-Part Model of Corporate Social Responsibility” that has been refined in later publications.
According to Carroll, corporate social responsibility is a multi-layered concept that can extricate into four inter-related, amalgamated aspect that is as follows:
- Economic Responsibility
- Philanthropic Responsibility
- Ethical Responsibility
- Legal Responsibility
These four aspects are presented in a pyramid structure so that true social responsibility involves and compels the meeting of all four levels simultaneously.
Therefore, Carroll and Buchholtz define corporate social responsibility as: “Corporate Social responsibility encompasses the economic, legal, ethical and philanthropic expectations placed on organizations by society at a given point in time” (2000:35)
Economic Responsibility: All companies have shareholders who necessitate the requirement of a reasonable return on investments as there are employees who demand safe and equitable paid jobs and customers who arrogate acceptable quality of products at a fair price.
By definition, this is the underlying and elemental reason for the formalization of a business and thus a company’s first responsibility is to be a properly functioning economic unit to sustain in the market. This first layer of CSR serves as the basis for all the other consecutive responsibilities. Carroll (1991) states that ‘the satisfaction of economic responsibilities is thus required of all corporations.’
Legal Responsibility: The legal responsibility of a corporation expects that the businesses acknowledge and play by the rules of the game. The constitution of a society’s moral values are comprehended by the rule of laws and therefore adhering to these rules is a necessary prerequisite to facilitate reasoning about social responsibilities. Legal responsibility might also be understood as adage that corporations have to accomplish to preserve their license to engage and operate. As with economic responsibilities, Carroll (1991) suggests that the ‘satisfaction of legal responsibilities is required of all corporations seeking to be socially responsible.’
Ethical Responsibility: These responsibilities impel the corporations to behave in a just and fair manner, for instance, in 1995 when Shell decided to dispose of the Brent Spar oil platform in the sea it couldn’t do so as the firm floundered to take into account the society’s wider ethical expectations. Carroll (1991) therefore argues that the ethical responsibilities consist of what is generally expected by society, over and above economic and legal expectations.
Philanthropic Responsibility: The fourth level of corporate social responsibility scrutinizes the philanthropic responsibilities of corporations. The word ‘philanthropy’ is derived from the Greek dictionary that represents ‘the love of the fellow human’, in a business context it encompasses all those issues that are analogous with improving the quality of life of employees, local communities and ultimately society in general. This element of CSR deals with a wide variety of issues such as charitable donations, the building of recreation facilities for employees and their families.
Conclusion:
The benefit of the pyramid model of CSR is that it constructs the numerous social responsibilities into distinct and various dimensions i.e. it is fairly pragmatic. However, this also serves as a limitation as the model doesn’t adequately expound and demonstrate what should happen if two or more responsibilities are in conflict. Another problem with the model is that it is staunchly biased towards the US context
Will CSR be more than an ephemeral management fashion?
The question that often emanates is to what extent is CSR the buzzword of the era i.e. like many other management fashions will it be forgotten in a few years?
A number of arguments theorize and propose that while the language of CSR might change by another label of corporate PR specialists: the constitutional and foundational business challenge will persist.