What is Corporate Social Responsibility – Do We Need It? And Why?
On 2011/05/20 · Leave a Comment
In the next series of four articles I plan to explore the idea of “corporate social responsibility” (CSR). In the first one today, I shall discuss the shareholder view of CSR using Milton Friedman’s perspective as my main thesis. In the second article next week, I will explore the stakeholder view of CSR using Peter Drucker’s argument to initiate an alternate set of core ideas. In the third article, I shall take an important long detour to consider economic underdevelopment in the Middle East to highlight what happens to politics and society when the development of the corporation is impeded. In the fourth article, I reconsider the role of CSR in today’s world.
The idea of CSR is to urge corporations to embrace not just the interests of shareholders, but also the interests of multiple stakeholders in the conduct of its activities. These stakeholders often include employees, suppliers, customers, and the local community in which the corporation conducts its business. CSR is a relatively new term although the idea that business has social and moral responsibilities beyond maximizing profit is much older. The term has only gained common currency since the late 1960s and the early 1970s, when the global reach of multinational corporations expanded as international trade and investment flows grew.
Since then public debate over the role of business in society has been most vociferous in respect to the supposed social and environmental costs of economic globalization. Concerns like third world development, poverty, the environment and employment – once the remit of anti-globalization protestors – are now being echoed by large numbers of ordinary citizens worldwide. More recently, a heightened sense of international insecurity has added urgency to the questions surrounding the