UNI T-V

EngineeringandCor por
at eSocialresponsi
bil
i
ty-Ec ologyandNat uralResources,Roleof
corporationsinthesoc i
et y
,Mor als,Val
ues,Consc iousness,Experi
ence:Basicc odesof
Ethics;Engineer
ingEthi
c s,Evol
utionofCSR,St rategicCSR,Roleofst akehol
dersi nCSR,
Consumer awar eness t owards CSR, CSR as c ompet it
ive advantage, the Gl obal
Compet it
ivenessIndex(GCI)&Sust ai
nabi
li
ty,Issuesi nCSR-or gani
zational
,economi c&
social.

Ourenv ironmentpr ovidesuswi thav ariet yofgoodsandser vicesnec essar yf orourday

todayl i
ves. Thesenat ural r
esour cesi nclude,air ,wat er ,soil,
mi ner al
s, alongwi tht he
cli
mat eandsol arener gy, whic hformt henon- livingor‘ abiotic’par tofnat ur e. The‘ bi
otic
’
orlivi
ngpar t
sofnat urec onsi stsofplant sandani mal s,includingmi crobes. Pl ant sand
animal sc anonl ysur vi
v easc ommuni tiesofdi ffer entor gani sms, all c
losel yl i
nkedt oeach
i
nt heirownhabi tat ,andr equi ri
ngspec ifi
cabi ot i
cc onditions.Thus ,f
or est s, gr asslands,
des erts,mount ains, ri
v ers,lakesandt hemar ineenv i
ronmental lformhabi tat sf or
spec i
alisedc ommuni tiesofpl ant sandani malst ol ivein. I
nt erac t
ionsbet weent he
abioticaspec tsofnat ur eandspec ifi
cl i
vingor gani smst oget herf or mec osy st emsof
varioust y pes.Manyoft hesel ivi
ngor gani smsar eusedasourf oodr esour ces. Ot hers
arel i
nkedt oourf oodl es sdirec tl
y,suc haspol linat orsanddi sper ser sofpl ant s ,soil
animal slikewor ms, whi chrec yclenutr i
ent sforpl antgr owt h,andf ungi andt er mites
thatbr eakupdeadpl antmat er i
alsot hatmi cro-or ganismsc anac tont hedet ritusto
reformsoi lnutr i
ent s.

Histor yofourgl obalenv ironment :

Aboutt enthousandy earsago, whenmanki ndc hangedf r omahunt er -
gat her er,livi
ngi n
wildernessar eassuc hasf orest sandgr asslands, int oanagr icultur alistandpast oralist,
webegant oc hanget heenv ironmentt osui tourownr equi r ement s .Asourabi l
i
t yto
growf oodandusedomest icani mal sgr ew, these‘ nat ur al ’ec osyst emswer edev eloped
i
nt oagr icul
tur alland. Mostt radit
ional agr i
c ultur ist sdependedex tensi vel yonr ain,
streamsandr iver sforwat er .Latert heybegant ousewel lst otapunder gr oundwat er
sour cesandt oi mpoundwat erandc r eat edir rigat edl andbybui ldingdams. Rec entlywe
begant ousef ert il
izersandpest ici
dest ofur therboostt hepr oduc tionoff oodf r omt he
sameamountofl and. Howev erwenowr ealizet hatal l thi shasl edt osev er alundesi rabl e
changesi nourenv ironment .Manki ndhasbeenov er usi nganddepl et ingnat ural
resour ces.Theov er-intensiveuseofl andhasbeenf oundt oex haustt hec apabi l
it yoft he
ecosy stemt osuppor tt hegr owi ngdemandsofmor eandmor epeopl e, allr equiringmor e
i
nt ens i
veuseofr esour ces. I
ndust rial gr owt h, ur bani sat ion, popul ationgr owt handt he
enor mousi ncreasei nt heuseofc onsumergoods ,hav eal lputf ur therst r essesont he
env i
ronment .
Theyc reat egreatquant i
tiesofsol idwast e. Pollutionofai r,wat erandsoi l
hav ebegunt oser i
ousl yaffec thumanheal thChangesi nl andandr esour c euse: Dur i
ng
thel ast100y ear s,abet terheal t
hc ar edel i
v erysy stemandani mpr ov ednut ri
tional
statushasl edt or api dpopul at i
ongr owt h,espec ial l
yi nt hedev elopi ngc ount ri
es .This
phenomenal r
isei nhumannumber shas, inther ec entpast ,plac edgr eatdemandsont he
ear t
h’snat ural resour ces.Lar gest ret chesofl andsuc hasf orest s, gr assl andsand
wet l
andshav ebeenc onv ertedi ntoi nt ensiveagr icul tur e. Landhasbeent akenf or
i
ndust ryandt heur bansec tor s.Thesec hangeshav ebr oughtaboutdr amat i
calt erations
i
nl and- usepat ternsandr api ddi sappear anc eofv aluabl enat ural ec osy st ems. Theneed
formor ewat er,mor ef ood, mor eener gy, mor ec onsumergoods, isnotonl yt her esul tof
agr eat erpopul ati
on, butal sot her esultofov er-
ut ili
zat i
onofr esour cesbypeopl ef rom
themor eaf f
luentsoc i
et ies, andt heaf f
luentsec tionsofourown. Indust r i
al dev el opment
i
sai medatmeet i
nggr owi ngdemandsf oral l cons umeri tems . Howev er ,thesec onsumer
goodsal sogener at ewast ei nev erl ar gerquant ities. Thegr owt hofi ndust rialc ompl exes
hasl edt oashi f
tofpeopl ef r omt heirt raditional, sust ainabl e, rural wayofl i
fet our ban
cent erst hatdev elopedar oundi ndust ry.Dur ingt hel astf ewdec ades, sev er al smal l
urbanc ent ershav ebec omel argec i
t i
es ,somehav eev enbec omegi antmega- cities .This
hasi nc reasedt hedi spar it
ybet weenwhatt hesur r oundi ngl andc anpr oduc eandwhat
thel argenumberofi nc reasi ngl yc onsumer -
orient edpeopl eint hesear easofhi gh
popul at i
ondensi tyc onsume. Ur banc ent ersc annotex i
stwi thoutr esour cessuc has
wat erf romr i
versandl akes, foodf romagr icultural areas, domest icani mal sf rom
past ur elandsandt imber ,f
uel wood, const ruc ti
onmat erialandot herr esour cesf r om
forest s. Rur alagricultur al sy stemsar edependentonf orest s, wet lands, gr assl ands,
riv
er sandl akes.Ther esul ti samov ementofnat ur al resour cesf romt hewi lder ness
ecosy st emsandagr i
c ultur al sec tort ot heur banuser . Themagni tudeoft heshi ftof
resour c eshasbeeni nc reasi ngi npar all
el wit hthegr owt hofi ndust ryandur bani sat ion,
andhasc hangednat ural landsc apesal lov ert hewor ld. I
nmanyc ases, thishasl edt ot he
rapiddev el
opmentoft heur banec onomy ,butt oaf arsl owerec onomi cdev elopmentf or
rural peopl eandser iousi mpov erishmentoft heliv esofwi lder nessdwel lers. Ther esultis
aser i
ousi nequalityint hedi stribut i
onofr esour cesamonghumanbei ngs ,whi c hi sbot h
unfairandunsust ainabl e.

NaturalResources
Eart
h’sResour cesandMan: Ther esourcesonwhi chmankindi
sdependentareprov
ided
byvari
oussour cesor‘spheres’.
1.At
mospher e
•Ox y
genf orhumanr espiration(metabol i
cr equi
rement
s).
•Ox ygenforwildfaunainnat uralec
osy stemsanddomest i
canimalsusedby
manasf ood.
•Ox y
genasapar tofc arbondi oxi
de,usedf orthegrowthofpl
ants(intur
nare
usedbyman) .

Theat mospher ef ormsapr ot ec tiveshellov ert heear t

h. Thel owestl ayer, t
he
tropospher e,t
heonl ypar twar menoughf orust osur vi
vein, isonl y12ki lomet ersthick.
Thest rat ospherei s50ki lomet er sthickandc ont ai
nsal ay erofsul phat eswhi chis
i
mpor tantf orthef ormat i
onofr ain.Italsoc ont ai
nsal ay erofoz one,whi c
habsor bsultra
-
violetlightknownt ocausec anc erandwi thoutwhi ch,nol ifec ouldex i
stonear th.The
atmos pher eisnotuni forml ywar medbyt hesun. Thisleadst oai rfl
owsandv ariati
onsin
cl
imat e, temper atureandr ainfal lindif
fer entpar tsoft heear t h.Itisac ompl exdy namic
system. Ifi
tsnat ureisdisr upt edi taffectsal lmanki nd. Mostai rpollutantshav ebot h
gl
obal andr egi
onal effects.Liv i
ngc reatur esc annotsur vivewi thoutai rev enf oraspanof
af ewmi nutes.Toc ontinuet osuppor tli
fe, airmustbekeptc lean. Majorpol lutantsofair
arec reat edbyindust rialunitst hatr el
easev ar i
ousgasessuc hasc arbondi ox i
de,carbon
monox ideandt oxicfumesi ntot heair .
Ai risal sopollutedbybur ni
ngf ossilfuels.The
buil
dupofcarbondioxidewhichisknownas‘ greenhouseeffect’
intheatmospher eis
l
eadingtocurrentglobalwarming. Thegr
owingnumberofsc ooter
s, motorcyc
les,c
ars,
busesandt r
uc kswhichrunonf ossilf
uel(
petr
ol anddiesel
)isamaj orcauseofair
poll
uti
oninciti
esandal onghighway s.
Airpol
luti
onleadstoac uteandc hroni
crespi
ratorydiseasessuchasv ariousl
ung
i
nfecti
ons,asthmaandev encancer.

2)Hydrospher e
•Cleanwat erfordr i
nki
ng( ametaboli
cr equirementf orli
vi
ngprocesses).
•Wat erf orwashi ngandc ooki
ng.
•Wat erusedi nagr icul
tureandindust ry.
•Foodr esour cesfromt hesea,i
ncludingf i
sh,crustacea,seaweed,etc.
•Foodf romf reshwat ersources,i
ncludingfish,crustaceaandaquaticplants
.
•Wat erf l
owingdownf rommount ainr angeshar nessedtogenerateelec
t r
ici
tyi
n
hydr
oelect r
icpr oj
ects.

Thehy drospherec overst hreequar tersoftheear t

h’ssur face. Amaj orpar toft he
hydrospherei sthemar i
neec osystemi ntheoc ean,whi l
eonl yasmal l partoc cursin
freshwat er.Freshwat eri nriv er
s,lakesandgl aci
ers, i
sper pet uall
ybei ngrenewedbya
processofev apor ati
onandr ai nf
all
.Someoft hisfr
eshwat erl i
esi nunder ground
aquifers.Humanac ti
viti
essuc hasdef orestationcreateser iousc hangesi nt he
hydrosphere. Oncelandi sdenudedofv egetati
on,ther ainer odest hesoi lwhichis
was hedintot hesea. Chemi calsfromi ndustryandsewagef i
ndt hei
rwayi ntor i
ver
sand
i
nt othesea. Wat erpollutiont hust hreatenstheheal thofc ommuni t
iesasal lourl
ives
dependont heav ail
abil
ityofc leanwat er.Thisoncepl enti
ful resourcei snowbec oming
rareandex pensiv eduet opol luti
on.

3)Lithospher e
•Soi l,
t hebasisforagriculturet oprovi
deuswi thfood.
•St one, sandandgr avel,usedf orconstructi
on.
•Mi cronutrientsinsoil
,essent ialf
orplantgrowth.
•Mi c r
osc opicfl
ora,small soi
lfaunaandf ungiinsoil
,i
mpor tantl
ivi
ngorganismsofthe
l
ithospher e,whichbreakdownpl antl
itt
eraswel lasanimal wast
est oprov
idenutri
ents
forplant s.
•Al argenumberofmi neralsonwhi chourindust
riesar ebased.
•Oi l
, coalandgas, ext
rac tedfromunder groundsour ces.I
tprovi
despowerf orvehi
cl
es,
agricul
t uralmachinery,i
ndust ry,andforourhomes.

Thelithospher ebeganasahotbal lofmat terwhi chf ormedt heear thabout4.6bill

ion
yearsago. About3.2bill
i
ony earsago, theear t
hc ool eddownc onsiderabl
yandav ery
specialev enttookplace-li
febeganonourpl anet .Thec rustoft heear thi
s6or7
kil
omet er sthi
ckandl i
esundert hec ontinent s.Oft he92el ement si ntheli
thosphere
onlyeightar ec ommonc onsti
tuentsofc r ustalroc ks. Ofthesec onstit
uents,47%i s
oxygen, 28%i ssili
con,8%i saluminium, 5%i si ron, whil
esodi um, magnesium,potassi
um
andc alciumc onsti
tute4%eac h.Together ,theseel ement sfor mabout200c ommon
miner
alcompounds.Roc
ks,whenbrokendown,
for
msoilonwhi
chmani sdependentf
or
hi
sagric
ult
ure.Thei
rminer
alsareal
sotherawmater
ial
usedinvar
iousindust
ries
.

4)Biosphere
•Food, fromc r
opsanddomest i
canimals,provi
dinghumanmet abol
i
cr equi
rements.
•Food, forall
for msoflif
ewhichli
veasinterdependentspeci
esinac ommunityand
formfoodc hai
nsi nnatureonwhichmani sdependent.
•Ener gyneeds:Bi omassfuelwoodcol
lectedfromf or
estsandplant
at i
ons,
alongwit
h
otherformsofor ganicmatter
,usedasasour c
eofener gy
.
•Ti mberandot herc onstr
ucti
onmaterial
s.

Thisi st her elat ivelyt hinl ay eront heear thi nwhi chl i
fec anex ist. Wi thi ni tt heai r,
wat er, roc ksandsoi landt hel ivingc reat ur es, for mst ruct ur al andf unc tional ec ologi c
al
units, whi cht oget herc anbec onsi der edasonegi antgl obal livingsy st em, thatofour
Ear thit sel f.Wi t hint hi sf r amewor k, thosec har ac ter isedbybr oadl ysi mi largeogr aphy
andc l
imat e, aswel l asc ommuni t i
esofpl antandani mal l
ifec anbedi v idedf or
conv eni enc ei nt odi ffer entbi ogeogr aphi cal real ms. Theseoc c urondi f fer entc ont inent s.
Wi thint hese, smal lerbi ogeogr aphi c al uni tsc anbei dent ifiedont hebasi sofst ruc tural
diff
er enc esandf unc tional aspec tsi nt odi stinc tiver ec ogni zabl eec osy st ems, whi chgi vea
distinct ivec har ac tert oal andsc apeorwat er sc ape. Theireasi l
yv isibl eandi dent ifi
able
char ac ter isticsc anbedesc r i
bedatdi ffer entsc alessuc hast hoseofac ount r y, ast ate,
adi stric torev enani ndi v idual valley ,hill range, riverorl ake. Thesi mpl estoft hese
ecosy st emst ounder st andi sapond. Itc anbeus edasamodel tounder st andt henat ure
ofanyot herec osy st emandt oappr ec i
at et hec hangesov ert imet hatar eseeni nany
ecosy st em. Thest ruc t ur al feat ur esofapondi nc ludei tssi ze, dept handt hequal ityofits
wat er. Theper i
pher y ,theshal lowpar tandt hedeeppar toft hepond, eac hpr ov ide
spec ifi
cc ondi tionsf ordi ff er entpl antandani mal communi ties . Func t ional ly ,av ar ietyof
cyclessuc hast heamountofwat erwi t hint hepondatdi ffer entt i
mesoft hey ear , t
he
quant ityofnut rient sf l
owi ngi ntot hepondf r omt hesur r
oundi ngt er rest rial ec osy stem,
allaf f
ec tt he‘ nat ur e’ oft hepond. Nat ur al cy clesbet weent hespher es: All fourspher es
arec l
osel yint er-linkedsy st emsandar edependentont hei nt egr i
t yofeac hot her .
Dist urbi ngoneoft hesespher esi nourenv ironmentaf fect sal l theot her s. Thel i
nkages
betweent hemar emai nlyi nt hef or mofc y cl
es .Fori nst anc e, t heat mospher e,
hydr ospher eandl ithospher ear eal l connec tedt hr ought hehy dr ol ogi c al cy cle. Wat er
evapor at edf romt hehy dr ospher e( t heseasandf reshwat erec osy st ems) ,for msc louds
i
nt heat mospher e. Thi sbec omesr ain, whi chpr ov idesmoi st ur ef ort hel ithospher e, on
whic hl ifedepends. Ther ainal soac tsonr oc ksasanagentofer osi onandov ermi lli
onsof
year shasc reat edsoi l
, onwhi chpl antl ifegr ows. Atmospher icmov ement si nt hef ormof
wind, br eakdownr oc ksi nt osoi l
. Themostsensi t i
v eandc ompl exl inkagesar et hos e
betweent heat mospher e, t hehy dr ospher eandt hel ithospher eont heonehand, wi ththe
mi l
li
onsofl i
v i
ngor gani smsi nt hebi ospher eont heot her .Al l l
iv ingor gani smswhi chex ist
onear thl i
v eonl yi nt her el at i
velyt hinl ay eroft hel ithospher eandhy dr ospher et hati s
presentont hesur fac eofl andandi nt hewat er . Thebi ospher ewhi cht heyf or mhas
count lessassoc iat ionswi t hdi ffer entpar t soft het hr eeot her‘ spher es’ .Iti st her efore
essent ial tounder st andt hei nter relat ionshi psoft hesepar at eent itiessoi l, wat er ,air
andl ivingor gani sms, andt oappr ec iatet hev alueofpr eser vingi nt ac tec osy stemsasa
whol
e.

RENEWABLEANDNON-
RENEWABLERESOURCES

Ecosy stemsac tasr esour c epr oduc ersandpr oc essor s. Sol arener gyi st hemai ndr i
v i
ng
forceofec ologi calsystems, pr ovidingener gyf ort hegr owt hofpl ant sinf orest s,
grasslandsandaquat i
cec osy stems. Af orestr ec y c l
esit spl antmat erial slowl yby
cont i
nuousl yr et urni
ngi tsdeadmat erial,l
eav es, br anc hes , etc .tot hesoi l.Gr assl ands
recyc l
emat er i
al muc hfast ert hanf orest sast hegr assdr i
esupaf tert her ainsar eov er
everyy ear .Al ltheaquat i
cec osy stemsar ealsosol arener gydependentandhav ec ycles
ofgr owt hwhenpl antlifespr eadsandaquat icani mal sbr eed. Thesunal sodr i
v est he
wat erc ycle. Ourf oodc omesf rombot hnat ural andagr icult ur alec osy st ems. Tr aditi
onal
agricultural ec osystemst hatdependedonr ainf all havebeenmodi fiedi nr ec entt imest o
produc emor eandmor ef oodbyt headdi ti
onofex t rachemi c alsandwat erf r om
i
r r
igat i
onsy stemsbutar est il
l dependentonsol arener gyf ort hegr owt hofc rops.
Mor eov ermoder nagr i
c ul
t urec reat esav ari
et yofenv i
r onment al pr oblems , whi ch
ulti
mat elyl eadt othefor mat ionofunpr oductiv el and. Thesei ncludei rrigat ion, whi ch
l
eadst ot hedev elopmentofsal i
nesoi l, andtheuseofar tif
ic i
al fert i
lizer sev ent ual l
yr uin
soilquality, andpest ici
des, whi c har eaheal thhaz ardf orhumansaswel l asdest roying
component sv i
t altothel ong- ter mheal thofagr icul tural ec osy stems. Tomanuf ac tur
e
consumerpr oduc ts,
indust ryr equir esr awmat er i
al sfromnat ure, inc l
udi ngwat er ,
miner al
sandpower .Dur i
ngt hemanuf acturi
ngpr oc ess, thegases, c hemi cal sandwast e
produc tspol l
ut eourenv i
ronment ,unl esst hei ndust ryi sc ar efullymanagedt oc leanup
thismess

Nat ural r esour cesandassoc iat edpr oblemsTheunequal consumpt ionofnat ural
res our ces: Amaj orpar tofnat ur alr esour c esar et odayc onsumedi nt het ec hnologic all
y
adv anc edor‘ dev eloped’ wor l
d, usual lyt ermed‘ theNor th’.The‘ dev elopingnat i
ons’ of
‘
t heSout h’,
inc l
udi ngI ndi aandChi na, alsoov erusemanyr esour c esbec auseoft hei r
gr eat erhumanpopul ation. Howev er ,thec onsumpt i
onofr esour cesperc apit a(per
i
ndi v i
dual )oft hedev elopedc ount r
iesi supt o50t i
mesgr eat ert hani nmostdev elopi ng
count ries. Adv anc edc ount r
iespr oduc eov er75%ofgl obal indust ri
al wast eand
gr eenhousegases .Ener gyfromf ossi lfuelsi sc onsumedi nr elat i
v el
ymuc hgr eater
quant itiesi ndev elopedc ount ries.Thei rperc api tac onsumpt ionoff oodt ooi smuc h
gr eat eraswel l ast hei rwast eofenor mousquant iti
esoff oodandot herpr oduc ts,suc h
aspac kagi ngmat er ial, usedi nt hef oodi ndust ry .TheUSAf orex ampl ewi thj ust4%of
thewor ld’ spopul ationc onsumesabout25%oft hewor ld’sr esour ces.Pr oduc i
ngani mal
foodf orhumanc onsumpt i
onr equir esmor elandt hangr owi ngc rops. Thusc ountries
thatar ehi ghlydependentonnon- veget ar i
andi etsneedmuc hl argerar easf or
past urel andt hant hosewher et hepeopl ear emai nlyv eget ar ian. Planni ngLanduse: Land
i
t selfi samaj orr esour c e,neededf orf oodpr oduc ti
on, ani mal husbandr y,indust ry,and
forourgr owinghumans ettl
ement s. Thesef or msofi nt ensi vel andusear efrequent l
y
ex tendedatt hec ostof‘ wi l
dl ands’ ,ourr emai ningf or est s,gr assl ands, wet landsand
des er ts. Thusi tisessent i
altoev olvear ational land- usepol ic yt hatex ami neshowmuc h
l
andmustbemadeav ailablef ordi ffer entpur posesandwher ei tmustbesi t uated. For
i
nst anc e, ther ear eusual lyalter nat esi tesatwhi c hindust rial compl exesordamsc anbe
buil
t, butanat ur alwilder nessc annotber ecreat edar t i
ficially.Sc i
ent i
st st odaybel iev e
thatatl east10per centofl andandwat erbodi esofeac hec osy stemmustbekeptas
wil
der nessf orthel ongt er mneedsofpr ot ectingnat ur eandnat uralr esour ces. Landasa
resour ceisnowunderser i
ouspr essur eduet oani nc reasi ng‘ landhunger ’-t opr oduc e
suffi
c ientquant itiesoff oodf oranex plodi nghumanpopul ation. Itisal soaf fec tedby
degr adat ionduet omi suse. Landandwat err esour cesar epol l
ut edbyi ndust rial wast e
andr ural andur bansewage. Theyar ei nc reasi nglybei ngdi ver tedf orshor t-term
economi cgai nst oagr icultureandi ndust r y.Nat ural wet landsofgr eatv al
uear ebei ng
drainedf oragr i
c ult
ureandot herpur poses .Semi -aridl andi sbei ngi rrigat edand
overused. Themostdamagi ngc hangei nl andusei sdemonst ratedbyt her apidit ywi t h
whic hf orestshav evani sheddur ingr ecentt imes, bothi nIndi aandi nt her estoft he
world. For estspr ovideuswi thav ari
etyofser v i
c es.Thesei nc l
udepr oc essessuc has
maint ainingox ygenl ev elsint heat mospher e, remov al ofc ar bondi oxide, cont rol over
waterr egi mes,andsl owi ngdowner osionandal sopr oduc epr oduc tssuc hasf ood, fuel,
ti
mber ,f
odder ,medi cinal plant s,etc.Int hel ongt erm, thel ossoft hesei sf argr eat er
thant heshor t
-termgai nspr oduc edbyc onv ert i
ngf or est edl andst oot heruses.

Theneedf orsust ainablelifestyl

es:
Thequal ityofhumanl i
feandt hequalityofec osystemsonear thar
eindi
catorsoft
he
sus t
ainabl euseofr esour ces.
Therear ec l
eari ndicatorsofsust ainablelif
estylesinhumanl i
fe.
•I ncreasedl ongev i
ty
•Ani nc reasei nknowl edge
•Anenhanc ementofi ncome.
Theset hreet ogetherar eknownast he‘ Humandev elopmenti
ndex’
.Thequali
tyoft
he
ecosyst emshav eindic
at orsthatar emor ediff
icul
tt oassess.
•Ast abiliz
edpopul ati
on.
•Thel ongt er mc onser vati
onofbi odiversity.
•Thec ar efullong-ter
museofnat ural resources.
•Thepr event i
onofdegr adationandpol lutionoft heenvir
onment.

Non- renewabler esources

Thesear emineralsthathav ebeenformedi nt hel
ithosphereov ermi l
l
ionsofyearsand
constituteac l
osedsy stem. Thesenon-renewableresources,onc eused, remai
nonear t
h
i
nadi ff
erentformand, unlessrecyc
led,becomewast emat er
ial.Non-renewable
resour cesi
nc l
udef ossi
l f
uelssuchasoi landcoal,whichifextractedatt hepresentrat
e,
wil
l soonbet otallyusedup. Theendpr oductsoffossilf
uelsarei nthef ormofheatand
mec hanicalenergyandc hemicalcompounds ,whic
hc annotber econsti
tutedasa
resour ce.

Renewabl
eresour
ces

Thoughwaterandbi
ological
li
v i
ngresourcesarec onsider
edrenewabl
e.Theyar
einfact
renewabl
eonlywi
thi
nc ertai
nlimit
s.Theyarelinkedt onatur
alcycl
essuchasthewater
cycl
e.
•Fr eshwater(
evenafterbeingused)isevaporatedbyt hesun’
senergy,f
ormswater
vapourandi sreformedi nc loudsandf all
st oear thasr ain.Howev er,wat ersour cescan
beov erusedorwast edt osuc hanex t entt hatt heyl oc all
yr undr y.Wat ersour cesc anbe
soheav ilypoll
utedbysewageandt oxicsubst ancest hati tbec omesi mpossi bl
et ouse
thewat er .
•For ests,oncedest roy edt aket housandsofy earst or egr owi ntofullydeveloped
natural ecosystemswi tht hei rfull compl ementofspec ies. Forest sthusc anbesai dto
behav elikenon-renewabl er esour c esi fov erused.
•Fishar etodaybei ngov er-harv est edunt ilthec atc hhasbec omeaf ractionoft he
ori
ginal resourceandt hef ishar ei nc apabl eofbr eedi ngsuc cessfull
ytor eplenisht he
population
•Theout putofagr icultural l
andi fmi smanageddr opsdr asticall
y.
•Whent hepopulat i
onofaspec iesofpl antorani mal i
sr educ edbyhumanac ti
v i
ties
,
unti
litc annotr eproduc ef astenought omai ntainav iablenumber ,thespec iesbec omes
exti
nc t.
•Manyspec iesar epr obabl ybec omi ngex tinctwi thoutusev enknowi ng, andot her
l
inkedspec i
esar eaffec tedbyt hei rl oss

Whati
scor
por
atesoci
alr
esponsi
bil
it
y?

Socialresponsibi
li
ty(isthe)responsibil
i
tyofanor gani
sati
onfortheimpac tsofi
ts
decisi
onsandac ti
vit
iesonsoc ietyandtheenv ir
onmentt hroughtransparentandethical
behaviourt hati
sc onsi
stentwi thsustai
nabledev elopmentandthewel f
areofsoc i
ety;
takesintoac counttheex pectati
onsofst akehol
der s;i
sincompli
ancewi t
happlicablelaw
andc onsistentwithinternat
ional nor
msofbehav i
our ;
andisint
egratedthroughoutt he
organisation.
”

Cor por atesoc i

al r
esponsi bil
ity( CSR)i salsoknownbyanumberofot hernames. These
i
nc ludec orpor ater esponsi bili
t y,cor porateac count ability,c orpor ateet hic s
, cor porate
citi
z enshi porst ewar dship, responsi bleent repr eneur shi p,and“ t riplebot toml ine, ”to
namej ustaf ew. AsCSRi ssuesbec omei nc reasi nglyint egr atedi nt omoder nbusi ness
prac tices, therei sat rendt owar dsr eferringt oitas“ responsi blec ompet i
tiveness ”or
“cor por atesust ainabi l
it
y .
”Akeypoi ntt onot ei sthatCSRi sanev olvi
ngc onceptt hat
curr ent l
ydoesnothav eauni v ersal l
yac cept eddef i
nition. Gener al l
y ,CSRi sunder stood
tobet hewayf irmsi ntegr atesoc i
al,env i
ronment alandec onomi cc oncer nsint ot heir
values, culture,dec isionmaki ng, strat egyandoper at i
onsi nat r
anspar entand
ac count ablemannerandt her ebyest abli
shbet terpr ac ticeswi thi nt hef i
r m,c reat e
weal thandi mpr ov esoc iety. Asi ssuesofsust ainabledev elopmentbec omemor e
i
mpor t ant ,
t hequest ionofhowt hebusi nesssec toraddr essest hemi sal sobec omi ngan
elementofCSR. TheWor ldBusi nessCounc ilforSust ainabl eDev elopmenthasdesc ri
bed
CSRast hebusi nessc ontr i
but iont osust ainabl eec onomi cdev elopment .Buildingona
baseofc ompl i
anc ewi t
hl egislat ionandr egul ations, CSRt ypicall
yi nc l
udes“ bey ondl aw”
commi t ment sandac t i
vi
t i
esper tainingt o:
•c or por ategov ernanc eandet hics;
•heal thandsaf et y;
•env ironment al stewar dship;
•humanr ight s( i
ncludingc or el abourr i
ght s);
•sustai
nabledevel
opment;
•condit
ionsofwork(inc
ludi
ngsaf
etyandheal
th,
hour
sofwor
k,wages)
;
•i
ndustrialr
elat
ions;

CorporateSoc i
al Responsibili
ty:
AnImpl ement ati
onGui deforBusi ness
•communi tyi
nvolvement ,devel opmentandi nv estment;
•involvementofandr espec tfordi versecultur esanddi sadvantagedpeopl
es;
•corpor at ephil
ant hropyandempl oyeevolunt eer i
ng;
•cust omersat i
sfac t
ionandadher encetopr inc i
plesoffaircompet i
ti
on;
•ant i
-briberyandant i-
cor
r uptionmeasur es;
•ac count abil
i
ty,transparenc yandper f
ormanc er eport
ing;and
•suppl ierr el
ations,forbot hdomest icandint er nati
onalsupplychains.

General
ly,CSRi sunderstoodtobethewayf i
rmsintegr
atesocial
,envi
ronmentaland
economicconc ernsi
ntotheirval
ues,cul
ture,
deci
sionmaking,
st r
ategyandoperati
ons
i
nat ranspar entandaccountabl
emanner ,
andtherebyest
abli
shbet t
erpract
iceswithi
n
thefi
rm, c
r eatewealt
handi mprovesoci
ety.

Theseel
ementsofCSRar ef r
equentl
yinterconnect
edandinter
dependent
,andapplyt
o
fi
rmswherevertheyoperateintheworld.I
tisalsoimpor
tanttobearinmindthatt
here
aretwoseparat
edr i
versforCSR.

Oner el
atestopubli
cpolicy
.Bec ausetheimpactsofthebusinesssec toraresolarge,
andwi thapotent
ialtobeeitherpositi
veornegativ
e,iti
snat uralthatgovernmentsand
widersociet
ytakeac l
oseinterestinwhatbusinessdoes.Thismeanst hatthe
expectati
onsonbusinessesarer i
sing;gov
ernmentswill
belooki ngforway stoinc
rease
thepositi
vecontr
ibuti
onofbusi ness.

Thesec onddr iveri st hebusi nessdr iver.Her e,CSRc onsider ationsc anbeseenasbot h
costs(e.g.,
ofi ntroduc i
ngnewappr oac hes)orbenef it
s( e.g.,
ofi mpr ovingbr andv al
ue,or
i
ntroduc i
ngpr oduc tst hatmeetsust ainabil
itydemands) .Ther emai nderoft hisguide
addressest hesec ondoft hesedr ivers. Si
nc ebusinessespl ayapi votalr ol
ebot hinjob
andweal thc reationi nsoc ietyandi nt heef fi
c i
entuseofnat ur alcapital,CSRi sac entral
managementc onc ern. Itpositionsc ompani est obothpr oac ti
v elymanager isksandt ake
advantageofoppor tuni ti
es,espec i
al l
ywi threspec ttot heirc orporater eput at
ionand
thebroadengagementofst akeholder s.Thel attercaninc l
udeshar ehol ders,employees,
customer s,communi ties,suppl i
ers,gov ernment s,non-government alor ganizati
ons,
i
nternat i
onalor gani zat i
onsandot her saffectedbyac ompany ’sac ti
viti
es

WhyhasCSRbecomei mportant
?
Manyfactor
sandi
nfl
uenceshaveledt
oinc
reasi
ngat
tent
ionbei
ngdev
otedt
other
oleof
compani
esandCSR.
Thesei
ncl
ude:

•Sust
ainabl
edev
elopment
:Uni
tedNat
ions’
(UN)st
udi
esandmanyot
her
shav
e
underl
inedt hef ac tt hathumanki ndisusingnat uralresourcesataf ast err at
ethanthey
arebeingr epl ac ed. Ifthi
scontinues,futuregenerationswi l
l nothav ether esour
c est
hey
needfort heirdev elopment .I
nt hissense, muchofc ur r
entdev elopmenti s
unsustainabl e—i tc an’tbecontinuedf orbothpr acti
cal andmor alreasons. Relat
ed
i
ssuesi ncludet heneedf orgreaterat tenti
ont opover t
yallev i
ationandr espectfor
humanr i
ght s. CSRi sanent rypoi ntf
orunder standi
ngsust ainabledev elopmentissues
andrespondi ngt ot hemi nafir
m’ sbusinessst rat
egy .

•Gl obali
zation:Withitsat tendantfocusonc r
oss -
bordertrade, multinat i
onal
enterpri
sesandgl obalsuppl ychains—economicglobaliz
ati
oni sincreasi nglyrai
si
ngCSR
concernsrelatedtohumanr esourcemanagementpr acti
ces,environment alprot
ecti
on,
andhealthandsaf ety,amongot herthings.CSRcanpl ayav i
talroleindet ecti
nghow
businessimpac t
slabourc ondi t
ions,l
ocalcommuni t
iesandec onomi es, andwhatst eps
canbet akent oensurebusi nesshelpst omaintai
nandbui ldthepubl icgood. Thiscanbe
especial
lyi
mpor tantforex port-ori
entedfir
msinemer gi
ngec onomi es.

•Gov ernance:Gov ernmentsandi ntergovernmental bodi

es,suc hast heUN, t
he
Organisati
onforEc onomicCo-operationandDev elopment(OECD)andt heInternati
onal
LabourOr gani
zat i
on( I
LO)havedev elopedvariousc ompacts,dec l
arations,gui
deli
nes,
pri
nciplesandot herinstrumentst hatoutli
nenor msf orwhatt heyc onsidertobe
acceptablebusinessc onduct
.CSRi nstrumentsoftenr ef
lectinternati
onal l
y-
agreedgoal
s
andlawsr egardinghumanr i
ghts,theenv ir
onmentandant i-
corruption.

•Cor poratesec torimpac t

:Thesheersi zeandnumberofc orporat i
ons,andtheir
potentialtoimpac tpoliti
cal,
socialandenv i
ronment al systemsr elativetogovernments
andc ivi
lsociety,rai
sequest i
onsabouti nfl
uenc eandac countabil
ity.Ev ensmalland
medi umsizeent erprises(SMEs), whic
hc oll
ec t
ivel
yr epresentt hel argestsi
ngle
empl oyer,
hav easi gnif
icantimpact.Compani esaregl obal ambassador sofchangeand
values.Howt heybehav eisbecomingamat terofincr easinginterestandi mportance
(seeboxbel ow) .

•Communi cati
ons:Advancesinc ommunicati
onst echnology,suchastheI nter
netand
mobil
ephones, aremakingiteasiertotrackanddisc ussc or
por at
eactiv
ities.I
nternal
l
y,
thi
scanf aci
l
itatemanagement ,report
ingandc hange. Exter
nally,
NGOs ,themedi aand
other
sc anquickl
yassessandpr of i
l
ebusinessprac t
icestheyv i
ewasei therproblemati
c
orexemplary.I
nt heCSRc ontext
, moderncommuni cationstechnologyoffers
opportuni
ti
est oimprov
edi al
ogueandpar tnershi
ps .

•Financ e:
Consumer sandinvestorsareshowingincr
easingint
erestinsuppor t
ing
responsibl
ebusinesspract
icesandar edemandingmor einf
ormationonhowc ompanies
areaddressingrisksandopportunit
iesrel
atedtosocialandenvi
ronmentalissues.A
soundCSRappr oac hcanhelpbuildshareval
ue,lowerthecostofc api
tal
,andensure
betterresponsi
venesstomar kets.

•Ethic
s:Anumberofser
iousandhigh-pr
ofi
l
ebr eac
hesofcorpor
ateethi
csresul
ti
ngi
n
damagetoempl
oyees,
sharehol
der
s, communit
iesortheenvi
Corpor
ateSoci
al
Responsibi
li
ty:AnImplementationGuideforBusinessronment—aswell
asshar
e
price—havecontri
butedtoelevatedpubli
cmistrustofcorpor
ati
ons.ACSRapproac
hc an
helpimprovecorporategov
er nance,t
ransparency,acc
ountabi
li
tyandet
hic
alst
andards
(seemat r
ixbelow).

•Consi stencyandCommuni ty
:Cit
izensinmanyc ount
riesaremakingitcl
earthat
corporati
onsshouldmeetthesamehi ghstandardsofsocial
andenv i
ronment
alcare,
no
mat t
erwher etheyoperat
e.IntheCSRc ontext
,firmscanhelpbui
ldasenseof
communi t
yandshar edapproachtoc ommonpr oblems.

•Leadership: Atthesametime,ther ei sinc

reasingawar enessoftheli
mitsof
gover
nmentl egisl
ativ
eandregulatoryi nit
iati
vestoeffecti
velycaptur
ealltheissuest
hat
CSRaddress. CSRc anoff
ertheflexibi
lityandi nc
entiveforfi
rmst oactinadvanceof
regul
ati
ons,ori nareaswher
er egulationsseemunl ikely
.

•BusinessTool
:Businessesarerecogniz
ingthatadopti
nganeffec
tiveapproachtoCSR
canreducetheri
skofbusinessdisrupti
ons,openupnewopportunit
ies,dr
iveinnov
ati
on,
enhancebrandandcompanyr eputati
onandev eni
mpr ov
eeff
ici
ency.

Keypotenti
albenef i
tsforfi
rmsi mplement i
ngCSRi ncl
ude:
•Betterantici
pat i
onandmanagementofanev er
-expandingspectrumofrisk.
Ef
fect
ivel
ymanagi nggov ernance,legal
,social
,envi
ronment al
,economicandot herri
sks
i
naninc r
easingl
yc omplexmar ketenv i
ronment,withgr eat
eroversightandstakehol
der
scr
uti
nyofc orporateac t
ivi
ties,c
ani mprov et
hesec uri
tyofsupplyandov er
allmarket
st
abil
i
ty.Consideringtheinterestsofpar t
iesconcernedaboutaf ir
m’ si
mpac tisone
wayofbetteranticipat
ingandmanagi ngrisk.

 Impr ovedr eputat

ionmanagement .Organizati
onst hatper f
ormwel lwithregard
toCSRc anbuil
dt heirreputati
on,whilethoset hatper formpoor l
ycandamage
brandandc ompanyv al
uewhenex posed.Reput ation,orbr andequit
y,isfounded
onv aluessuc hast rust
, credi
bil
i
t y
,rel
iabil
i
t y
,qual ityandc onsi
stency.Evenfor
fi
rmst hatdonothav edirectretai
lexposuret hroughbr ands,t
heirreputati
onfor
addressingCSRi ssuesasasuppl ychainpartner —bot hgoodandbad—c anbe
crucialcommer ci
all
y.

 Enhancedabi li
tytor ecr
uit
,developandretai
nstaff.
Thiscanbet hedi r
ectresult
ofpri
deint hec ompany ’
sproductsandpracti
ces,orofintroduci
ngimpr oved
humanr esourcespr acti
ces,suc
has“ fami
ly-
fri
endl
y”polic
ies.Itcanal sobet he
i
ndir
ectr esultofprogramsandac t
ivi
ti
esthatimproveempl oyeemor aleand
l
oyalt
y.Empl oyeesar enotonlyf
ront-l
i
nesourcesofideasforimpr oved
perf
ormanc e,butarec hampionsofac ompanyforwhichtheyar epr oudt owork.

 Impr ovedinnovat
ion,competit
ivenessandmar ketposit
ioning.
CSRi sasmuch
aboutsei z
ingopportuni
tyasav oi
dingrisk.
Drawingfeedbac kfr
omdi ver
se
stakeholderscanbear ichsourceofideasfornewpr oducts,proc
essesand
 mar kets ,result
inginc ompet i
tiv
eadv antages.Forexampl e,afir
mmaybec ome
certif
iedt oenv i
r onment alandsoc i
alstandardssoitc anbec omeasuppl ierto
particularr etai
lers.Thehi storyofgoodbusi nesshasal way sbeenoneofbei ng
alerttot rends, i
nnov at i
on,andr espondingtomar kets.Inc r
easingly
,mainstream
advertisingf eaturest heenv i
ronment alorsoc i
albenefit
sofpr oducts(e.
g.,
hy br
id
cars,unl eadedpet rol,
14et hical
lyproducedcoffee,wi
ndt urbines,et
c.)
.

 Enhanc edoper ationaleffi

ci
enci
esandc ostsavings.Theseflowinpar t
icul
arfrom
i
mpr ovedeffi
c i
enc iesi
dent i
fi
edthroughasy st
emat i
cappr oachtomanagement
thatincl
udesc ont i
nuousi mprovement.Forexample,assessingtheenv i
ronmental
andener gyaspec tsofanoper ationcanrevealopportuni
ti
esf orturni
ngwast e
streamsi nt
or evenuest reams(woodc hipsint
opar ti
cleboard,forexample)and
forsystem-wider eductionsinenergyuse,andc ost
s.

 Impr ovedabil
itytoattrac
tandbui ldeffecti
veandef f
ici
entsupplychain
rel
ationships.
Af i
rmi svul
ner abletot heweakestl i
nkinitssupplychai
n.Like-
mindedc ompaniesc anfor
mpr of
it
abl elong-
termbusi nessr el
ati
onshi
psby
i
mpr ovingstandards,andt herebyr educ i
ngrisks.Largerfir
msc anstimulate
smallerfi
rmswi thwhomt heydobusi nesstoi mplementaCSRappr oach.For
example,somel argeappar elretai
lersr equi
ret heirsuppl
ierstocomplywi t
h
workerc odesandst andards.

 Enhanc edabili
tytoaddresschange.Acompanywithit
s“ eart otheground”
throughregularstakehol
derdial
ogueisinabett
erpositi
ont oanti
ci
pateand
respondtoregul at
ory,ec
onomic,soc
ialandenvi
ronmentalc hangesthatmay
occur.I
ncreasingly
,fi
rmsus eCSRasa“ radar”t
odetectev olvi
ngtrendsint
he
mar ket
.

 Mor er obust“soci
al l
ic
enc e”tooperateint hecommuni t
y.Improvedcit
izenand
stakeholderunderstandingofthefir
mandi tsobjecti
vesandac ti
vi
ti
est r
anslat
es
i
nt oi
mpr ov edst
akeholderr el
ati
ons.This,i
nt ur
n, mayevolvei
ntomor erobust
andendur ingpubli
c,privateandcivi
lsoc i
etyall
i
anc es(al
lofwhichrel
atec l
osel
y
toCSRr eputati
on,discussedabove).CSRc anhelpbuild“soci
alcapit
al.
”

 Accesstocapit
al. Fi
nanci
alinst
itut
ionsareincreasi
ngl
yincorpor
at i
ngsoci
aland
envi
ronmentalcriteri
aint
ot hei
rassessmentofpr oj
ects.
Whenmaki ngdeci
sions
aboutwheretopl acethei
rmoney ,i
nvestorsarelooki
ngforindi
catorsofef
fectiv
e
CSRmanagement . Abusi
nessplanincorporat
ingagoodCSRappr oachi
soften
seenasapr ox
yf orgoodmanagement .

 Impr ovedrelat
ionswithregulators.Inanumberofj uri
sdi
c t
ions,gover
nment s
haveex pedi
tedapprovalprocessesf orf
irmsthathav eundertakensocialand
envi
ronment alacti
vi
ti
esbey ondt hoserequir
edbyr egulat
ion.Insomec ountr
ies,
government suse(orareconsideringusing)CSRindicatorsindecidi
ngon
procurementorex portassi
stanc econtracts
.Thi
sisbei ngdonebec ause
 gov
ernmentsrec
ognizethatwi
thoutaninc
reaseinbusinesssect
orengagement
,
gov
ernmentsustai
nabi
li
tygoal
scannotbereached(seeboxbelow).

 Ac atal
ystf orr esponsibleconsumpt i
on.Changi ngunsust ainabl
epat t
ernsof
consumptioni swi delyseenasani mpor tantdr iv
ert oac hi
evingsustai
nable
devel
opment .Compani eshav eakeyr ol
et oplayi nf ac
ili
tati
ngsustainable
consumptionpat ternsandl i
festylesthrought hegoodsandser vi
cestheypr ovi
de
andthewayt heypr ovi
det hem. “Responsi bl
ec onsumer ism”isnotex c
lusi
vely
aboutchangi ngc onsumerpr eferences.Itisalsoaboutwhatgoodsar esuppliedin
themarket place,t hei
rr el
ationshiptoc onsumerr ightsandsustainabil
it
yissues,
andhowr egul atoryaut horit
iesmedi atet herelationshipbetweenpr oducersand
consumers.

Def
ini
ti
ons

[Carrol
l,1979; 2008,500]:Thesocial
responsi
bil
i
tyofbusi
nessencompassest
he
economic,legal
,ethi
calanddiscr
eti
onaryexpect
ati
onsthatasoci
etyhasof
organiz
ationsatagivenpointinti
me.

EUDef ini
ti
onofCSR: “
Ac onceptwherebyc ompaniesintegr
at esoc i
al and
env i
ronmentalconcernsintheirbusi
nessoper at
ionsandi nt
hei rinteracti
onwi
tht
hei
r
stakeholdersonav ol
untarybasis.
”InOc t
ober2011, t
heEUi nt roducedsomenew
thinkingandstatedthatCSRi s‘theresponsibi
li
tyofenterpri
sesf or
theirimpactsonsoc i
ety”.Weshal ll
ookatthisinmoredet ai
llater.

Mal
lenbakerDefi
nit
ion:“
CSRisabouthowcompani
esmanaget
hebusi
nesspr
ocesses
t
opr
oduc eanoveral
lposi
tiv
eimpac
tonsoci
ety”
.

TheWor ldBusinessCouncil
forSust
ainableDevelopment(WBCSD) :“Cor
porateSoci
al
Responsibi
li
tyi
st hecont
inui
ngcommi t
mentbybusi nesstobehaveet hi
cal
lyand
contr
ibutetoeconomicdevel
opmentwhileimprovi
ngt hequal
ityofli
feoftheworkfor
ce
andtheirfamil
i
esaswel l
asofthelocalcommunityandsoc i
etyatlarge”.

Whati scorporat
e?
Corpor at
emeansanygr oupofpeopl
et hatwor ktogetherinacompanyororganisat
ion,
whet herforprofi
t
ornon- pr
ofi
t.Thus,i
nter
pret
edinthisway ,meanst hat‘c
orporate’
meansany‘body’of
i
ndividualsand
thereforedoesincl
udeNGOs,Publi
cInstit
utionsandSoc ialEnt
erpri
ses

For
msandDi
mensi
onsofCor
por
ateSoci
alResponsi
bil
it
y(CSR)
!
Amongt heorganizati
onal
researcher
swhohav etri
edfromt i
met oti
met oident
if
yand
des
cribethevar i
ousformsofCSR, probabl
ythemostestabli
shedandacceptedmodelof
CSRwhi chaddressestheformsofCSRi stheonecall
ed‘Four-
PartModel ofCor
porat
e
Soci
alResponsibil
ity
’asproposedbyAr chi
eCarr
oll
andsubsequentlyref
inedlat
erby
Carr
ollandBuc hholt
z.

ToCar
rol
l
,CSRi
samul
ti
-l
ayerc
onc
eptc
onsi
sti
ngoff
ouri
nter
-rel
atedaspec
tsof

r
esponsi
bil
i
ties,
namel
y,ec
onomi
c,l
egal
,et
hic
al,
andphi
l
ant
hropi
c.Hepr
esent
sthese

di
ff
erentr
esponsi
bil
i
tiesasc
onsec
uti
vel
ayer
swi
thi
napy
rami
d.

Henc
e,heof
fer
sthedef
ini
ti
onofCSRi
nthesewor
ds:
“Cor
por
atesoc
ial
responsi
bil
i
ty

enc
ompassest
heec
onomi
c,l
egal
,et
hic
al,
andphi
l
ant
hropi
cex
pec
tat
ionspl
acedon

or
gani
zat
ionsbysoc
iet
yatagi
venpoi
nti
nti
me.
”

Letusdi
scuss,
inbr
ief
,eac
hoft
hesef
ourr
esponsi
bil
i
tiesi
ntur
n.

i
.Economi
cResponsi
bil
it
y:

Ac
orpor
ati
onhast
omeeti
tsec
onomi
cresponsi
bil
i
tiesi
nter
msofr
easonabl
eret
urnt
o

i
nvest
ors,
fai
rcompensat
iont
oempl
oyees
,goodsatf
airpr
icest
ocust
omer
s,et
c.Thus
,

meet
ingec
onomi
cresponsi
bil
i
tyi
sthef
irst
-l
ayerofr
esponsi
bil
i
tyandal
sot
hebasi
sfor

t
hesubsequentr
esponsi
bil
i
ties
.Thef
actr
emai
nst
hatmeet
ingec
onomi
cresponsi
bil
i
ty

i
smustf
oral
lcor
por
ati
onst
osur
viv
eint
het
ime.

i
i
.LegalResponsi
bil
it
y:
Thel
egal
responsi
bil
i
tyofbusi
nessc
orpor
ati
onsdemandst
hatbusi
nessesabi
debyt
he

l
awofl
andandpl
aybyt
her
uleoft
hegame.
Lawsar
ethec
odi
fi
cat
ionofdo’
sanddon’
ts

do’
sint
hesoc
iet
y.

Abi
dingbyl
awsi
sthepr
erequi
si
tef
oranyc
orpor
ati
ont
obesoc
ial
l
yresponsi
ble.

Cor
por
atehi
stor
yisr
epl
etewi
thi
nst
anc
eswher
evi
olat
ionofl
awsdi
sal
l
owed

c
orpor
ati
onst
orunanyl
onger
.Enr
on,
Uni
onCar
bide,
Global
TrustBank,
etc
.ar
esome

ofsuc
hil
l
ust
rat
ivec
orpor
atec
asesofsoc
ial
rej
ect
ionandboy
cot
t.
i
i
i.Et
hicalResponsi
bil
it
y:

Theser
esponsi
bil
i
tiesr
efert
oobl
i
gat
ionswhi
char
eri
ght
,just
,andf
airt
obemetby

c
orpor
ati
ons.
Justabi
dingbyl
aw,
proc
edur
e,andr
uleandr
egul
ati
onsdoesnotmake

bus
inessc
onduc
tal
way
saset
hic
alorgood.
Thec
onduc
tofc
orpor
ati
onst
hatgobey
ond

l
awandc
ont
ribut
etosoc
ial
wel
lbei
ngi
scal
l
edet
hic
al.

Henc
e,c
orpor
ati
onshav
eanet
hic
alr
esponsi
bil
i
tyt
odo,
evengoi
ngbey
ondl
awandr
ule

andr
egul
ati
ons,
whatpr
ovesgoodf
ort
hesoc
iet
y.I
not
herwor
ds,
ethi
cal
r
esponsi
bil
i
tiesc
onsi
stofwhati
sgener
all
yex
pec
tedbysoc
iet
yfr
omc
orpor
ati
onsov
er

andabov
eec
onomi
candl
egal
expec
tat
ions.

i
v.Phi
lant
hropi
cResponsi
bil
it
y:

TheGr
eekwor
d‘phi
l
ant
hropy
’meansl
i
ter
all
y‘t
hel
oveoft
hef
ell
owhuman.
’Theuseof

t
hisi
deai
nbusi
nessc
ont
exti
ncor
por
atesac
tiv
iti
est
hatar
e,ofc
our
se,
wit
hint
he

c
orpor
ati
on’
sdi
scr
eti
ont
oimpr
ovet
hequal
i
tyofl
i
feofempl
oyees,
loc
alc
ommuni
ti
es,

andul
ti
mat
elysoc
iet
yatl
arge.

Maki
ngdonat
ionst
ochar
itabl
einst
itut
ions,
bui
l
dingofr
ecr
eat
ional
fac
il
it
iesf
or

empl
oyeesandt
hei
rfami
l
ies
,suppor
tforeduc
ati
onal
inst
itut
ions
,suppor
tingar
tand

suppor
tac
tiv
iti
es,
etc
.ar
etheex
ampl
esofphi
l
ant
hropi
cresponsi
bil
i
tiesdi
schar
gedby

t
hec
orpor
ati
ons.
Iti
simpor
tantt
onot
ethatt
hephi
l
ant
hropi
cac
tiv
iti
esar
edesi
resof
c
orpor
ati
ons,
notex
pec
tedbyt
hesoc
iet
y.

Di
mensi
onsofCSR:

Thef
acet
sanddi
mensi
onsofc
orpor
atesoc
ial
responsi
bil
i
tyi
ncl
udet
heobl
i
gat
ionsa

bus
inesshast
oit
sint
erestgr
oupsal
soc
all
ed‘
stakehol
der
s.’
Thest
akehol
der
sina

bus
inessi
ncl
udeshar
ehol
der
s/owner
s,c
onsumer
s,empl
oyees,
gov
ernment
,soc
iet
y,

et
c.
Thesear
edepi
ctedi
nthef
oll
owi
ngdi
agr
am:

Shar
ehol
der
s:

I
tist
hepr
imar
yresponsi
bil
i
tyofev
erybusi
nesst
oseet
hatt
heowner
sorshar
ehol
der
s

getaf
airr
ateofdi
vi
dendorf
airr
etur
nonc
api
tal
inv
est
ed.
Thi
sisal
egi
ti
mat
e

ex
pec
tat
ionofowner
sfr
ombusi
ness.
Nat
ural
l
ytheex
pec
tat
ionshav
etober
easonabl
e

andc
onsi
stentwi
tht
her
isksassoc
iat
edwi
tht
hei
nvest
ment
.Owner
sal
soex
pec
t

ec
onomi
candpol
i
tic
alsec
uri
tyoft
hec
api
tal
inv
est
ed.
Ifsuc
hsec
uri
tyi
snotensur
ed,

t
hei
nev
itabl
econsequenc
eiswi
thdr
awal
ofc
api
tal
andsear
chf
oral
ter
nat
ivec
hannel
s

ot
hert
hanbusi
ness
.

Empl
oyees:

Asr
egar
dsr
esponsi
bil
i
tyt
owar
dsempl
oyees
,themaj
ori
ssuesgov
erni
ngt
heempl
oyer
-

empl
oyeer
elat
ionshi
pper
tai
ntowagesandsal
ari
es,
super
ior
-subor
dinat
erel
ati
onsand

empl
oyeewel
far
e.I
tist
her
esponsi
bil
i
tyofmanagementt
opr
ovi
def
orf
airwagest
o

wor
ker
sbasedont
hepr
inc
ipal
ofadequac
y,equi
tyandhumandi
gni
ty.

Mai
ntai
ningahar
moni
ousr
elat
ionshi
pbet
weensuper
ior
sandsubor
dinat
esand

pr
ovi
dingf
orwel
far
eameni
ti
esf
orempl
oyeesar
eal
sot
her
esponsi
bil
i
tiesof

management
.Ther
ear
espec
ifi
clawsi
nIndi
agov
erni
ngf
act
oryempl
oymentt
inderwhi
ch

pr
ovi
si
onofsat
isf
act
orywor
kingc
ondi
ti
onsf
orsaf
ety
,heal
thandhy
giene,
medi
cal

f
aci
l
iti
es,
cant
een,
leav
eandr
eti
rementbenef
it
sar
eobl
i
gat
ionsont
hepar
tofempl
oyer
.
Ther
ear
eot
herl
awsaswel
lpr
ovi
dingf
ort
hesec
uri
tyofwor
ker
sagai
nstt
he

c
ont
ingenc
iesofsi
cknes
s,mat
erni
ty,
empl
oymenti
njur
yanddeat
h,pr
ovi
dentf
undand

pensi
onf
orempl
oyees.

Howev
er,
empl
oyeewel
far
ecannotbev
iewedwi
thi
nthenar
rowl
i
mit
sofl
egal

r
equi
rement
.Empl
oyeewel
far
eisbestsec
uredi
fthemanagementac
cept
sthe

obl
i
gat
iont
osec
ureandmai
ntai
nac
ont
ent
edwor
kfor
ce,
andt
heempl
oyeeshav
ethe

oppor
tuni
tyofdev
elopi
ngt
hei
rpot
ent
ial
abi
l
iti
est
hrought
rai
ningandeduc
ati
on.

Consumeri
nter
est
sar
egener
all
yex
pec
tedt
obet
akenc
areofi
nac
ompet
iti
vemar
ket

t
hroughf
orc
esofdemandandsuppl
y.Howev
er,
per
fec
tcompet
iti
ondoesnotac
tual
l
y

pr
evai
li
nal
lpr
oduc
tmar
ket
s.Consumer
sar
eal
sov
ict
imsofunf
airt
radepr
act
icesand

unet
hic
alc
onduc
tofbusi
ness.
Consumerpr
otec
tionhas,
thus
,beensoughtt
hrough

l
egi
sl
ati
on,
andnon-
gov
ernmentor
gani
zat
ions(
NGOs
)hav
eenl
argedt
hei
rac
tiv
iti
esf
or

uphol
dingc
onsumeri
nter
est
s.

Thesec
ompul
si
onsar
eav
oidabl
eifmanagementassumest
her
esponsi
bil
i
tyofsat
isf
ying

c
onsumerneedsanddesi
stsf
romhoar
ding,
prof
it
eer
ing,
creat
ingar
tif
ici
alsc
arc
ity
,as

al
sof
alse,
misl
eadi
ngandex
agger
atedadv
ert
isement
s.Besi
des,
itwoul
dbei
nthel
ong-

r
uni
nter
estofbusi
nessi
fgoodsofappr
opr
iat
est
andar
dandqual
i
tyar
eav
ail
abl
eto
c
onsumer
sinadequat
equant
iti
esandatr
easonabl
epr
ices
.

Gov
ernment
:

Soci
alr
esponsi
bil
it
yofbusi
nesst
owar
dsgov
ernmentr
equi
rest
hat
:

(
i)t
hebusi
nesswi
l
lconduc
tit
saf
fai
rsasal
aw-
abi
dinguni
t,andpayal
ltax
esandot
her

dueshonest
ly,

(
ii
)managementwi
l
ldesi
stf
romc
orr
upt
ingpubl
i
cser
vant
sort
hedemoc
rat
icpr
ocess

f
orsel
fi
shends,
andnoat
temptwi
l
lbemadet
osec
urepol
i
tic
alsuppor
tbymoneyor
pat
ronage.

Communi
ty:

Ar
isi
ngoutoft
hei
rsoc
ial
responsi
bil
i
tyt
owar
dst
hec
ommuni
tyandpubl
i
catl
arge,

bus
inessmenar
eex
pec
tedt
omai
ntai
nabal
anc
ebet
weent
heneedsofbusi
nessandt
he

r
equi
rement
sofsoc
iet
y.I
ngener
al,
busi
nessshoul
dbesomanagedast
omaket
he

publ
i
cgoodbec
omet
hepr
ivat
egoodoft
heent
erpr
iser
athert
hant
heol
ddoc
tri
net
hat

“
whati
sgoodf
ort
hebusi
nessi
sgoodf
ort
hesoc
iet
y”.

Thesoc
ial
responsi
bil
i
tyofbusi
nessf
irmsshoul
dber
efl
ect
edi
nthei
rpol
i
cieswi
th

r
espec
ttoenv
ironment
alpr
otec
tion,
pol
l
uti
onc
ont
rol
,conser
vat
ionofnat
ural

r
esour
ces,
rur
aldev
elopment
,set
tingupi
ndust
rial
uni
tsi
nthebac
kwar
dregi
ons,

empl
oymentoft
hesoc
ial
l
yhandi
cappedandweakersec
tionsoft
hec
ommuni
ty,
and

pr
ovi
dingr
eli
eft
ovi
cti
msofnat
ural
cal
ami
ti
es.

EVOLUTI
ONOFTHECONCEPTOFCORPORATESOCI
ALRESPONSI
BILI
TY

Therei sani mpressi v

ehi storyassoc i
atedwi ththeev ol
utionoft hec onceptand
defi
nitionofCor por ateSoc ialResponsibil
it
y. Thegener alunder st andingoft het er
m,
‘
Cor por ateSocialResponsi bili
ty’,i
sthatbusinesshasanobl igationt osoc iety,
whi ch
extendsbey onditsnar rowobl igati
ont oi
tsowner sorshar eholder s.Thisideahasbeen
di
sc ussedt hroughoutt het wentiethcentury,butitwasHowar dR. Bowen’ sbook‘Soc i
al
Responsi bil
iti
esofBusi nessman’ publi
shedin1953, whi c
hwast heor iginofmoder n
debateont hesubj ect.Sincet hen,thetopicofc orporatesoc i
al r
esponsi bi
li
tyhasbeen
exploredex tensiv
el y.
Bowenr easonedthatther ewoul dbegener al ,socialandec onomic
benefitst hatwouldac cr uet osoc i
ety
,ifbusinessr ec
ogniz edi t
sbr oadersoc ialgoalsi
n
i
tsdec isions.Development alHistoryofCorpor ateSoc i
alResponsi bil
ity

Thedevelopment al hi
storycompr isesthreephases: (
1)riseandex tension;(2)decli
ne
andabsor ption;(3)andar evi
valoft heconcept. Alt
houghr esponsibil
ityrhetoricr
emains,
theresponsibi l
it
yc onstructhast endedt oevapor ateunderc ri
tici
smofi tsalleged
vaguenessandi nternalinc
onsistenc y.WhatCar rol
lc al
l
s‘ al
ternati
v ethemes ’have
succeededt hatc onstructinacademi cci
rcl
es, corporatesocialperformanc e,
stakehol
dert heory,andbusinesset hicsapproac hes.Inmanager ialcir
clesglobal
corporatecitizenshipandst akeholderstewar dshiprhetoricfocusedi npracticeonan
emer gingec onomi ct heor yofpr ofitabl e‘ r esponsi bility’. Theac ademi cc ont ex toft hi s
dev elopment al hi st or yi sc onc ept ual lyandempi r i
c allydi spar at e. Busi nessandsoc iety
studi esc ompr iseav er yl ooseaf fil
iat ionofsev er al resear chandt eac hi ngst reams. Whi l
e
par tlyov erlappi ng, thesest reamsdonotor gani z ear oundanywi del yac cept edc ore
par adi gm. Thesest reamsgener all
yi nc l
udebusi nesset hic s, cor por at esoc ial
per for manc e, env i
r onment al pr otec t ion, gl obal c or por at ec itizenshi p, int er nat i
onal policy
regi mes ,publ icpol i
c y( i.
e., busi ness- gov er nmentr el ations) , andst akehol deragr eement
theor y.ThePr ogr essi v eEr aAdamSmi thpr onounc edex pl i
c itlyt hatec onomi csel f
-
i
nt er esti st ypical lyamor er el i
abl epat ht osoc ial wel far ei mpr ov ementt hanaf fect ingt o
ac tfort hepubl ici nt er est . Responsi bi li
tyandr esponsi venessemer gedoutof
Pr ogr essi vism. ThePr ogr essi ver ef or mmov ementemer gedi nt heU. S. att het ur noft he
cent ur y .Pr ogr essi v i
smwasmor e“ thec ommonspi r i
tofanager at hert hananor gani z ed
grouporpar t y”.Whi let hemoder nt er mi nol ogydi dnotdev el opunt ilaf t erWor l
dWarI I,
bus inessl eader shav esi nc et he1920swi del yadher edt osomec onc ept i
onof
res ponsi bil
ityandr esponsi venesspr ac tic es. Howev er ,t heydi dsoasbot hbusi ness
apol oget i
c sandbusi nessmet hodsf ordef usingc onf l
ictwi thpot ent iallyi nf l
uent ial
i
nt er estgr oups. Dr uc ker( 1999)st at est hatmanager i
al bal anc ingofst akehol der
i
nt er est sdat est ot he1920s. Fr eeman( 1984) , inhi ssemi nal bookf oundi ngst akehol der
theor izi
ng, c onc ededt hat , despi test rict l
ypr oduc t -
mar kett heor i
esofef ficienc yand
effec tiveness, “ Busi nesshasal way sdeal twi thnon- mar ket -plac est akehol der s”.
(Mi tc hell,1989)“ trac edt heemer genc eofc or por at esoc ial r esponsi bi lityi nt he1920s
asani deol ogi cal mov ementi ntendedt ol egi timi zet hepowerofl ar gec or por ations”
(Ober man, 2000) ,(Car negi e,1900)pr eac hedessent ial ly,“ ric hesobl ige”( l
abel edher ein
i
mi tat i
onof“ nobl esseobl ige” ).Butt hi sphi lant hr opyoc c ur redaf terr et irementf romt he
compet itiver ac ef orper sonal oppor tuni t iespl ay edwi thoutl egal ormor al r estr aint s
(Cher now, 1999) . Moder nEr aThemoder n“ mix edec onomy ”i sabl endofmor eandl ess
regul at edi ndust r ies, leav ingal ar ger olef orgov er nment( Bowen, 1953) .Cor por at e
Soc ial Responsi bi li
t yhadal readyshownc onsider abl ei nt er esti nt he1960sand70s,
spawni ngabr oadr angeofsc holar lyc ont r i
but ions( Chei t, 1964; Heal d, 1970;
Ac ker mannandBauer ,1976; Car r oll, 1979) ,andav er itabl ei ndust ryofsoc ial audi tor s
andc onsul tant s. Inc r easi ngl y ,upt ot he1970st heunder st andi ngofCor por ateSoc i
al
Responsi bilityf oc usedonc ompani es ’ obligat i
ont owor kf orsoc ial bet t er ment . Howev er,
sinc et he1970sf oc usshi ft edt osoc ial responsi vess- inot herwor ds, t hec apac it
yof
organi zat i
onst or espondt osoc i
al pr essur es. Wi t ht hec hangei nt hemanager i
al
appr oac h, Cor por at eSoc ial Responsi bili
t yhasnowdev elopedandbec omemor e
mai nst r eamandl eader shipr olesf ori ni tiat i
ngawi dev ar iet yofCor por at eSoc ial
Responsi bilityac tivitieshav ebeenc r yst allizedandhi ghl ight ed. Howev er ,thet opi c
vani shedf rommostmanager s’mi ndsi nt he1980s( Di er kes&Ant al ,1986; Vogel , 1986)
andonl yr e-emer gedi nni net ies. Wi thawi der angeofc ont ribut ions[ (Wood, DonnaJ.
(1991) ,Gopal akr ishna( 1992) ,Fr ooman( 1997) , Reed, Dar ry l(1999) ,PushpaSunder
(2000) ,Mc Wi lliamsandSi egel ,(2000) ,Mi chael Hopki ns( 2003) ,Donal d( 2007)Mat ten
andJer emy Moon( 2008) , Field, Dav id, (2009) ]t owar dsc or por at esoc ial responsi bility.

DEFI
NITI
ONSOFCORPORATESOCI
ALRESPONSI
BILI
TY

Li
kemanyofmanagementandsoc
ial
sci
enc
edef
ini
ti
ons
,Cor
por
ateSoc
ial
Respons
ibi
l
ity
i
sf r
aughtwithdefini
ti
onalproblems ,whichmakesitdiff
icul
tforauniformpl atfor
mto
assessfi
rms’responsi
venesstoi t.Defi
ningCorporateSoc i
alResponsi
bili
tyisnoteasy
.
Fir
st,thi
sisbecauseCorporateSoc i
alResponsibi
li
tyi
san“ essenti
all
yc ontested
concept,
”bei
ngc onsi
deredasv alued“ i
nternal
l
yc omplex
,”andhav i
ngr el
ati
v el
yopen
rul
esofappli
cation(Moon,Crane, andMat ten,2005:433–434) .

Sec ond, Cor por at eSoc i

al Responsi bil
it yisanumbr ellat er mov er lappi ngwi t hsome, and
beingsy nony mouswi t hot herc onc ept ionsofbusi ness- soc ietyr elat ions( Mat tenand
Cr ane, 2005) .Thi rd, ithasc lear lybeenady nami cphenomenon( Car rol l
, 1999) .
Def initionswer eex pandeddur ingt he1960sandpr olifer at eddur ingt he1970s. I
nt he
1980s , ther ewer ef ewernewdef initi
ons ,
mor eempi r i
c al resear ch, andal ter nat iv
e
themesbegant omat ure. Theseal t ernat ivethemesi nc ludedc or por at esoc ial
per for manc e, st akehol dert heor y,andbusi nesset hicst heor y.Int he1990s, Cor porat e
Soc ial Responsi bilityc ont inuest oser veasac or ec onst r uctbuty ieldst oori s
transf or medi nt oal ter nat ivet hemat icf ramewor ks( Car ol l,1979) . I
nt heear lyper iodsof
2000sandofl at eCor por at eSoc ial Responsi bilityr emai nsanemer gingandel usi v
ei dea
forac ademi c sandac ont est edi ssuef orbusi nessmanager sandt hei rst akehol ders.
Owi ngt ot her angeofc ont r ast i
ngdef initi
ons, thenot ionofCor por at eSoc ial
Responsi bilityhasl edt ot heemer genc eofav ar i
et yofpr ac tices( Fr eeman1984; Cr ane
andMat ten2004; Wel f
or d2004; Habi schandJonker2005; Fai rbr assetal 2005;
Moon, Siegel ,2008; Loc ket t ,Moon, andVi sser , 2006) .Inbr ief, thec onc eptof
Cor por at eSoc ialResponsi bi li
tyhasev olvedc ons i
der abl ysi ncei tfir stemer gedi nt he
1950s( Car roll1999; Fr eeman1984: 38; Carr ollandBei ler1977; St ur divant1977) .As
ar esul tt her eappear st obedi sagr eementaboutwhatt het ermmeans, whet heri t
shoul dbei mpl ement ed, howorwhyi tshoul dbei mpl ement ed( Wel for d2004; St i
gs on
2002) .Att hec or e, Cor por at eSoc ial Responsi bili
t yist hei deat hatr ef l
ec t
st hesoc ial
i
mper at i
v esandt hesoc ial consequenc esofbusi nesssuc cess .Thus , Cor por ateSoc ial
Responsi bilityempi ric al
lyc onsi stsofc learlyar ticulat edandc ommuni c atedpol ici
esand
prac ticesofc or porat i
onst hatr eflectbusi nessr esponsi bilityf orsomeoft hewi der
soc ietal good. Yet ,thepr ec isemani f
est ationanddi rec t ionoft her esponsi bilitylieatt he
disc retionoft hec or por at ion. Cor por at eSoc ial Responsi bi l
ityi st her efor edi ff
er ent i
at ed
frombusi nessf ulfil
mentofc orepr ofit-maki ngr esponsi bi li
tyandf romt hesoc ial
res ponsi bi l
itiesofgov er nment( Friedman, 1970) . Bowen( 1953) , setf or thani nit
ial
def i
nit i
onoft hesoc ial responsi bilityofbusi nessmeni soneoft heear lyc ont ribut orson
thec onc ept ,conc eivedCor por at eSoc ialRespons ibili
tyasbusi nesspol iciesand
dec isions, whi c hgi vev aluest ot hesoc i
ety .“I
tr ef erst ot heobl i
gat ionsofbusi nessmen
topur suet hosepol iciest omaket hosedec i
sionsort of ollowt hosel inesofac tionwhi ch
aredesi rabl eint ermsoft heobj ec tivesandv al uesofoursoc i
et y ”Hear guedt hats oc i
al
res ponsi bi l
ityi snopanac ea, buti ti sani mpor tantv aluet hatmustgui debusi nessi nt he
futur e.

Anotherear l
yproponentofsocialr
esponsibil
ity
, Frederi
ck( 1960) ,defi
nessoci
al
responsibil
i
tyast heuseofsoci
ety’
sr esources;economi candhuman, i
nsuchawayt hat
thewhol esociet
yderivesmaxi
mumbenef it
sbey ondt hec orporateent i
ti
esandthei
r
owner s.
Kei t
hDav is(
1960),setforthhisdefini
tionofsoc ialresponsibi
li
tybyargui
ng
thatitrefersto“busi
nessmen’sdecisi
onsandac ti
onst akenf orreasonsatleast
par tial lybey ondt hef irm’ sdi r ec tec onomi cort ec hni cal int er est ”. Heasser tedt hatsome
soc iallyr esponsi bl ebusi nessdec isionsc anbej ust ifiedbyal ong, compl icat edpr oc essof
reasoni ngashav ingagoodc hanc eofbr ingi ngl ongr unec onomi cgai nt ot hef ir
m, t hus
pay ingi tbac kfori tssoc iallyr esponsi bleout look. Hi s“ Ir
onLawofResponsi bility”hel d
that“ soc i
al responsi bi li
tiesofbus inessmenneedt oc ommensur at ewi tht hei rsoc ial
power ” .Hef ur thert ookt heposi tiont hati fsoc ial responsi bi l
ityandpowerwer et obe
relat ivel yequal , thent heav oidanc eofsoc i
al r esponsi bili
t yl eadst ogr adual er osionof
soc ial poweront hepar tofbusi nesses. JosephW. Mc Gui r est at ed, “t
hei deaofsoc ial
res ponsi bil
itysupposest hatt hec or por at ionhasnotonl yec onomi candl egal obligat i
ons
butal soc ert ainr espons ibili
t iest osoc ietywhi c hex tendbey ondt heseobl igat ions ”.He
l
at erel abor at edbysay i
ngt hatt hec or por at ionmustt akeani nt er esti npol itics ,in
wel far eoft hec ommuni ty ,ineduc at ion, int hehappi nessofi tsempl oyeesandi nf ac ti n
thewhol esoc i
al wor ld. Al andmar kc ont ribut iont ot hec onc eptofCor por ateSoc i
al
Responsi bili
t yc amef romt heCommi tt eef orEc onomi cDev el opment( CED) ,whi c h
obser v ed, “
abusi nessf unc tionsbypubl icc onsentandi tsbasi cpur posei st oser v e
const r uc tivelyt heneedsofsoc ietyt ot hesat isf ac tionofsoc iety ”.TheCEDnot edt hat
thesoc ial c
ont rac tbet weenbusi nessandsoc iet ywasc hangi ngi nsubst ant ial and
i
mpor t antway s–Busi nessi sbei ngaskedt oass umebr oaderr esponsi bilitieswi t h
res pec tt osoc i
et yt hanev erbef or eandt oser v eawi derr angeofhumanv al ues.
Bus inessent erpr ises, inef fec t ,ar ebei ngaskedt oc ont ri
but et ot hequal it yofl ifer at her
thanj ustsuppl yingquant i
tiesofgoodsandser vices. Inasmuc hasbusi nessex ist st o
ser vesoc i
et y,itsf ut ur ewi lldependont hequal ityofmanagement ’sr esponset ot he
changi ngex pec tat ionsoft hepubl i
c( CED, 1971) .Ac c ordingt oVot aw( 1972) ,soc i
al
res ponsi bil
itymayal sor efert oanobl igat ion, al iabi lity,soc i
al consc i
ousness ,cor por at e
l
egi timac y ,
c har itabl ec ont ribut i
ons, “dogoodi sm” ,manager ial enl i
ght enmentandsoon.
Car r oll (1979)def inesc orpor at esoc ial responsi bilityast heent i
r er angeofobl igat ions
abusi nessowest osoc i
et y,andi tenc ompassest heec onomi c, l
egal ,ethi c aland
disc ret ionar yex pec tat ionst hatsoc iet yhasofor gani zat i
onatagi venpoi nti nt ime. A
goodc or por ationi sone, whi ch“ Vol unt ar ilyshar esi tsmar ketpowerandr esul tant
pec uni ar ygai nsandt her ebyy ieldsac c ount abilityf ori tsac tionandper for manc ewi th
thosegr oups- whohav ebeenadv er sel yaf f ect edbyt hepower .”Ac c ordingt ot he
Canadi anCent erf orPhi l
ant hr opy , Cor por at eSoc ial Responsi bilityi s“ asetof
managementpr ac ticest hatensur et hec ompanymi ni miz est henegat ivei mpac t sofi ts
oper at ionsonsoc iet ywhi l
emax imi zingi tsposi t i
v ei mpac ts ”. Thi sdef i
nit i
onpr ov idest he
l
inkbet weent hedec isionst iedt ot hesoc ial responsi bili
tyandt hebusi nessder ivedf rom
ther espec toft hel awy erinst r ument s, thepopul at ion, thec ommuni ti
es ,andt he
env ironment . ‘
TheEur opeanCommi ssionwi tht heGr eenPaper–Pr omot ingaEur opean
framewor kf orCor por at eSoc ial Responsi bili
t y’(Jul y2001)bet terdef inest hec onc eptof
Cor por at eSoc i
al Responsi bilityas“ ac onc eptwher ebyc ompani esi ntegr at esoc ial and
env ironment al conc er nsi nt hei rbusi nessoper at i
onsandi nt hei ri nt erac tionwi tht hei r
stakehol dersonav ol unt ar ybasi s. Bei ngsoc iallyr esponsi bl emeansnotonl yf ulfil
ing
l
egal ex pec tat ions, butal sogoi ngbey ondc ompl i
anc eandi nv est ing‘ mor e’ int ohuman
capi tal , theenv i
r onmentandt her elat ionswi thst akehol der s” . Thewor d“ mor e”i s
under linedal soi nt heor i
gi nal ver sionoft hedoc ument :i
nt hiswayt heEur opean
Commi ssi onwant st oemphasi z et hel ac kofc onsi der ationf ort hedi fferentc ooper at ing
ac t
or shi ghlight ing, fort hef ut ur e, theur genc yofasev er ei nc reaseoft hesensi bi l
ityand
thec ur esand, att hesamet ime, enc our agingt heent erprisest ot hei nv est menti nsoc ial
responsi bilityasav ehic l
ef ort hebestc ompet i
t ivenessandenl ar gement . Pat r i
c i
aDi tzler
(1983)def inedSoc ialResponsi bilityasav olunt ar yex penditureorac tivitybya
corpor ationwi thc har itabl ei nt ent , forwhi c hmar ginal r
etur nsar el esst hant hose
availablef romot heral ternat iveac tiv i
ties .Ac c or dingt oDonnaWood( 1994)c or por ate
soc i
al responsi bi l
itymeans“ abusi nessor gani z at ion’sconf i
gur ationofpr inc i
pl esof
soc i
al responsi bi l
ity ,pr ocessesofsoc ial responsi venessandobser vabl eout c omesas
theyr elat et ot hef irm’ ssoc i
et al rel ationshi ps .”Bac kman( 1975)c onsi der ssoc ial
responsi bilityasot herst at edobj ec t ivesbybusi ness, whichar enotdi rec tlyr elat edt o
economi c,butr at heraddr essi t snegat iveex ter nal i
t i
es,impr oveempl oyee’ sc ondi tions
andt hesoc ietal qual i
tyl ife. TheWor ldBusi nessCounc i
lforSust ai nabl eDev elopment
(WBCSD, 1998, p. 3)ati tsf i
r stdi al oguei n1998c onc ei
v edCor por at eSoc i
al
Responsi bili
t yast hec ont inui ngc ommi tmentbybusi nesst obehav eet hical l
yand
cont ri
but et oec onomi cdev elopmentwhi l
ei mpr ov i
ngt hequal i
tyofl if
eoft hewor kf or ce
andt hei rfami liesaswel lasoft hel oc al communi t yandsoc ietyatl arge. Mor er ec ent ly
(WBSCD, 2000) , thewor ki nggr oupoft hec ounc il convenedser iesofgl obal st akehol der
dialoguesandmodi fi
edt hei rear l
ierdef ini
t i
ont oi ncludesust ai
nabl edev elopment .
Ac cordingt oMi chael Hopki ns( 2003) , Cor por at eSoc i
alResponsi bi li
tyi sc onc er nedwi th
treat i
ngt hest akehol der soft hef ir met hi
c allyori nar esponsi blemanner .‘Et hic allyor
responsi ble’ meanst reat i
ngst akehol der sinamannerdeemedac c ept abl ei nc ivilized
soc i
eties. Soc i
al inc ludesec onomi candenv ironment al r
esponsi bi l
ity .St akehol der sex ist
bothwi thinaf i
r mandout side. Thewi derai mofsoc i
alresponsi bilityi st oc reat ehi gher
andhi gherst andar dsofl i
v ing, whi l
epr eser vingt hepr ofi
tabi l
ityoft hec or por at ion, for
peopl ebot hwi thinandout sidet hec orpor at i
on. Jonesc i
test heUKgov er nment ’s
Depar tmentofTr adeandI ndust ry -
sponsor edCor por ateResponsi bi l
i
t yGr oupwho
definedCor por at eSoc ialResponsi bi l
ityas: themanagementofanor gani zation’ st otal
i
mpac tuponbot hi tsi mmedi at est akehol der sandupont hesoc iet ywi t hinwhi c hi t
oper ates. Cor por at eSoc ial Responsi bilityisnotsi mpl yaboutwhat ev erf undsand
exper ti
sec ompani esc hooset oi nv esti nc ommuni t i
est oresol vesoc i
al pr oblems, i
tis
aboutt hei nt egr itywi thwhi chac ompanygov er nsi tself,f
ulfil
si tsmi ssi on, li
v esbyi ts
values, engageswi thi tsst akehol der s, measur esi tsimpac tsandr epor tsoni tsac t i
v i
ties.
Cor porat eSoc ial Responsi bilityi saboutt hewaybusi nessest akeac countoft hei r
economi c,soc ial andenv ironment al impac tsi nt hewayt heyoper at e- max imi zingt he
benef i
tsandmi nimi z i
ngt hedowns ides.

I
MPORTANCEOFCORPORATESOCI
ALRESPONSI
BILI
TY

Corpor atesint eractwithsoc i

etyinmanyway s.Theyinvestinf ac il
iti
es, produc eandsel l
produc ts, employpeopl eandsubc ont ractori n-sourcemanyac tiviti
es .Theyal sohav ean
i
mpac tont heenv ir
onmentbyt henat ur eofthei racti
vit
ies,byusi ngv aluabler esourc es,
orcr eatingby -produc t
s,whichinfluenc ethephy si
calenvironment .Theiri nteractionwi th
societyi st hr
ought hei
rempl oyeesandt hemanyf acetsofsoc iet yar oundt hem. Further,
corpor atesmayac texpli
c i
tl
yasr esponsi ble,foreit
heremot i
onal reasonsorbusi ness
purposes. Ast heor ganiz
ationisapar toft hesoc i
ety,i
tc annotf unc ti
oni nisolation.So
thereisanobl igat i
onandr esponsibili
tyf romt hepar tofthec or por atet otakeac ti
on
thatpr ot ectsandi mpr ovesthewel fareofsoc iet
yasawhol eal ongwi tht heirown
i
nt erest( Kei thDav is,1975. Thesoc iet ypl ay sapi vot al rolei nt hesuc c essofany
organi z ation. Henc e, noor gani z at ionc anac hiev el ong- ter msuc c esswi thoutf ul f
illingt he
responsi bilityt owar dst hesoc iet y .Or i
gi nal ly, bus inesseswer eseenst rict l
yasec onomi c
ent i
tieswi t ht hepr imar yr esponsi bi l
ityf orpr oduc inggoodsandr ender ingser vi
c es
requi redbyasoc iet y.Thi si st hec l
assi c al v i
ewhel dbyMi ltonFr iedmanandHay ek,
Theodor eLev ittandot her s.Ac c or dingt oFr i
edman( 1971)“ Cor por at esoc ial
responsi bilityi sbey ondt hebasi cpur poseofbusi nessandv iolat est her esponsi bi lityof
bus i
nesst oi tsowner s, thest oc khol der s”. Howev er ,ov ert i
me, busi nessc amet osee
theirr ol einbr oaderper spec tiv es . Wi tht hebusi nessenv i
r onmentbei ngc har act er i
z ed
byv ar iousdev el opment si nc ludi ngt heshi ftofpowerf romc api tal toknowl edge,
i
nc reasedl evel sofl i
ter ac yandt heshr inki ngofgeogr aphi c al boundar iesduet of as ter
meansoft rav el andc ommuni c at i
on, peopl ear e,byandl ar ge, bec omi ngc onsc iousof
theirr ight s, whi chhasl edt oar isei nt heex pec tat i
onsofsoc ietyf rombusi ness . An
organi z ationr ec eiv esi nput sf r omsoc iet yi nt hef or mofski lled/unski ll
edl abor , raw
mat er ial andnat ural r esour ces ,and, int ur n, of f
er sgoodsandser vicest osoc iet y. Thus ,
bus i
nessesdependonsoc iet yf ur therex i
st enc eandi tisi nt heiri nt er estt ot akec ar eof
soc i
et y. Busi nessesc annotoper at eori nv ac uum. Likei ndi v i
dual s, busi nessesal soneed
tolivei nt her eal wor ld, i.
e. ,i
nsoc iet y. Cor por ateSoc i
al Responsi bi l
ityi nv olv esa
commi tmentbyac ompanyt owar dst hesust ainabl eec onomi cdev elopmentoft he
soc i
et y. Itmeansengagi ngdi r ec tlywi thl oc al communi t i
es , ident ifyingt hei rbasi cneeds,
andi nt egr at i
ngt hei rneedswi t hbusi nessgoal sandst r ategi cint end. Thegov ernment
per ceiv esCSRast hebusi nessc ont ribut iont ot henat ion’ssust ai nabl edev el opment
goals. Essent ially, i
ti sabouthowbusi nesst akesi nt oac c ountt heec onomi c, soc ial and
env i
ronment al impac toft hewayi nwhi c hi toper at es. Si mpl yst at ed, CSRi sac onc ept ,
whi chsuggest st hatc ommer c ial c or por at ionsmustf ulfillthei rdut iesofpr ov idingc are
tot hesoc iety. Ac cor dingt oGoy der( 1951) ,indus t ryint het went iet hc ent ur yc anno
l
ongerber egar dedaspr ivat ear r angementf orenr ichingshar ehol der s. Ithasbec omea
j
ointent er prisei nwhi c hwor ker s, management ,c onsumer s, thel oc al gov er nmentand
tradeuni onof ficials, al lplayapar t .Goy derpl eadedt hatbusi nesshast obeac count able
tot hepubl icatl ar geandhesoughtt oequat et hesuggest i
onofar esponsi bl ec ompany
witht het rust eeshi pc onc eptadv oc at edbyGandhi ji,theai mofwhi chi st oensur et hat
privat epr oper tyi susedf ort hec ommongood. Busi nesst odayi sr eal izingt hatt hewor ld
i
snotmadeupofst ranger s.Ther ei sahumanbondage. Ther ear ec ust omer s, empl oy ees,
suppl ier sofgoods, shar ehol der sandt hec ompet itor s.Mostf i
rmst odayr ec ogni zeand
realizet hatt heyhav eobl i
gat ionst ot hesoc i
et yt hatex t endbey ondec onomi c
per f
or manc e. Thi sc onc eptc amet obeknownas“ c or por at esoc ial responsi bility” .Thus ,
thebusi nesshasanobl igat i
ont oc onsi dert hei mpac tofi tsac t
iv i
tiesonal l st akehol der s
whoc onst itut ebr oadersegment sofsoc iet y. Themanager sofl ar gec or por at ionsand
smal lerbusi nessesc amet or eal izet hatt heyhav er esponsi bili
tiest hatex t endbey ond
theirownst oc khol der st oawi der angeofpar tiesdependentonoraf fec tedbyc or por ate
per f
or manc e. Thesepar tiesar eknownasst akehol der s. Fr eeman’ s( 1984)c lassi c
definitionofst akehol der s, arguabl yt hemostpopul ardef i
ni tionc i
t edi nt hel iterat ur e
(KolkandPi nske2006) , pr oposedt hatst akehol der sar e‘ anygr oupori ndi vidual who
canaf fec tori saf fec tedbyt heac hi ev ementofac or por ation’ spur pose’ .Inaddi tiont oa
company ’
sshar ehol der s, i
t sst akehol der si nc ludei t sempl oy ees, thec ommuni tiesi n
whi chi toper at es, suppl ier s,c ust omer s, gov er nmentandsoc ietyatl ar ge. Int heopi nion
ofDav isBlomst or m( 1975) ,itist heobl i
gat i
onofdec i
si onmaker stot akeac ti
onst hat
prot ec tandimpr ovet hewel f
ar eofsoc i
etyasawhol eal ongwi ththeirowni nterest.
Pr otec ti
ngandi mpr ovingar et woaspec tsofsoc ialresponsi bil
it
y.“Topr otect”implies
avoi dingnegat i
v eimpac tonsoc iety,wher eas“t oimpr ov e”impl i
escr eatingposi ti
ve
benef itsforsoc iety.Thebusi nessc l
assshoul dr endert hei rsupportt ot hegener al
peopl e. I
ftheywi l
lbeupl i
ftedsoc i
allyandec onomi cal
ly, thepr oductivityoft hec orporate
i
sal soboundt oi ncrease. TheCor por atesar et oac tac cor dingtotheenv i
ronment al
fac torslikesoc i
al ,l
egal andet hic alenv i
ronment .Aspert heabov efigur eCor porate
Soc ial Responsibi l
it
yisanobl igat ionoft heor gani zationt oac tinawayt hatser vesboth
i
t sowni nterestsandi nt erest sofi t
smanyex ter nal communi ti
esandenv i
ronment al
fac torssuc hassoc ialenv ironmenti ncludingc ust omer s, employees, creditors,suppliers
ofgoods, societyandl egal env ironmentc ompr isesofst at eandlocal gover nment s.To
getsuc c
essfulr esultst hec or por ateshoul dholdmor al valuesandj udgment sandet hic
al
standar ds.Corpor atei snotmer elypr ofi
tmaki ngi nstitut ion.Theyhav ear esponsibil
ity
tohel psocietyt oov ercomepr obl emsoft hebusi ness. Oneoft heareasi nwhi c
h
cor por atesocial respons ibil
ityhast obepr acticedbyc or porateareheal th,-
env ironment alissues, educ at i
on, communi t
y,pr omot ionofar tandc ultureandc li
mat e
change.

Cor
por
ates

So
cia
lEn
vir
onme
nt L
ega
lEn
vir
onme
nt Et
hic
alEn
vir
onme
nt

• Sharehol
ders • La
w •Mor
alThe
orie
s
• Customers
• Gove
rnme
nt •Mor
alVal
uesand
• Employe
es
• Credi
tors J
udg
men
ts
• Suppli
ersofGoods •Et
hic
alSt
andar
ds
• Socie
tyatL ar
ge

BUSI NESSANDSOCI ALRESPONSI BLITY

Bus i
nesspl aysasignifi
c antr
oleinec onomic,social
,poli
tical
andt echnologi
c alaff
airs.
Sobusi nessowesr esponsibi
l
iti
est oallsegment sofsociety.Wealthofac ount ryistoa
greatex tentcontroll
edbybusi ness.Thisgivesbusinessandi tsexecuti
ves“ enormous
power ”toaf f
ectthel i
vesofempl oyees, c
onsumer s,sharehol
der s,
etc.Businessi sapar t
ofthet otalenvi
ronment i
nwhichwel i
ve,bei
ngi nfl
uencedbyi t
, whil
ebeingaf or
cei n
i
nfluencingit.Therelationshi
pbet weenbusinessandi t
senv i
ronmenti soneofmut ual
benef
it
s-asexpl
ainedbel
owinfi
gur
e1.3bothtakef
romandgivetovar
ioussegment
s.
Onlyt
hroughsuc
har el
ati
onshi
pcanabusi
nesssurv
iveandpr
osper.

Soci
al Po
li
ti
c
Sy
ste al

Bu
sin
es

T
echno
logi
ca Ec
ono
mi
l
Syste
m c

Moder nbusi nesshasac qui redasenseofsoc ialresponsibi

lit
yt osoc i
et yingener aland
toitsdiffer entsegment si npar ticular.Theobj ectiveofbusinessi st obal anc ethe
confl
icti
ngc lai
msof‘ st akehol der s’
. Businessi snott oconfinet opr oduc tiveor
commer c ial act i
vi
t i
esasi t ssoc ialconc er n,buti thastot akeint oac countsoc i
al
problems, whi char i
seduet oitsac ti
vity. Busines sanditsSt akehol der sThec onceptof
stakeholderhi ghlightst hef actt hatc or porat eac ti
vit
yisnotsol el
yasetofmar ket
transactions, andal soi nc orpor atesac ooper ati
v eandc ompet i
tiveendeav orthat
i
nv ol
vesal ar genumberofpeopl eor gani zedinv ar i
ousway s.Thec orpor ationisanent ity
throughwhi chmanyi ndi v
idual sorgr oupsofpeopl etrytoac hievet hei rends( Boatright
2003) .Fr eemanandReed( 1983)di stingui sht wosensesoft hewor dst akeholder.The
‘
nar r
owdef initi
on’ i
nc ludesgr oupt hatar ev i
taltot hesur v
ivalandsuc cessoft he
corporate, whi let he‘wi dedef i
nit i
on’ i
nc ludesanygr oupori ndividual thati tcanaf f
ec t
,
orbeaf fec tedby( acc or dingt oBeaauc hampandNor man2001) .Fr eeman( 1984)
presentedast akeholdermapoft heor gani zat i
onasshowni nFigur e
 Share
hol
ders

Go
ver
nme
nt
Empl
oyees
and

Suppl
ier
sof
Busi
ness Cust
omer
s
goods,
Cr
edit
orsand
Deal
ers

Lo
cal Compet
itor
s
Co
mmu n
ity

Soci
etyat
Large

CORPORATESOCI
ALRESPONSI
BILI
TYTHEORI
ESANDMODELS

THESTAKEHOLDERTHEORY
Themostr elevantmodel t hatonec ouldthinkofwhenanal ysingCor porateSoc ial
Responsi bili
tyist hewel l-
knownandac cept edSt akehol derTheor y .Inessenc eit
proposest hatac ompanyneedst ot akeintoac countt heinter estsandv iewsmosti fnot,
allofitsstakehol dersi nor dert obeac cept edandt obesuc cessful inthemar ketplace.
Freeman’ s( 1984)c l
assi cdef i
nitionofst akehol der s,arguablyt hemostpopul ar
definiti
onc itedint heliterat ur e(Kol kandPi nske, 2006)pr oposedt hatst akeholdersare
‘
anygr oupori ndiv i
dual whoc anaf fectori saf f
ec tedbyt heac hi
ev ementofa
corpor ati
on’spur pose’.Thi sisc lear l
yav erybr oaddef i
niti
onandl eav est henot i
onof
stakeandt hef iel
dsofpossi blest akeholder sunambi guouslyopent oincludev ir
tually
ever yone(Mai o2003) .
Pr ov idingmor ec l
ar i
t y
,Clar kson(1995)di stinguishesbet ween
‘
pr i
mar y
’and‘ sec ondary ’stakehol ders.Apr i
mar yorpar ti
cipantst akeholder( Met cal
fe
1998) ,i
sonewi t
houtwhosec ontinuingpar ti
cipationthec orpor at i
onc annotsur vi
veas
agoi ngc oncer n.Sec ondar yornon- parti
cipantst akeholders(Met calfe1998) ,aredef i
ned
ast hosewhoi nf luenc eoraf fect ,orar ei nf l
uenc edoraf fec tedbyt hec or por at ion, but
theyar enotengagedi nt ransac tionswi tht hec or por at i
onandar enotessent ial fori ts
sur viv al. Bal anc ingt hesedi f ferentt y pesofst akehol der shasbeenshownt ohav ean
effec tonf inanc ial per for manc e( Rey nol ds, Sc hul tz ,andHekman2006) .St akehol der
theor yr ec ogni zest hef ac tt hatmostoft hef i
r mshav eal ar geandi nt egr at edsetof
stakehol der s( Coc hr an1994)t owhi cht heyhav eanobl igat ionandr esponsi bility
(Spenc e, Col es, andHar ris2001) .Thet heor yc hal lengest hev iewt hatshar ehol der s
hav eapr ivil
egeov erot herst akehol der s( Or tsandSt rudl er2002) .Shar ehol der s, i
ti s
argued, ar emer elyoneoft hesev er al c laimant sont hef irm( Heat handNor man2004) .
Thist heor yembodi est heneedt obal anc et hec laimsofshar ehol der swi tht heseofot her
stakehol der s( Rufetal .2001)andt hr ought hisbal anc ingac t,theor gani zat ionc an
attr ac tandmai nt ai nt hesuppor toft hei rst akehol der s( Rey nolds, Sc hul tz, andHekman
2006) . Thei deat hator gani z ationsf ac eanon- homogenoussetofst akehol derv iewshas
rec ent lybeenc onc ept ual isedbyRasc heandEsser( 2006) .Thesemul ti
pl ev iewsmaybe
i
nt egr at edandNev illeandMenguc( 2006)di sc usshowdi ffer entst akehol der smayev en
wor kt oget hert oac hiev eac ommongoal , ori ndeedmaybedi amet rical l
yopposedt o
eac hot heronani ssueaf fec tingt heor gani z at i
on. Inr ec enty ear s, st akehol der
attr ibut eshav er ec eivedi nc reasi ngat tent i
on( Fr ooman1999)t oai dmanager si n
dec idinghowt oal loc at et hei rlimi tedt ime, ener gyandot hersc ar c er esour cest o
dif
f er entst akehol dergr oups( Vos2003; Phi l
ips2004) . Ac c ordingt oCooperetal .
(2001) , whenst akehol dert heor yi susedasamanager ial tool i
ti sspec ific al l
yc onc erned
withi dent ifyingwhi chst akehol der sar emor ei mpor tant , andasar esul tshoul dr ec eiv
ea
great erpr opor t ionofmanagementat t ent ion. Iti sc leart hatdi ffer entst akehol der
groupsc anpr esentqui tedi ffer ent ,andof tenc onf licting, needsandi nt er est s( Sen,
Bhat tac har ya2006) .Mi tc hel l
, Agl e, andWood( 1997)i dent ifyur genc y, legi t imac yand
powerasi mpor tantst akehol derat tribut es, ar gui ngt hati nt heirv ar iousc ombi nat ions
theseat tribut esar ei ndi c ator soft heamountofmanagementat t ent ionawar dedt oa
givenst akehol der . Powerr elat est ot heabi lityt obr ingout comesofdesi reort heabi l
it
y
ofoneac torwi thi nasoc ial relat ionshi pt ohav eanot herac tordosomet hi ngt hatt hey
woul dnotot her wi sehav edone( Mi t chel l, Agl e, andWood1997) .Legi timac yi st he
per c ept ionorbel ieft hatst akehol der s’ c l
ai msar epr oper ,desi rabl eorappr opr iat e
(Thor n, Fer r ell
, andFer rel l2003) . Ur genc yisbasedont woc harac ter ist i
c s ;t ime
sensi tivityandi mpor tanc eoft hec laimt ot hest akehol der( Thor ne, Fer rel l
, andFer r el
l
2003) . Inaddi tion, Sac hsetal .(2006)di st ingui shf ourc at egor i
esofst akehol der sas
benef itpr ov i
der s/r ec eiv ersand/orr iskpr ov ider s/bear ers. St akehol der smaybe
grant eddi ffer entl ev elsofsal i
enc edependi ngont henumberofc at egor iesi nt owhi ch
theyf all. Themai nst akehol dergr oupsi nc l
udeshar ehol der s, empl oy ees, c ust omer s,the
l
oc al communi tyandt heenv ironment( Cooperetal . 2001) .Ital soi mpor tantt onot e
thatasi ngl eper sonmayhav edi ffer entst akesi nt heor gani z ation, forex ampl et heymay
beac ust omer , apr ospec t i
veempl oy eeorani nv est or( Nev ill
eandMenguc2006) .The
fi
gur e1. 5i llust rat est hemodel .Ac ompanyi ngener alhasanumberof“ l
ay er s”of
stakehol der st hati tneedst ohav eagoodwor ki ngr elat ionshi pwi th. Ther ear et hr ee
mai ngr oupst hatonehast obec ogni z antwi thnamel ysoc iet alst akehol der , ec onomi c
stakehol der sandor gani zat ional st akehol der s( Wer therandChandl er2006) .
Organiz
ationalSt
akehol
ders
Thesecanbepeoplewhoex i
stwit
hinanorgani
zati
on.
Theyhavemoreorlessadirect
i
nterestthatthecompanyshoul
dbedoingwell
.Inani
dealsi
tuat
iont
hesestakeholder
s

Soc
iet
alSt
akehol
der
s

Eco
no mi
c
Stakehol
de
r
s

Or
gan
iza
tio
n
a
l
St
ake
hol
der
shouldac ti
vel
yseektoenss
urethatthecompanyi sr obustandheal t
hywhi chinturn
couldtranslatei
ntoadvant
agesandbenef i
tsforthesepar ti
cularstakeholders.
Themain
playersinthisfi
el
darestaffandemployees.Otheror gani
zati
onal st
akeholdersarethe
stockholdersandthemanagers.Allt
hesepeoplear edirectl
ylinkedtothesmoot h
runningofac ompany,whic
hawel l
-str
ucturedCor porateSocialResponsibil
it
ypoli
cy
couldaugment .

Economi cSt akehol der s

Inthi sc ategor y,t hecust omer sar ethemostv it alstakeholders.Banker s, cr
editorsand
suppl i
er sc anal sobei ncludedher e.Thesepar t iesser veast hei mpor tantinterf
ac e
betweent hec ompanyandt hel argersoc ietalenv i
ronment .Cust omer sar econsideredto
vit
al aswi thoutt heirl
oy alc ustomer saf i
r mmi ghtaswel lnotex ist
. Moder nbusi ness
theor ieshav epr oposedt hatc ult
ivationofloy al andl ongter mr elat
ionshipwi thone’ s
cust omer sshoul dbet hemai ntaskoft hef irm. Mor singandSc hult
z( 2006)was
refer redt obyTomyBor gglundofHal l
varsson&Hal varsson( 2008)ar guingthat
Cor por ateSoc i
al Responsi bi l
it
yisaf ormofbr andi nganddonec orrectly,agood
Cor por ateSoc i
al Responsi bi l
it
ypol i
cyc anc ultivat ecustomer s’loyaltyaswel las
dif
fer ent i
atingonesel ffromt hec rowd. Customer s,especial
lythosei nt hemass-
consumerf ieldneedt oident i
fywitht hevaluesandpost i
onsaf i
rmt akesinasoc i
ety.

SocietalStakehol ders
Thesest akeholdersdet erminet hebusinessenv ironmentunderwhi chthec ompanies
operate.Themostc ommonpl ayersherear evariousgov ernmentalagenci
es,Non-
government alOr ganizati
ons( NGOs), r
egulators,c ommuni ti
esandtheenv i
ronmenti tsel
f.
Afirmneedst ofollowt helawsoft heland, aswel lasfoll
oworatl eastrespectvarious
i
ssueswhi c
ht hesoc i
etyisengagedi n.Agoodr el
at i
onshipwi t
hthesestakeholder
s
couldactasaki ndof“ insurance”policyforthef i
r mifsomet hi
ngshouldgowr ong
(Wer t
herandChandl er2006) .

Gl
obal
iz
ati
onandt
echnol
ogy
Compani esinthi
sworldofinstantcommuni cati
onc annotaffor
dtoignoretheintri
caci
es
ofglobali
zati
onandtechnology.Theyneedtor espectandac tuponthevari
ousf ast
changingissues,
chall
enges,norms ,
valuesandst andardsthatarecomingupint he
wor l
d.Companiesneedtobeawar eofthatandt heirCorporateSoci
alResponsibil
i
ty
poli
cieshavetorefl
ecttheur genci
esputuponv ari
ousissuesthatgl
obali
zati
onand
technologycancreat
e.

THEARCHI
ECARROLLMODEL

TheCarrol
l’
sCorporateSocialResponsibil
i
typy ramid,adominantmodel t
hathas
enj
oyedwidepopulari
tyamongbusi nessandsoc ietyscholar
s.Car r
oll(1991)
di
ff
erenti
atesCorporateSocialResponsibi
li
tiesintofourlev
els:“economic(r
equi
red)
,
l
egal(
requi
red)
,ethic
al(expected)
,anddi scr
et i
onary(phil
anthrophy)”.

GeneralDescr ipti
on
TheCor porateSoc i
alResponsibil
itypyramidwasf ramedt oembr ac
et heent ire
spectrumofsoc i
ety’
sex pect
ationsofbusinessr esponsibi
li
tiesanddefinethemi nterms
ofcategories.Accordingtothemodel (Figure1.6) ,
fourkindsofsocialresponsibil
iti
es
consti
tutet ot
al CorporateSocialResponsibi
lity
: economic(“makepr of
it”)
,legal (
“obey
thelaw”),ethi
c al(
“beet hi
cal
”),andphilanthropic(“beagoodc or
poratec i
ti
z en”).
 PHILANTHROPI C
Responsibil
i
ties
Beagoodc orporateci
ti
zen
Cont
ribut
er e
sourc
e stothe
co
mmuni ty
:

ETHICAL
Responsibi
li
ti
e
s
Beethical
Obl
i
gat
iontodowhati sri
ght
,jus
t
andfair
.

LEGAL
Responsi bi
li
ti
es
Obeyt hel aw
L
awi
ssoci
ety'
sc odif
icati
onofri
ghtand
wr ong.
Pl
aybyther ulesoft hegame.

ECONOMI C
Responsi
bil
iti
e
s
Beprofi
tabl
e
Thef
oundati
onuponwhic
hal
l

ACKERMAN’ SMODEL
Micro-l
eveltheori
stRobertAckermanwasamongt heear l
iestpeopl
et osuggestthat
responsi
veness,(hepref
erstouset heterm‘responsiv
eness’),
shouldbethegoal of
corporatesocial
endeavor.Ac
ker mandescri
bedt hreephasesthroughwhi c
hc ompanies
commonl ytendtopassindevelopingaresponsetosoc i
ali
ssuesasex plai
nedinthe
f
oll
owi ng

ORGANI
ZAT
IONAL PHASESOFORGANI
ZATI
ONALI
NVOLVEMENT
LEVEL PhaseI PhaseI
I PhaseI
II

Chi
efex
ecut
ive I
ssue:
Corpor
ate Obtai
nknowl
edge Obta
in
o
bli
gat
ion
Acti
on: Addstaf
fspe
cial
i
stor
ganiz
ati
ona
l
commit
ment.
 Cha
nge

Wr i
teand Perfor
manc e
communicate I
ssue:Techn
ica
l expectat
ions.
pol
icy pro
blemActi
on:
Outcome;Enri
ched desi
gndata
purpose,
incr
eased
sys
temand
awareness
i
nterpret
St
affSpec
ial
i
sts env
ironment Provoker esponse
Outcome: fr
omo pe r
a t
ing
uni
ts.
Appl
ydat as yste
m
Te
chni
caland to
i
nf
ormat
ion
a l Perf
or manc e
gr
ound
wo r
k Measur ement

I
ssue:
Management
pr
oblem
Di
vi
si
onMa
nag
eme
nt
Act i
on:Commit
re
s ourc
e sand
mo di
fy
procedures

Outc ome:
I
nc reased
responsiv
eness

InPhase1, acor porat i

on’st opmanager sdeal anex i
stingsoc i
alpr oblem. Att hisst age,
nooneaskst hec ompanyt odeal withit.TheChi efEx ecutiveOf fi
cermer ely
acknowledgest hepr oblembymaki ngawr i
ttenoror al statementoft hec ompany ’s
poli
cytowar dsit.
InPhase2, thec ompanyhi resst affspec i
ali
st sorengagesout si
dec onsultant st ostudy
theproblemandt osuggestway sofdeal i
ngwi thit
.Upt ot hi
spoi nt,thec ompanyhas
l
imiteditselftodec laringi t
si ntent i
onsandf or mulatingitspl ans.
Phase3i si mplement ation.Thec ompanynowi ntegratest hepol i
c yintoitsongoi ng
operati
ons. Unfor t
unat ely
,impl ement ati
onof tenc omessl owlyandof tennotunt i
lthe
governmentorpubl i
copi nionf orcest hec ompanyt oac t.Butbyt hatt ime, t
hec ompany
haslostt heini
tiative. Ackermant husadv i
sest hatmanager sshoul d“ actear l
yi nt helif
e
cycl
eofanysoc ialissuei nor dert oenj oythel argestamountofmanager ialdisc retion
overtheout come. ”

CORPORATESOCIALRESPONSIBILI
TYININDIA
Cor
porat
eSoci
alResponsi
bil
i
tyi
snotanewter
mi nI
ndi
a.Asf
arbac
kas1965,
thet
hen
Pr imeMi ni st erofI ndi a, Lal BhahadurShast ri,pr esi dedov eranat ional meet ingt hat
i
ssuedt hef ol lowi ngdec l
ar at ionont heSoc ial Responsi bilityofBusi ness: “Busi nesshas
res ponsi bilityt oi tsel f ,t oi tsc ust omer s ,wor ker s, shar ehol der sandt hec ommuni ty ,
ev er yent er pr ise, nomat terhowl ar georsmal l, musti fiti st oenj oyc onf i
denc eand
res pec t ,seekac tivel yt odi sc har gei t sr esponsi bilitiesi nal ldirec t i
ons, andnott ooneor
twogr oups, suc hasshar ehol der sorwor ker s, att heex penseofc ommuni tyand
consumer .Busi nessmustbej ustandhumane, aswel lasef ficientanddy nami c .”
“Busi nessc annotsuc c eedi nasoc iet yt hatf ails” ,Cor por at eSoc ial Responsi bi l
ityi s
bei ngc onsi der edasani mper at ivef orc ar ryingonbusi nessi nt hesoc iet yr at hert hanas
ac har i
t y. Whi l
eCor por at eSoc ial Responsi bi l
ityi sr elev antf orbusi nessi nal l soc ieties,
i
ti spar ticul ar lysi gni ficantf ordev el opi ngc ount riesl ikeI ndia, wher el imi tedr esour ces
formeet i
ngt heev ergr owi ngaspi rat ionsanddi v er sityofapl ur alist i
csoc i
et y , maket he
pr oc essofsust ainabl edev el opmentmor ec hal l
engi ng( Sanj ayKumarPanda, 2008) .
Alt houghmanyc ompani es, NGOsandt radeuni onswer eawar eofc or por at e
res ponsi bilitypr ac tic es, thec onc ept sar ey ett obec omepar tofc or ebusi nessst rat egy
i
nmostc ompani esi nI ndi a. Al mostal l compani es, ir respec tiv eofsi z eandsec torhad
someawar enessofc or por at er esponsi bi l
ityandi tspot ent i
al benef its. Whi l
emost
compani esal sohadpol ic iesi npl ac er elat edt ol abouri ssues, c ommuni tyr el at ionsand
env ir onment al pr ac tic es, theywer ef ort hemostpar tnotbac kedupbyc ompr ehensi ve
i
mpl ement at ionandmoni tor ingsy st ems. Communi typr ogr ammesorsoc ial dev elopment
i
ni tiat ives, inmostc ases , wer ephi lant hr opi cand/oradhoci nnat ur eandnoti nt egr ated
i
nt oc or ebusi nessac tivities. Indi anCor por at eSoc ial Responsi bil
it yhast radi tional ly
beenamat t erofc lassi c al pat er nal ist icphi lant hr opy ,financ iallysuppor tingsc hool s,
hospi t alsandc ul tur ei nst itut ions. Howev er ,farf rombei nganadd- onmot i
v at edby
altr uismandper sonal glor y ,t hephi lant hr opicdr i
v ehasbeendr ivenbybusi ness
nec essi ty . Wi thmi nimal st at ewel f
ar eandi nfrast ruc tur epr ov isioni nmanyar eas,
compani eshadt oensur et hatt hei rwor kf or cehadadequat ehousi ng, heal t hc ar eand
educ at ionandsi mul taneousl yt hec ount rygr owsataf astpac e. Ac c or dingt oar epor tby
theCent ref orSoc ial Mar ket sf ort heI nt ernat i
onal Financ eCor por ation( IFC) ,many
l
eadi ngf or eignMul tinat ional Compani esanddomest ict itans ,pr e-emi nent l
ymember sof
theTat aGr oup, hav ebeenst andar d-set ter sonc or eCor por at eSoc ial Responsi bility
i
ssuessuc hasl abourc ondi tions, heal thandsaf ety ,env ir onment al management ,
cor por at egov er nanc eandi nt egr ity .Indi ahasav ener abl et r adi ti
onofphi lant hr opy ,both
i
ndi vidual andbusi ness , andI ndi anl egendandhi st or yisr eplet ewi t hi nst anc esof
gener osi tyf rombot hsour c es. But , unl ikei ndi vi
dual andr eli
gi ousc har itywhi chhasgone
most lyt owar dsi mmedi at er eliefofdi st r ess, busi nessphi lant hr opyhaspr ov idedsec ular
fundsonasi gni ficantsc al et obr ingpr ogr esst osoc iety .Moder nI ndi aowesmuc ht ot he
visionoft hef oundi ngf at her sofI ndi a’ sbusi nessandi ndust r ywhoendowedmany
educ at ional andwel far ei nst itut ionsandf undedmanyawor thyc ause, inc l
udi ngsoc ial
ref or m. Indi anf ami liessuc hasTat aandGodr ej hav easi gni fi
c anti ndust rypr esenc eand
reput at i
onf orsoc ial r esponsi bility. Oneoft heTat aGr oupofc ompani es, Tat aSt eel ,is
thef irsti nt hec ount ryt opr oduc eac or por at esust ainabi l
ityr epor tandi tadmi nist ers
theonl yi ndust ryt owni nt hewor ld, Jamshepur ,whi chhasr ec ei v
edt heI SO14001
env ir onment al qual it yc er tificat ion( Mi c hael Hopl ing( 2008) .Ot herc ompani eshav e
followedTat a’ sl ead, suc hasI nfos ys ,Bal lar puri ndust riesLi mi t ed, Pahar purBusi ness
Par k, For dI ndi a, SamsungI ndi aEl ec tr oni c sandCadbur y’sI ndi a.Theyhav eal lpr oduc ed
environment alandsoc ial repor ts.Cor por atesoc i
al r
esponsibili
tyisonesuc hni c
hear ea
ofCor porateBehav i
orandGov ernanc et hatneedst ogetaggr essivelyaddressedand
i
mpl ement edtac tful
lyi
nt heor ganizations .Atthesamet imeCor porat eSocial
Responsibili
tyisonesuc hef fectivet oolthatsy nergisetheef fortsofc orporateandt he
socialsectoragenc i
est owar dssust ainabl egrowt handdev elopmentofsoc ietal
objecti
vesatl arge. I
ndiai saf astgr owingec onomyandi sboomi ngwi thnationaland
mul ti
nati
onal fi
rms. Att hesamet i
me, theI ndi
anlandal sofacessoc ialchal
lengeslike
pover t
y,population,growt h,c orrupt i
on, andi l
l
iteracyjusttonameaf ew.Ther ef
oreitis
all
t hemor eimper at
ivef ort heI ndianc ompani est obesensi ti
z edt oCor por
at eSoc i
al
Responsibili
tyint her i
ghtper spectiveinor dertof aci
li
tateandc reateanenabl i
ng
environmentf ort hepar tner shipbet weent hecivi
lsoc i
etyandbusi ness .

BUSI
NESSETHI
CS

MEANI
NGOFETHI
CS

Thec onceptofethi
csc omesfromt heGr eekwor d“ ethos”
, meaningbot hani ndividual’
s
characterandac ommuni ty’
sc ulture.Gener all
ypeopl ebel
iev ebusinessethicsi nvolv
es
adheringtolegal
,regulator
y,pr ofessionalandc ompanyst andard,keepingpr omi sesand
commi tmentsandabi di
ngbyt hegener alpr i
nci
plesl i
kefai
r ness,truth,honest yand
respect.Thi
swor dEt hi
cshasor i
ginatedf romet hosmeani ngc harac t
erormanner s.
Ethicsisthussai
dt obet hesour ceofmor alsat reatiseont hismor alpri
nciples
recognizedrul
esofc onduct.

VALUES, ETHI CSANDSOCI ALRESPONSI BI LITY:

Businesset hi csi snotadi st inc tandsepar at easpec tofc or porat elife.Itper meat esall
aspec tsanddepar tment soft hef irm, itsoper ationsandi t slinkswi tht hec ommuni ty.
At
times, thewor det hic sandv al uesar eusedi nter changeabl y.Val ues, aresetofbel i
ef s
germanet othei ndiv idual,gr ouporor gani zat ionandi st hebasi sf orac tion. Iti s
somet hi ng, whi chi shel dinr egar d, impor tanc eorwor th. Val ues, areessent iallya
thoughtbasedc onc ept .Whi leet hicsar easetofac t i
ons, bor noutofbel iefs, at titudes
andv alues. I
ti sabr anc hofknowl edgec onc er nedwi t hmor al princ i
plest hatgov ernor
i
nf l
uenc ec onduc t.Et hi csisessent iall
yanac tiv i
ty-basedc onc ept .Pointt ot he
i
nes capabl er ealityt hatCor por at eSoc ial Responsi bili
tyi snot hingmor et hansmar t
managementc loakedi nt hel anguageofmor alityandet hics( Rei ch2007) . Et hic sis
personspec ific,c ont ex tspec ificandc ult urespec ifi
c .I
ti sal soi mpor tantt odi st i
ngui sh
between‘ manager ial ethics ’and‘ busi nesset hic.’Whi l
et hef ormeri sami crov iewandi s
anex ami nationofi ndi vi
dual lev el behav i
our . Thel atterisamac rov i
ewandex ami nes
organi zat i
onal behav iour .I
tisi mpor tantt ol ookatt hemi cr olev elbehav i
ourbec aus e(1)
mostunet hical dec isi onsemanat eatt hei ndi vidual level, rathert hanasc ollec tive
decisionsofboar dsorc ommi t tees, and2)i ndiv i
dual sensi tiviti
eswi ll cont ri
but et o
compani est aki nganac t i
veet hi cal standwhi l
emaki ngdec i
sions. Et hicsandCor por ate
Soc i
al Responsi bili
tyar ec losel yr elatedc onc ept s.Et hicsdeal withi ssuesper t ainingt o
organi zat i
onsandi tsst akehol der si nday -to-daybusi nesst ransac ti
ons. Soc ial
responsi bi l
ityr efer st oac ompany ’
spost ur er elat i
vet ot hec ommuni tyei thernar r owly
orbr oadl ydef ined. Et hicst endst obemor ei nt ernal inor ient ation, whi l
esoc ial
responsi
bil
it
yi smoreex t
ernal
,butthi
sorientationi
snotanabsoluteone. AsShellhas
notedinit
sPr inc
ipl
esandPr ofi
tsReport,societ
yhasmov edfroma‘TrustMe’ posi
ti
on,
thr
ougha‘ TellMe’positi
ontoa‘ShowMe’ posit
ion,
implyi
ngthatverbalassurancesby
corporat
emanagementar enolongersuff
icienttogainthetr
ustofstakeholders.
I
ndependentv eri
fi
cationofsoci
alandenvi
ronment alrepor
tsisonewayinwhi ch
companiesareaddr essi
ngthisl
ackoftrust.

IMPORTANCEOFBUSI NESSETHI CS
Busi nessOper at eswi thi nt heSoc iet y:
Iti sapar tofsubsy stemofsoc i
et y. Busi ness’ s
func tioningmustc ont ri
but et ot hewel far eoft hesoc iety .Inor dert osur vive, dev elop
andex cel busi nessmustear nsoc ial sanc t ionoft hesoc ietywher ei tex istsandf unc t
ions.
Wi thoutear ningsoc ial sanc t
ions, busi nessc annotgetl oy alc ust omer s, cannotoper ate
i
nt hemar ketpl ac e. Ifbusi nessgr owsl ar ger ,thepubl ict akesmor ei nt er esti nit ,since
thi swi lll
eadt oagr eat eri mpac tont hec ommuni ty. ThomasDonal dsonsay st hatt her e
i
sagr owi ngr eal i
z at ional l overt hewor ldt hatet hi csi sv itallyi mpor tantf orany
bus i
nessandf ort hepr ogr essofanysoc iet y
. Ethic smakesf oranef ficientec onomy ;
et hicsal one, notgov er nmentorl aws, canpr ot ec tsoc iety; ethic si sgoodi ni t self;et hics
andpr ofi
t sgot oget heri nt helongr un. Anet hicallyr esponsi blec ompanyi sonewhi ch
hasdev elopedac ul tur eofc aringf orpeopl eandf ort heenv i
ronment ;ac ultur ewhi ch
followsdownwar dsf r omt het opmanager sandl eader s. Thesoc ial r esponsi bilit
yof
bus i
nessi nv olv eset hic swhi chmustber ef l
ec tedi nt hephi l
osophyofbusi ness
or ganiz ation. “Thebi ggestc orpor at i
on, liket hehumbl estpr i
v at ec it izen, mustbehel dt o
str ictc ompl ianc ewi tht hewi lloft hepeopl e.
”Theodor eRoosev elt, (1900) .Tobe
effec tive,asoundet hic smustber ec ogni z edbyt opmanagementandr eflec tedi nt he
pol i
c i
esoft hef irm. Topmanagementshoul dest abl ishc learpol iciest hatenc our age
et hical behav iourandac or dial cult ur eoft heor gani zat ion. Managementmustassume
res ponsi bilityf ordi sc ipliningwr ongdoer s. Member sshoul dv olunt ar ilyac cepti t.Ri ght
l
eader shi p, int egr ity ,pr of icienc y, commi tmentt osoc ial valuesofamanagerc anc hange
theex pec t edbehav iorofi ndi vidual sandar ec ruc i
al tobusi nesset hi csand
or ganiz ational c ultur e. Goodet hi csmaybegoodbusi nessi nmaj or ityoft hec ases. When
thec runc hc omes, whenet hicsc onf li
c t
swi tht hef irm’ si nt erest s ,anyet hic spr ogr am
thathasnotal r eadyf ac edupt ot hispossi bilityisdoomedt of ailbec ausei twi llunder cut
ther ational eoft hepr ogr ami tsel f.Inbusi ness, asi nal lot herhumanendeav our s, we
mustbepr epar edt opayt hec ost sofet hic albehav ior .Soal soi nt hec or por at esoc ial
andet hi cal pr ac tic es, asi mi l
ardangeroc c ur swi thc or por ationsc hoosi ngorbei ng
wooedt obeenv ironment allyfriendl ybec ausei twi llbei nt hei rsel f-int er est . Ther eist he
riskofpar t i
c ipat ingi nt hemov ementf ort hewr ongr easons. Thef r equentst rategyof
thenewenv i
r onment al i
st si sabusi nesst ohel psol veenv i
r onment al pr obl emsbyf i
nding
pur eorv ir tual lyc ost lessway sf ort hemt opar ti
c ipat e. Theyf eel t hatc ompr omi se, not
conf ront at ion, ist heonl ywayt os av et heear th.

BUSI
NESSETHI
CSANDCORPORATESOCI
ALRESPONSI
BILI
TY

Businessethic
scanbedefi
nedaswr i
ttenandunwri
ttenc odesofpri
nci
plesandv
alues
thatgover
ndec i
si
onsandactionswithi
nac ompany
.Int hebusinesswor
ld,the
organi
zati
on’scul
tur
esetsstandardsfordeter
mini
ngt hediff
erencebet
weengoodand
baddec i
si
on-makingbehav i
our.I
nt hemostbasi cterms,adef i
nit
ionforbusinessethic
s
boil
sdownt oknowingt hediff
erencebet weenr i
ghtandwr ongandc hoosingtodowhat
i
sr ight.Thephrase‘ businessethic
s’ canbeusedt odesc r
ibetheac t
ionsofindivi
duals
withinanor gani
zation,aswel lastheor ganizat
ionasawhol e.Therearet wosc hool
sof
thoughtr egardi
nghowc ompaniesshouldappr oachadef i
nit
ionforbusinessethics:
the
shar ehol
derperspec ti
veandt hest akeholderperspect
ive.

Shar eholderPer spect i

v eThosewhoappr oac het hical dec isionmaki ngf roma
shareholderper spec tivefocusonmaki ngdec i
sionst hatar ei ntheowner s’ bestinterest
.
Dec i
sionsar egui dedbyaneedt omax imizer etur noni nv estmentf ort heor ganizati
on’s
shareholder s.Individualswhoappr oachet hi csfromt hisper spec tivef eelthatet hical
bus i
nesspr ac ticesar eonest hatmaket hemostmoney .
Stakehol derPer spect i
v eThephr asec orpor atesoc ial responsi bi
lityisof tenofal l
affectedpar tiesusedi ndi scussionsofbusi nesset hics .Thei deabehi ndt hisc onceptis
thebel i
efthatc ompani esshoul dc onsi
dert heneedsandi nterestsofmul tiple
stakeholdergr oups, notj ustthosewi t
hadi rectf i
nanc ial stakei ntheor gani zati
on’s
profitsandl osses. St akeholdersmayi ncludeempl oyees, suppl i
ers ,cust omer s ,
compet it
or s,gov ernmentagenc ies,thenewsmedi a,c ommuni tyr esident sandot hers.
Thei deabehi ndst akehol derbasedet hical dec i
sion-maki ngi st omakesoundbusi ness
dec i
sionsthatwor kfort hegood.