HISTORICAL PHASES OF CORPORATE SOCIAL RESPONSIBILITY

 Phase 1: Profit Maximizing Management (1800 to early 1900s)

Characteristics:
 Management must maximize profit.
 Individual drive for profit maximization would ultimately create wealth for the nation.
 Business systems as profit maximizers are used as tools for the elimination of economic
scarcity.
 Businesses ignored unsafe working conditions, paid starvation wages and used child labor in
order to maximize profit.
 Problems of cultural minorities, unsafe products, unfair advertising and urban poor
problems were given little if no attention at all.
 Abuses of capitalism were extremely rampant and the government tolerated these
deplorable business practices.

 Phase 2: Trusteeship Management (Early 1900s)

Characteristics:
 Management was considered both as an instrument of stockholders and as trustee for all
groups who contribute to the business enterprise.
 Aside from profit maximization, management's concern was also to maintain a fair balance
in the interests of employees, customers, creditors, stockholders and the community.

 Phase 3: Quality of Life Management (1900)

Characteristics:
 Security of basic goods and services was no longer a principal problem.
 Social and economic problems brought about by economic growth expanded the concept of
social responsibility of management.
 Society demanded management's active participation in helping solve social and
environmental problems in view of the vast resources (funds, manpower, materials,
management skills and technology) of businesses.
 Business is expected to contribute to the improvement of quality of life, which involves
cultural, social, educational, political factors and economic society.
 Society is unstable if the quality of people is poor. Business contribute for a good quality of
life and society.
 A prosperous society is the best environment for a business to thrive in. Businesses will
benefit from its self-investment in society.

PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY

 CLASSICAL VIEW
 The primary responsibility of business is profit maximization.
 Obligation of management is to satisfy stockholders for their investments.

 MANAGERIAL VIEW
 Does not emphasize profit maximization and interests of stockholders.
 To balance the interests of employees, customers, suppliers and the local plant
community is the role of managers of big businesses.

 PUBLIC VIEW
 Includes the needs and interest of the whole society in contrast with the classical and
management views.
 Establishes harmony with both business operations and public interest.
 CHRISTIAN VIEW
 Excess wealth should be given to the less fortunate.
 A successful corporation should perform its social responsibility more by returning a fair
portion of its profit to the people in the form of social services.