Definitions of CSR

 Buchhloz (1991) identified 5 key elements found in

most, if not all definitions.
1. Corporations have responsibilities that go beyond
the production of goods and services at a profit.
2. These responsibilities involve helping to solve
important social problems, especially those they
have helped to create.
3. Corporations have a broader constituency than
stockholders alone.
4. Corporations have impacts that go beyond simple
market place transactions.
5. Corporations serve a wider range of human values
than can be captured by a sole focus on economic
values.
 Definitions of CSR
 According to Wood (1991), “ the basic idea
of CSR is that business and society are
interwoven rather than distinct entities.”
Expectations are placed on business due to its
three roles: as an institution in society, as a
particular corporation or organisation in
society, and as individual managers who
are moral actors within the corporation.
These roles result in three levels of
analysis institutional, organisational and
individual; expressed in terms of 3
principles of CSR: Legitimacy, Public
responsibility and managerial discretion.
 Definitions of CSR
Bowen (1953): “Industry has an obligation
to pursue those policies, to make those
decisions, or to follow those lines of actions
which are desirable in terms of the
objectives and values of the society.”
CSR emphasises: a) Businesses exist at the
pleasure of society and that their behaviour
and methods of operation must fall within
the guidelines set by the society, and
b) Business act as moral agents within the
society.
 The Social Responsibility Debate
 Arguments FOR CSR –
1. Business should operate in such a way as to fulfill
the public needs/ expectations. Acceptance of
society is a MUST).
2. A social responsibility role should be undertaken in
order to prevent some public criticism and
discourage further govt involvement/ regulation.
3. Business must realise that the society also is a
“system” of which corporations are a part, and that
the system is inter dependent.( Need to mutual
involvements among individuals, groups, and
organisations in society, or among sub sectors of
society. Business is vulnerable to the actions or
events that occur in other sub sections ).
 The Social Responsibility Debate
4. Social responsibility is in stockholders’ interest,
as it brings profitability especially in long term.
5. A poor social responsibility role on the part of a
corporation means poor management to some
investors. They view failure in field of CSR much
the same as failure in financial matters.
6.Business must realise that social problems can
become opportunities, or can lead to profits.
Effluent treatment may lead to recovery of
gainful material from , otherwise waste.
7. With regard to CSR, a business must take long
term view against the short term view.
 The Social Responsibility Debate
8. Business must be concerned with public
image and the resultant goodwill resulting
out of CSR.
9. Every business should seek an opportunity
to solve some social problems. As Govt
remedial actions in social responsibility
areas take inordinately long time, same
work by a business is done at faster time, at
a cheaper rate, and more often than not,
Govt offers subsidies/ benefits.
10. Preventing a social disorder is better than
cure, and hence, a proactive action by
business is better policy.
11. An owner of business is also an icon for
the society, whom people look for guidance.
It is not appropriate for such leaders of
society to ignore social matters.
 The Social Responsibility Debate
 Arguments AGAINST CSR –
1. Friedman (1970) said that the corporations
are economic institutions, and the
successful functioning of the society
depends on the role specialisation of its
institutions ( or systems). He sees only one
responsibility of a business enterprise; and
that is making profit for the stock holders.
2. Profit maximisation is the prime purpose of
the business. A socially active company ,
making losses , will not survive at all.
3. Corporations are responsible to the share
holders and in fact have no authority to
operate in the social areas.
 The Social Responsibility Debate
4. Social policy is the jurisdiction of the
government and not the business.
5. Business lacks training in social issues and lacks
social skills to carry out social programmes.
6. CSR is seen by many, as an excuse to increase
its power. Business already has sufficient power
and by allotting CSR, it may give undue power to
them.
7. Business involvement in CSR not only adds
costs to the organisation, but also may increase
social costs.
8. There is yet no acknowledged source of reliable
guidance or policy for business in CSR questions.
 The Social Responsibility Debate
9. As institutions in society, business
corporations cannot be held
responsible for their actions in a way
sufficient to satisfy demands for
social involvement. It should be left
to NGOs and the Govt machinery.
10.There is a divided support in the
business community for social
involvement, and as a result there is
unlikely to be a very satisfactory
treatment of social issues by
business.
Alternate Theory Description
view of
the Corp.
AMORAL Fundamentalis The corporation has no or
m very little CSR.
Legal The corpn. Is an autonomous
Recognition entity and not a society
creation.
Functionalism Groups in society should not
encroach upon each other’
provinces of behaviour.
Individual Corpns. Can be socially
Agreement responsible but only within
the limits of a prior
contractual agreement with
stock holders.
 Alternate Theory Description
view of the
Corp.
AMORAL Traditional stock Beyond individual agreements,
holders’ model corpns. Are not ethically required
to be socially responsible but to
make profit.

Role Based The role of corporation determines

Approach its responsibilities.

PERSONAL Moral Person/ Corpns. Are collectives that act as

Moral Agents individuals; they exist as legal
persons and can be held
responsible.

SOCIAL Social Contract An implicit social agreement does

exist between society and a co.,
determining its social nature,
duties and rights.
Alternate view of Theory Description
the Corp.

IDEOLOGICAL/ Society evolves and history gives rise to

HISTORICAL new social needs, social demands, and
changes in social values to which
business is expected to contribute.

Stakeholder There is a social responsibility function

of the interrelationships developed by
the corporation with groups that have a
stake. (Constituency Theory).

Legal Creator A Corpn. Is a creature of law, existing

in contemplation of law, and is thus
made by society for the common good
of society..

Social Permission Society can legitimately demand the

Corpn. To do certain kind of activities,
and if a corpn. Is harming the public
good , can restrict/ eliminate it.
Alternate view Theory Description
of the Corp.