A reflection on Corporate Social

Responsibility (CSR)

Institute of Management Sciences, Peshawar (IMSciences)

• What is the objective(s) of a
business organization ?
 The term
• Corporate Social Responsibility
• What is right / wrong dilemma
• Utilitarian and Non-utilitarian approach
 For now what is CSR??????

• A concept that’s deals with the “role of the

business in society”
 History of the construct
• Pre-formalisation of CSR construct

• Formalisation of CSR
 Pre-formalisation of CSR construct

Genealogy of these ideas and practices can be

related to
 Religious roots

Ancient Hinduism text ‘Vedic and Sutra’ and Buddhism text

‘Jatakas’ address ethical dimensions of charging excessive
interest
In Islam corporations are considers as group of individuals
responsible and answerable to God and their (organisational)
resources should be used for social good
The Bible explicitly condemns ‘charging of interest’, and emphasise on
‘sharing of wealth
 Industrial Revolution
• At the time of industrial revolution in the
Western Europe the concept of corporate
philanthropy emerged.

• welfare including better working condition,

better housing, reduce drunkenness and
recreation facilities at work place.
 Adam Smith (1776)
• If businesses are free to earn profit without any
restrictions, they would bring common good to
shareholders and society.
• Generally, Adam Smith is misread and it is
believed that he advocated ethics less economic
rationale of morality.
• However, with economic rational he also
emphasised on the ethics of mutual trust and
confidence during production and exchange of
goods and services (see for example Sen 2002).
 19th Century

• Ford Motor Company legal case in Michigan

(in the US)
 Formulisation of CSR
• Bowen (1953)
‘the obligations of businessmen to pursue those
policies, to make those decisions or to follow
those lines of action, which are desirable in terms
of the objectives, and values of our society’
(1953, p.6)

‘According to sanctioned rules of conduct’ and

emphasised that it is important that managers
should follow those principle of morality, which
are not covered by law (Bowen 1953, p.13).
 Case Against CSR-- Levitt (1958) Friedman
(1960)
• Use its resources for profit
• Engage in activities for profit
• Increase its profits
• Within rules of the game (1970)
 Case Against CSR (cont.)
• CSR money reduces shareholder profit
• Is it what stockholders want?
• Consumers paying for it
• Separation
– church/state
– corporate/state
CSR for us NOW
Carroll (1979,1991,1999,2004,2010)

Philanthropic

Ethical

Legal

Economic
Contemporary Stories on CSR
 Realities of Developing Countries
• Legal institutions
• Cognitive institutions
• Normative institutions
 CSR in Pakistan

Regulatory institution
Corruption, kickbacks, taxation, limited support, implementation

Cognitive Institution
Charity and philanthropy

Normative Institution
Media, NGOs, Educational institutional