Académique Documents
Professionnel Documents
Culture Documents
Chapter 5
Corporate Social
Responsibility
This chapter:
Defines the idea of corporate social
responsibility and explains how it has expanded
in meaning and practice over time.
Explains more about how corporations carry out
their social responsibilities.
5-2
Corporate
social
responsibility
The duty of a
corporation to
create wealth in
ways that avoid
harm to, protect,
or enhance
societal assets.
5-4
Social Responsibility in
Classical Economic Theory
Throughout American history, classical capitalism
has been the basic inspiration for business.
In this view, a business is socially responsible if it
maximizes profits while operating within the law.
The idea that markets harness low motives and
work them into social progress has always
attracted skeptics.
Today the classical ideology still commands the
economic landscape, but ethical theories of
broader responsibility have worn down its
prominences.
5-5
5-7
5-8
5-9
1950The Present
Contemporary understanding of corporate social
responsibility formed during this period.
Social Responsibilities of the Businessman
Dissenters to this theory were conservative
economists who claimed that business is most
responsible when it makes money efficiently, not
when it misapplies its energy to social projects.
1971 Bold statement by the Committee for
Economic Development outlining three concentric
circles of responsibilities.
1981 Statement on Corporate Responsibility from
the Business Roundtable.
5 - 10
5 - 11
5 - 12
5 - 13
Global CSR:
Codes of Conduct
Codes of conduct set forth aspirations, principles,
guidelines, and rules for corporate behavior.
Created by companies, trade associations, NGOs,
governments, and international organizations.
The target is the corporation
The codes effectiveness depends on how the
corporation carries it out.
Many codes are weak because they lack the force
of law
5 - 17
5 - 18
Global CSR:
Management Standards
Eco-Management and Audit Scheme
(EMAS)
International Standards Organization
(ISO)
5 - 20
Global CSR:
Social Investment and Lending
U.N. Principles for Responsible Investment require
signatories to consider a companys environmental,
social, and governance performance when they
invest.
FTSE4Good Global Index is intended to set the
world standard for investors seeking companies
that meet globally recognized corporate
responsibility standards.
International Finance Corporation (IFC) seeks to
promote development and reduce poverty by
funding projects for corporations.
5 - 21
5 - 23
Concluding Observations
Historically, corporations have been motivated
primarily by the central focus on profits.
Corporations are now being pressured to alter this
focus.
The idea of corporate social responsibility has
continuously expanded in meaning.
The power of stakeholders to define corporate
duty has increased.
The explosive growth of global trade and global
corporations has created new standards and
practices of social responsibility tied to global norms.
5 - 24