Corporate Social Responsibility


Defining Corporate Social Responsibility

Organizations that combine human energy and resources to produce economic benefits possess significant social influence.[i] With the rise of large corporations in the US and Europe since the 1950s, the need for corporate social responsibility (CSR) arose. Pressure on businesses to be socially responsible has been around for many years, but has gained momentum in the latter half of the 20th century. In 1953, Howard Bowen, who some consider the father of CSR, wrote Social Responsibilities of the Businessman, in which he questioned the responsibility businesses owed to society as a result of making money, arguing businessmen are responsible for the consequences of their actions. This kick started the modern era of CSR and the concept has been growing and changing since. Forward to 2003, Carroll and Buckholt[ii] wrote that CSR means that an organization must have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law. Carroll later stated that CSR is ‘‘an eclectic field with loose boundaries, multiple memberships, and differing training/perspectives” implying the broad array of theories and approaches that CSR is given.”[iii]

When the concept was first developed businesses were left to their own devices to determine whether or not a focus on CSR was essential to enhance their best business practices. Today the concept has grown to include environmental and labour standards along with a growing demand for transparency and ethical standards that are to be applied under a framework of sustainable growth [iv]. Philanthropy was included as a fourth stage in Carroll’s pyramid of CSR,after economic, legal and ethical responsibilities. When the European Commission developed their concept of CSR, philanthropy was removed and replaced with sustainable development[v].

Today theorists argue “…businesses have a social contract with the public, which requires that businesses act not just to maximize profits but to benefit their constituents, the consumers”[vi].

In the past, there have been critics such as Milton Friedman who argued that a company’s sole responsibility was to provide value to its shareholders. In 1962 he stated “the social responsibility of business is to increase profit.” The sentiment among many was that CSR ran contrary to the interest of the company and by extension to the shareholders. More recently companies have been swayed by public opinion to come to the terms that CSR is necessary and can be beneficial to the companies, its bottom line and the community.[vii]

Corporate Social Responsibility Reporting

One of the ways businesses meet the needs of the public and prove that CSR is on their agenda is through Corporate social responsibility (CSR) reporting which typically, has been limited to financial/economic accountability; however it has recently been expanded to include sustainability – both environmentally and socially. CSR reporting can be mandatory, solicited or voluntary. Mandatory reporting is primarily related to protecting the public and ensuring appropriate information is available, whereas solicited reporting seeks input from stakeholders to ensure the information published is useful and relevant to them. Voluntary reporting, the most widely used, is often used by companies to portray their organizations in a favourable light by only reporting positive outcomes. This voluntary reporting has drawn criticism and skepticism from the public which has resulted in a push to develop guidelines and standards for CSR reporting[viii].

Public Relations Role in CSR

There is some sentiment that CSR practices that businesses practice, such as reporting, is nothing more than a PR invention that serves corporations and delivers little substance to society at large. Peter Frankental argues that the governance of companies protects the shareholders and not the stakeholder at large. [ix] Some accuse PR of green washing an organization to appear more ethical in their business practices.

Meanwhile research from Ash Prasad, Australian School of Business, theorizes that for business to be ethical, CSR and corporate marketing must include multiple perspectives, particularly marginalised stakeholders. “In other words, corporations will need to surrender some of their power to their external stakeholders for CSR to be consequential and effective and not consolidate their authority by using marketing to engender a false consciousness of ideology”.[x]
What is clear is that more businesses are recognizing the importance of CSR to the modern consumer and the value it adds to their business. Businesses have to make money, it is after all their primary goal, but they also have to consider their effect on society and the environment. And most importantly they have to consider their customer because “Quite simply, companies care about CSR because their customers do.”[xi]

[i] Epstein, E. (2006) The “Good Company,” Rhetoric or Reality? Corporate Social Responsibility and Business Ethics Redux. University of California, Berkley.

[ii][ii]Carroll, A.B., and A.K. Buchholtz. (2003) Business and Society: Ethics and Stakeholder Management. 5th ed. Australia: Thomson South-Western.

[iii] Carroll, A. B. (1994). ‘Social Issues in Management Research’, Business and Society 33(1), 5–25.

[iv] van Marrewijk, M. (2003) Concepts and definitions of CSR and corporate sustainability: Between agency ...
Journal of Business Ethics, May 2003; 44, 2/3; pg. 95

[v] European Commission. (2011) Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions, A renewed EU Strategy 2011-2014 for Corporate Social Responsibility. Brussells.

[vi]Cunningham, A. (1999). Responsible advertisers: A contractualist approach to ethical power. Journal of Mass Media Ethics, 14(2), p.89


[viii]Golob, U. & Bartlett, J. (2007). Communicating about corporate social responsibility: A comparative study of CSR reporting in Australia and Slovenia. Public Relations Review, 33, 1-7.

[ix] Frankental, P. (2001) Corporate Communications: An International Journal. 6(1), 18-23.