Corporate Social Responsibility:
A Review
Brenda Gainer
Schulich School of Business
York University
Agenda
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Definitions of CSR
The Scope of CSR
Perspectives and Theories
CSR and the State
CSR and the Nonprofit Sector (Civil Society)
Current Opportunities and Challenges
CSR: Definitions
• Basic elements are:
– A commitment to specific actions
– Discretionary action that goes beyond the
requirements of law or corporate governance
– Goal directed behaviour that results in social
and/or community benefit
– The value created goes beyond the economic
interests of the firm
Early definitions and critiques
• “The firm’s consideration of, and response to,
issues beyond the narrow economic, technical
and legal requirements of the firm to
accomplish social benefits along with the
traditional economic gains which the firm
seeks”
– (David, 1973, Journal of the Academy of Management)
• Milton Friedman argued that CSR is actually a “theft”
of shareholder-owned resources
Stakeholder Theory
• CSR is “…a behavior that is alleged by a
stakeholder to be expected by society or
morally required and is therefore justifiably
demanded of a business.”
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(Whetten et al, 2002).
• “A concept whereby companies integrate
social and environmental concerns in their
business operations and in their interactions
with their stakeholders on a voluntary basis.”
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(European Commisision, 2005
The Scope of CSR
Examples:
• -support of charitable and educational organizations
• -transparency in reporting
• -policy based initiatives
• hiring and training of hard-core unemployed-support of charitable
and educational organizations
• -hiring and training of hard-core unemployed
• -non-discrimination in employment
• -improved workplace safety
• -pensions and benefits
• -development of green technologies
• -use of non-animal testing processes
• -increased consumer protection
“The Business Case” for CSR
• Economic responsibility theory
• “Doing well by doing good”
• A responsible element of strategic
management designed to improve a firm’s
financial performance
Stakeholder Theory Perspective
• Ethical responsibility theory
• Stakeholders are those who affect or are
affected by a firm’s actions
• Stakeholders have legitimate rights
• A firm has a moral duty to respect those rights
Corporate Citizenship Perspective
• Rooted in political theory of the firm
• Views corporations as citizens who have a
duty towards all other citizens in a society
• Corporations are therefore compelled to
participate in creating the common good of
society (beyond their individual interests)
“Blurring the Boundaries”
State
Business
Civil
Society
CSR and the State
State
Business
Civil
Society
CSR and the State
• CSR depends on differences in government
regimes with respect to social entitlements,
regulation, etc
• Traditional relationship was encouragement of
corporate philanthropy as an economic
substitute for shrinking government funds
• Current relationship is complementary in
terms of policy initiatives
CSR, the State and Civil Society
State
Business
Civil
Society
Relationships between the
Corporate and Third Sectors
• Moral imperative: altruistic relationship
• The business case: buyer-seller relationships
• The efficiency of business management:
partnership and joint ventures
• Preference for market mechanisms: social
enterprise and impact investing
Changes in the Corporate-Third Sector
Relationship
• Altruism persists
• Trust has eroded
• The values of business management and the
market are being applied to social value
creation
• Unclear what the long-term effect will be on
the values and scope of civil society
Opportunities and Challenges in
Contemporary CSR
• Increased sales and market share through
cause related marketing
• Brand building through sponsorships
• Improved corporate image through
philanthropy
• Employee engagement through internal
volunteering and giving programs
The Main Challenge for the Future:
WHO BENEFITS?
And how do we ensure benefits
for all?