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The fundamental idea of corporate social responsibility (CSR) ”is that business and society are interwoven rather than distinct entities and that business must therefore meet particular societal expectations regarding their social, environmental, and economic activities (Wood 1991: 695). The concept refers to the discourses, practices, policy initiatives, and disciplines that shape these societal expectations, as well as internal value systems, voluntary practices of corporations, and legal requirements pertaining to those activities.
While modern conceptions of the term have appeared since the mid-to-late twentieth century, the general idea is not new. Original legal formulations placed restrictions on corporate activities and allowed corporate charters to be revoked when they ”failed to act in the public good (Banerjee 2008: 53). However, by the end of the 1800s, major restrictions on corporations were removed and their primary legal obligation became maximizing financial returns for shareholders.
The demand for modern conceptions of CSR has been driven by social movement groups, ethical consumers, and socially responsible investors (and corporations themselves). However, there has been little agreement among groups about the content areas (e.g. environment, labor practices, community relations, and human rights), standards, and governance of social responsibility. While the business community has generally sought voluntary (i.e. self-regulated) mechanisms, most social movement groups have advocated at least some level of legally-binding structures. Nonetheless, nearly all corporate practices of CSR to date (especially in the USA) have materialized through voluntary social reporting and codes of conduct.
While proponents see voluntary efforts as important steps in orienting corporations to the public good, critical perspectives emphasize voluntary CSR initiatives as an organized strategy by corporations to preempt stricter laws and regulations. Critical perspectives argue that if corporations only legal responsibility is to make profits, it is impossible for them to adopt socially responsible practices.
- Banerjee, S. (2008) Corporate social responsibility: the good, the bad, and the ugly. Critical Sociology 34 (1): 51—79.
- Wood, D. (1991) Corporate social performance revisited. Academy of Management Review 16 (4): 691—718.