Background of Corporate Social Responsibility
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1.1 Evolution of csr: A Short History
“We believe that the leading global companies of 2020 will be those that provide goods and services and reach new customers in ways that address the world’s major challenges—including poverty, climate change, resource depletion, globalization, and demographic shifts.” Niall Fitzgerald, former ceo & Chairman, Unilever
Debates over the concept of csr span from the 1930s to the 21st century. A debate over the responsibilities of corporate managers and directors to their shareholders and other groups directly influenced by corporations took place in North America during the 1930s, marking one of the first significant discourses on csr.5 However, following this exchange, discussions over csr became dormant until the 1960s when a social debate over csr as part of that decade’s wider discussion of the corporation’s growing power in society and politics emerged. The concept of csr was also globally driven in the 1960s as a result of the growing sophistication of consumers. It must be pointed out that consumers still continue to play a significant role in the growth of csr since consumers and pressure groups, especially in Europe and North America but also increasingly in developing countries, are demanding more responsibility from companies. The advance of technology has empowered these groups to effectively pressure companies, (especially those with highprofile brands) and hold them accountable for their behaviour or actions. The growth of csr continued due to the environmental movement in the 1970s and the growing concerns about the social impacts of business in the 1990s, which stemmed from the boom of corporate takeovers during the 1980s. Nevertheless, the impact of globalization had a direct influence on the prominence of csr. The fall of the Berlin Wall in 1989 marked the modern era of globalization, because it brought into being a world economy that was increasingly integrated and capitalistic. Globalization is characterized by rapid economic integration across national borders, open access to markets, deregulation of cross-border economic activity, and the free flow of capital and advanced technology. Globalization has resulted in the expansion of international trade and foreign investment and in short-term capital flow following integration of financial markets. Globalization promises advanced economic welfare worldwide and increased economic opportunity and technology for developing countries. Globalization therefore raises questions on issues about the use of labour, concerns for environmental protection, the need to reduce poverty and the need for sustainable development. Dealing with these issues is a function of csr. In this context csr has evolved further, since it is seen as a tool for dealing with “the backlash against globalization”. Companies can work to strengthen ties with local communities through sustainable development programmes and corporate codes of conduct. By conveying clear values and principles, and accepting responsibility for workplaces and workplace conduct, companies can not only build trust and mutual understanding with stakeholders, they can also support the role of governments. It is hoped that this will help shift the debate on globalization from a negative to a positive one. With the intensification of globalization over the last 20 years, the world has witnessed a rapid rise of non-governmental organizations (ngos). Many of these ngos hold corporations accountable for their actions and often criticize them for concentrating on profit-making and not taking into account the social and environmental impacts of their operations. The corporate failures, scandals and wrongdoing that have come to light since late 2001 have also increased the global drive for csr. The abuses at Enron, Tyco, Global Crossing, Adelphia and WorldCom in the us, and at Ahold, Parmalat, Equitable...
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