Chapter 2 Thesis Example

Topics: Social responsibility, Business, Corporate social responsibility Pages: 6 (1788 words) Published: March 14, 2013
Chapter 2
Literature Review
            This chapter presents a brief history regarding social responsibility. Moreover, the nature of corporate and small business social responsibility will be discussed, as well as the advantages and disadvantages behind socially responsible activities.   Brief History

            Corporate social responsibility is primarily a twentieth-century invention, though its ancient and venerable roots can be traced easily to Biblical sources. The concept is evident, for example, in Deuteronomy 24:10-13 and 25:13-16. The twentieth century has seen an unprecedented growth in the size, importance, and power of the corporation. Moreover, corporations have proven to be extremely efficient at producing goods and services. It is then this success of the corporation that has necessitated the development of the idea of CSR or Corporate Social Responsibility (Krausz; Pava, 1995). Corporate Social Responsibility

            Business social responsibility refers to the obligation of businessmen to pursue those policies, to make those decisions, or to follow those lines of action, which are desirable in terms of objectives, and values of our society (Anderson, 1989).             There are four theories behind social responsibility and these are classical, stakeholder, social demandingness, and social activist theories. (Karake-Shalhoub, 1999).  Classical theory is grounded on classical economic theory. This theory states that business executives are said to be primarily responsible to the shareholders of the corporation, and their primary goal is to promote efficiency and to secure effective economic performance.  It also states that managers are said to be responsible to respond to the shareholders' demands.  On the other hand, the stakeholder theory assumes that corporate executives are responsible to stockholders but also insists that there are other groups directly affected by the conduct of the firm, such as employees, consumers, creditors, etc.  Still, social demandingness theory states that corporations have a responsibility to protect and to promote certain interests of the general public, and social activist theory states that corporate managers should sometimes strive to undertake projects that advance the interests of the public, even when these undertakings are neither expected nor demanded by them.                 In line with this, theorists have, in general, identified four broad areas of corporate responsibility, which are economic, legal, moral, and discretionary responsibilities.  Economic refers to the maximization of profits; legal refers to the legitimacy of the operation; moral refers to the setting of moral and ethical standards; and discretionary responsibilities refer to philanthropic giving.             Much of the emphasis on being socially responsible is borne by big business and selected industries. Big business is highly visible due to having a well-known name, national advertising and distribution, and multiple products.  As such, it is more often in the critical eye of the public. On the other hand, selected industries, such as manufacturing firms and power companies, are readily visible because of their air, water, and chemical pollution problems.             The concept of doing good to doing better in the area of social responsibility simply means that social responsibility is and should be handled as a corporate investment that will result in a long-run corporate profit and not a corporate expense.  Consequently, as long as business firms are not public property, corporate responsibility rests with those who are legally and morally responsible and accountable for the firm, and those are the directors, the managers, and the owners (Manley; Shrode, 1990). In this regard, some research studies indicate that there is no difference in ethical/social responsibility values by managerial level, whereas other studies claim just the opposite. Still other research studies claim...
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