Corporate Social Responsibility: History and Development

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Throughout history corporations have been able to generate an abundance of wealth for its stock holders. Since the inception of the first modern corporation the idea of giving back to society has been an issue. Corporate Social Responsibility began as a form of paternalistic philanthropy in the early 18th century and by the early 20th century has developed into necessary year round contributions. This paper traces CSR through the 18th, 19th, 20th, and 21st centuries, and also includes are major historical landmarks in the development of the corporation. It is virtually impossible to speak of the development of the modern CSR movement and not discuss the development of the corporation, because the development of the corporation was instrumental in the development of the modern CSR movement.

Early CSR consisted of paternalistic philanthropy. After the industrial revolution it manifested in the form of employers providing utopian communities, consisting of housing, libraries, churches, parks, and hospitals, for their employees and their families. During the pre modern CSR movement the government was the primary force in mandating and enforcing socially responsible behavior by corporations. Legislation that protected corporate stakeholders was the foundation of the pre modern CSR. Then in the modern CSR movement the primary proponent of CSR became mainstream society, and the new foundation of CSR became the citizen. People formed coalitions were able to bring some of the country's largest corporations to the bargaining table. The change from governmental to stakeholder governance and stakeholder enforcement of corporate accountability ushered in modern CSR. Increased corporate governance, increased awareness in corporate wrong doing, more apparent effects on the environment, and corporate desires to be good citizens, have been the defining factors of modern CSR.

At the dawn of human civilization, the impact of economic activity on the environment became an important issue. Thousands of years ago humans began to clear land by fire, which lead to deforestation and soil erosion causing the decline of many ancient cities. By the height of the Greek and Roman empires pollution, public health and waste became concerns. During and after industrialization concerns about local environments developed into concerns about our national and even a global society and environment. During the last century, the rise in multinational corporations and their actions are not at the center of discussions about the well being of the environment and society at large. During the 20th century this concern developed into modern Corporate Social Responsibility. Also during the last century, we have witnessed the rise of global companies, and individual companies and their actions now feature prominently in discussions about the environment. Corporate Social Responsibility, CSR, has been a highly discussed topic, since the inception of the first English joint stock company in the 16th century. It has increasingly questioned corporation's responsibility to and relationship with the environment, government, employees, and other stakeholders. CSR today is far more complex than its early philanthropic beginnings. Beginning in the late 12th century CSR solely consisted of monetary donations or public works projects such as parks, libraries, etc… at the end of each fiscal year. Now more than ever corporations are under tremendous pressure to give year round, be environmentally friendly, and provide all stakeholders with ample benefits. Furthermore a corporation's value and reputation depends not only on the quality, price, and uniqueness of their products, but also their interactions with employees, suppliers, contractors, the community and the environment. In the late 19th and early 20th century two very different views about CSR developed. On one side managers see it as a sound business practice that creates opportunities to improve competitiveness...
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