CSR and Globalization: Radical Changes in the Conception and Implementation of CSR

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CSR and globalization

Corporate social responsibility is at least in its name and formal recognition a relatively recent phenomenon. Yet, owners and managers of firms have engaged in activities that we would now consider CSR almost from the beginning of the industrial revolution (Davis, Whitman and Zald, 2006). But, until the 1990s, CSR was generally limited to corporate philanthropy. It is from the early 1990s that enlarged concepts and practices of CSR have come to the fore. What drove these radical changes in the conception and implementation of CSR?

Scherer and Palazzo (2007) claim that, in a globalized world, it is necessary a shift toward a new politically enlarged concept of CSR. In fact, globalization is weakening the power of (national) political authorities to regulate the activities of corporations that globally expand their operations: for instance, globalization forces national governments into a race to the bottom in order to win the competition with other countries for attracting corporate investments. Thus, they reason that corporations should be understood as both economic and political actors. Davis, Whitman and Zald (2006) claim that, in addition to weak national boundaries that separate domestic from foreign companies, another crucial difference of the global competitive environment of the 21st century is the weak distinction between activities and transactions occurring inside as opposed to outside a corporate entity: while companies are moving part of their operations from the status of in-house activities to purchased goods and services, they are at the same time forming a variety of close relationships with suppliers and partners. This, together with the politicization of civil society in response to the smaller influence of national governments, has led to an important change in CSR practice: while CSR largely arose out of commitments by companies to their employees and to communities where they were located, now corporations are...
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