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Business Ethics
Corporate Social Responsibility
Definition
Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. History

A key relationship in the history of corporate social responsibility is the relative power between corporations and governments during particular economic periods.
Although only in common usage since the 1960s, CSR has its roots in the Industrial Revolution – the birth of ‘big industry’ meant social structures, communities and ways of life were completely re-shaped over a relatively short period of time.

In the late 18th century a Scottish philosopher and economist named Adam Smith wrote numerous articles on these subjects, his magnum opus being The Wealth of Nations in which he espoused the concepts of free trade and the free market on which the classic market economy was based.

Smith’s principles were borne out. By the early 19th Century, new technology saw jobs being created and living standards improved. Unchecked by regulation businesses flourished and industrialists in Europe and the USA amassed huge fortunes. However few of these wealthy new industrialists were concerned about the wellbeing of their employees, society or the environment. The appalling conditions under which people worked were documented in the novels of Charles Dickens and inspired radical theorists such as Karl Marx and Friedrich Engels to write about new concepts on labor, socialism and communism.

By the start of the 20th century, powerful corporations suffered a backlash against their widespread exploitation. Labour unions were formed, giving a voice to the workers, and governments began to assume more responsibility for welfare and infrastructure, gradually introducing anti-trust legislation.

In the 1950s, emerging ‘consumer power’ saw companies start taking a new interest in the social and human aspects of their markets – it was at about this time scientists and environmentalists started noticing some worrying changes to the environment.

The 1960s saw a shift in attitudes towards government and business. In 1962 Professor Milton Friedman, Nobel Prize-winning economist, published his controversial Capitalism and Freedom. In it he makes the case for economic freedom as a precondition for political freedom.

The 1980s and 1990s saw communism collapse, globalization emerge and the information revolution change the way the world did business. As globalization intensified, so did environmental awareness and the emergence of responsible business practice? Key developments include: the Brundtland Commission, the formation of the World Business Council for Sustainable Development, and the United Nations Global Compact. Why follow CSR?

Businesses embarking on new environmental programs and initiatives are typically driven by three main drivers: values, compliance or opportunity. * Values: “the right thing to do” refers to those businesses that seek to reduce their negative and enhance their positive sustainability impacts as a demonstration of their values. Businesses that show concern for reducing their environmental footprint and for generating positive community benefits earn a reputation as a good company with employees, customers, suppliers, investors and community members. * Compliance: “the thing you must do” focuses on reducing...
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