Outline the key criticism of CSR and how they differ across different political and economic spectrum
The field of corporate social responsibility (CSR) has now been embraced globally by all the modern entities of the globe. Advocates of the field argue that corporations that are perceived by society as being socially responsible are likely to derive enormous benefits from being so. They argue that most stakeholders whether primary or secondary, internal or external, local or national offer their support of the actions of these socially responsible corporations.
Most would agree that corporate responsibility is an excellent idea, but from where did the ideology of CSR originate? An examination of the literature has given no conclusive evidence as to whether CSR is a capitalists’ or socialists’ doctrine; in fact the literature is silent in this respect. However, after examining the activities that stem from the ideology and considering the presence of the word ‘social’ in its very name one may conclude that CSR is a socialist doctrine.
If CSR is indeed a socialist doctrine, why are corporate entities in modren free capitalist economies preaching and practicing it? Why are multinational corporations from these capitalists’ states now following the ideology throughout the world? Indeed, it is generally believed that socialist ideologies are inconsistent with capitalists’ ideologies. These are some of the issues that this study will explore in depth in order to establish the origins of CSR practiced by capitalist corporations and by certain socialist and communist states in the 21st century.
Peter Utting (2005) notes that an increasing number of transnational corporations (TNCs) and large domestic companies, supported by business and industry associations, are adopting a variety of so-called voluntary CSR initiatives and the same includes codes of conduct, measures to improve environmental management systems and occupational health and safety, company ‘triple bottom line’ reporting on financial, social, and environmental aspects; participation in certification and labeling schemes, dialogue with stakeholders and partnerships with NGOs and UN agencies; and increased support for community development projects and programmers’. The revival of CSR is reflected also in its recent prominence in public debate. Carroll and Buchholtz (2003) argue that the social responsibility of a business organization is four fold and can be expressed either as a pyramid or in terms of an equation. When expressed as an equation, it is the sum total of four different responsibilities, which are Economic responsibility (ECR) (which is to make a profit), Legal responsibility (LGR) (to obey the law), Ethical responsibility (ETR) (to do what is right, fair and just at all times) and Philanthropic responsibility (PHR) (to be a good corporate citizen).
CSR had been much debated areas for the last two decades, different regimes of the world perceive the concept according to their societal norms, cultural notion and other related aspects. Capitalism and democracy can successfully coexist in the long run only if the economic actors become mature enough to police themselves in the way they conduct business, in exchange for freedom of market and reduced regulation. In a democracy the people entrust a government to defend their individual freedom & rights and their interests as a society or nation, and to preserve a social order in a long term perspective. Capitalism is based on the inalienable right to ownership and profit, and on the principle of a free market. Conflict between capitalism and democracy occur when the exercise of freedom jeopardizes the rights and interests of the people and the interests of society at large.
In the past 30 years, many economists and management theorists have pushed the concept of freedom of enterprise and free market to a point where any...