Positioning Stakeholder Theory Within the Debate on Corporate Social Responsibility

Topics: Corporate social responsibility, Social responsibility, Business ethics Pages: 33 (11526 words) Published: November 3, 2010
EJBO Electronic Journal of Business Ethics and Organization Studies

Vol. 12, No. 1 (2007)

Positioning Stakeholder Theory within the Debate on Corporate Social Responsibility Manuel Castelo Branco Lúcia Lima Rodrigues

The present-day conception of corporate social responsibility (CSR) implies that companies voluntarily integrate social and environmental concerns in their operations and interaction with stakeholders. The European Commission defines it as “a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.” (European Commission, 2001, p. 5) It is related to complex issues such as environmental protection, human resources management, health and safety at work, relations with local communities, relations with suppliers and consumers. The notion of CSR is one of ethical and moral issues surrounding corporate decision making and behaviour. Knowing if a company should undertake certain activities or refrain from doing so because they are beneficial or harmful to society is a central question. Social issues deserve moral consideration of their own and should lead managers to consider the social impacts of corporate activities in decision making. Regardless of any stakeholders’ pressures, actions which lead to things such as the conservation of the Earth’s natural resources or bio-diversity preservation, are morally praiseworthy. However, some argue that the contribution of concepts such as CSR is just a reminder that the search for profit should be constrained by social considerations (Valor, 2005, p. 199). Increasingly CSR is analysed as a source of competitive advantage and not as an end in itself (Branco and Rodrigues, 2006). In effect, the concept of CSR has evolved from being regarded as detrimental to a company’s profitability, to being considered as somehow benefiting the company as a whole, at least in the long run (see, for example, Hess et al., 2002; Porter and Kramer, 2002; Smith, 2003). CSR has been conceptualised in a number of different ways which are related clearly to differing views regarding the role of business in society (see, for example, Clarke, 1998; Lantos, 2001). These views are often presented within the stakeholder-shareholder debate. The idea which underlies the “shareholder

Companies engage in corporate social responsibility (CSR) mainly because they can reap some kind of benefits from such engagement. It is thus necessary to have a CSR notion which is able to address this important feature. The differing views regarding the role of business in society are often presented as being placed within the stakeholdershareholder debate. This article tries to show that a useful notion of CSR should be based on a stakeholder view and should be capable of addressing both its normative and instrumental aspects. Companies are seen as having an obligation to consider society’s long-run needs and wants, which implies that they engage in activities that promote benefits for society and minimize the negative effects of their actions, so long as the company is not prejudiced by engaging in such activities.

Corporate social responsibility; shareholder perspective; stakeholder perspective

perspective” is that the only responsibility of managers is to serve the interests of shareholders in the best possible way, using corporate resources to increase the wealth of the latter by seeking profits (see, for example, Friedman, 1998; Jensen, 2001). In contrast, the “stakeholder perspective” suggests that besides shareholders, other groups or constituents are affected by a company’s activities (such as employees or the local community), and have to be considered in managers’ decisions, possibly equally with shareholders (see, for example, Freeman, 1998; Werhane and Freeman, 1999). The purpose of this article is to give an account of the concept of CSR and its evolution, based on the notion that nowadays companies engage in CSR because...

References: Vol. 12, No. 1 (2007)
Lantos, G
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