Module 5: Theoretical Perspective of CSR

 

According to the traditional view of the corporation, it exists primarily to make profits. From this money-centered perspective, insofar as business ethics are important, they apply to moral dilemmas arising as the struggle for profit proceeds. Business Corporation is a legal entity created by law and assumes life till it is wound up legally. Hence it can be considered as eternal life derived out of law. While these corporations generate surplus called profit or by some other name, they are part of the economic system. The interlinkages with rest of the players with the business corporation is captured in management term, Corporate Social Responsibility.

 

The title corporate social responsibility has two meanings. First, it’s a general name for any theory of the corporation that emphasizes both the responsibility to make money and the responsibility to interact ethically with the surrounding community. Second, corporate social responsibility is also a specific conception of that responsibility to profit while playing a role in broader questions of community welfare.

 

The classifications of CSR theories was proposed by E. Garriga and D. Melé (2004) into four groups depending on the aspects of social reality they focus on:

1) Economic aspect (instrumental theories), in which the corporation is seen as only an instrument for wealth creation, and its social activities are only a means to achieve economic results;


2) Social power (political theories), which concern themselves with the power of corporations in society and a responsible use of this power in the political arena;


3) Social integration (integrative theories), in which the corporation is focused on the satisfaction of social demands and


4) Moral values (ethical theories) based on ethical responsibilities of corporations to society.

Each group of theories provides a specific approach to considering CSR. In practice, each CSR theory presents four dimensions related to profits, political performance, social demands and ethical values. Garriga and Mele (2004) evaluated all CSR theories from instrumental to descriptive and found that CSR theories have paid attention to CSR activities’ social impact. However, some CSR theories present more attention to long-term economic instead of social impact. CSR’s purpose can be achieved through instrumental, political, integrative, and ethical approaches.



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