Econ Report

Corporate Social Responsibility (CSR)

Corporate social responsibility is an umbrella term used to describe voluntary corporate initiatives concerned with community development, the environment and human rights. CSR policies and programs seek to benefit society while simultaneously improving a corporation’s public image and profitability. The term is often criticized for simply being a public relations buzzword. The definition of CC is not clear in the literature. In a recent paper, Matten and colleagues40 explain that three visions underlie the label “corporate citizenship”: “a limited view” that equates CC with philanthropy or community involvement; “the equivalent view” that equates CC with CSR; and “the extended view,” according to which CC implies “a reconceptualization of business–society relations.” It is the meaning conveyed in citizenship that makes this term more desirable. It clarifies its content, because it is easy for companies to derive what society demands, from the shared portrayal of the “individual good citizen.” However, evidence shows that managers are still confused about what “corporate citizenship” means. In addition, “corporate citizenship” emphasizes the idea that corporations have rights and duties. However, because these rights are not equal to those of a “real” citizen, some authors argue that CC is a “fictional concept.”Yet, the aim of CC is to highlight that firms are “public powerful actors, which have a responsibility to respect those real citizens’ rights in society”, this will eventually lead companies to take over those “unserved governmental functions that were the result of a cutback in social rights two decades ago, but also protecting civil and political rights.” Again, it is difficult to find in the literature any evidence backing the posited effects on corporate behavior that would derive from this new theoretical concept. Moreover, some authors argue that the use of the term “corporate citizenship” adds to the confusion...