Defining corporate social responsibility

The key issue with corporate social responsibility (CSR) is that there is no singular definition of the concept. The earliest and most widely accepted definition of CSR was provided by Carroll (1979), who depicted the nature of CSR in diagrammatic form as shown in figure 1.1, and defined it as:

the economic, legal, ethical, and discretionary expectations that society has of organisations at a given point of time (Carroll 1979, p. 500)

Figure 1.1: Carroll's CSR pyramid

As such, Carroll (1979) perceives CSR to be a concept with multiple layers which are consecutively placed within a pyramid.

The first responsibility of a company is to be economically sustainable and ensure that it makes a reasonable return for the shareholders' investments. This first layer is the basis for all subsequent responsibilities and, as such, the satisfaction of economic responsibilities is necessary for all corporations.

The second responsibility that follows is for corporations to be law-abiding as companies cannot fulfil their ethical and discretionary responsibilities without ensuring legal compliance. The third responsibility requires companies to do what is "right, just and fair" (Crane & Matten 2010, p. 54). As such, a company's ethical responsibility requires it to go 'above and beyond the law'.

The final responsibility, at the top of Carroll's (1979) pyramid, is the discretionary responsibilities of corporations. These philanthropic responsibilities are those responsibilities which are desired of corporations, but which should only be fulfilled at the behest of the corporation itself and, as such, has to be voluntary.

However, there are multiple perspectives on CSR. For example, Williams (2001 cited in Morrison 2006, p. 465) argues that CSR can become a source of competitive advantage based upon market conditions. Examples of this include what Morrison (2006, p. 465) describes as:

• products made from CSR sources such as recycled materials
• products made through CSR-related processes, such as organic foods
• advertising which provides information about CSR attributes, such as dolphin-free tuna labels
• building brand reputation on CSR attributes

Activity 1.1

Watch the following short video that gives a different perspective on CSR. Using the Discussion Board, discuss with your peers whether this 'new' approach is new at all. Does it matter what CSR is called?

More contemporaneously, and similar to Marre (2010), Visser (2015) is pushing the boundaries of the term, challenging further whether we should be talking about corporate social responsibility or corporate sustainable responsibility. The difference, according to Visser (2015), is the typical emphasis upon activities when considering 'social', as opposed to emphasis upon the societal impact of the business when conspiring 'sustainable'.

Visser (2015) has developed what he calls "the four strands of a company's DNA" when it comes to a corporate approach to social or sustainable responsibility.

First, value creation - having mainly to do with inclusive economic development.

Second, good governance, which covers the bases of good ethics, good leadership and transparency.

The third is societal contribution, which is where stakeholder orientation or philanthropy plays a role, but also labour standards and value chain integrity.

The last is environmental integrity which, of course, is to do with sustainable eco-systems, renewable approaches, zero waste and those sorts of initiatives.

Watch the following video from PwC where two leaders discuss how CSR has evolved into a business need.

Visser (2015) conceptualises the evolution of CSR in the following way from a defensive approach, where the business focus is upon making profit and compliance to legal or standard requirements, to the position where the CSR issue is seen as a core consideration integrated into all business functions and strategy.

Figure 1.2

Image source: M-Prize