The two approaches of corporate social responsibility Nowadays, Corporate Social Responsibility (CSR) is a mega trend that is changing the business world modus operandi, since it is acquiring considerable importance amount stakeholders. Companies should consider CSR as part of their strategic planning, mainly taking two approaches.
This example demonstrates the weakness of mandatory CSR, where companies comply with the law and yet their behaviour is manifestly contrary to the objective of a provision at stake. The last approach is CSR as a combination of voluntary and compulsory approaches. CSR is a strong incentive for conformity and behaviour beyond compliance.
[26] D. Brennan and B. Brennan, Corporate Social Responsibility: The Corporate Governance of the 21st Century, 2nd edition, Alphen aan den Rijn, Wolters Kluwer, 2011, p. 175. [27] Brennan and Brennan, p.175. [28] J. Bakan, ‘The Invisible Hand of the Law: Private Regulation and the Rule of Law’, p. 299.
Companies should consider CSR as part of their strategic planning, mainly taking two approaches. Differences between Responsive and Strategic CSR Responsive CSR Strategic CSR The company becomes a good citizen, reducing the harm to society produced by its value chain activities.
CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders.
There are two major perspectives on Corporate Social Responsibility, Friedmans Classical Perspective and Freemans Stakeholder Perspective.
Corporate social responsibility is traditionally broken into four categories: environmental, philanthropic, ethical, and economic responsibility.Environmental Responsibility. ... Ethical Responsibility. ... Philanthropic Responsibility. ... Economic Responsibility.
Together, these three notions of sustainability—economic, social, and environmental—guide businesses toward actions fitted to the conception of the corporation as a participating citizen in the community and not just as a money machine.
In the current study, Carroll's (1991) framework was employed, with the four CSR dimensions: economic, legal, ethical, and philanthropic activities.
- The two ethical justifications for the economic model are the utilitarian and individual rights or private property defenses.
Proactive corporate social responsibility (CSR) involves business strategies and practices adopted voluntarily by firms that go beyond regulatory requirements in order to manage their social responsibilities, and thereby contribute broadly and positively to society.
The social obligation approach considers business as having primarily economic purposes and confines social responsible activities mainly to conformance to existing laws. The socially responsible approach sees business as having both economic and societal goals.
The triple bottom line is a business concept that posits firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line.” It can be broken down into “three Ps”: profit, people, and the ...
There are three major contrasting perspectives on or approaches to corporate social responsibility and these are: traditional, stakeholder and affirmative social responsibility.
“The role of corporations in society is clearly high on the agenda . Hardly a day goes by without media reports on corporate misbehaviour and scandals or, more positively, on contributions from business to wider society.” [1] Companies did realize that human rights abuses, polluting, or misinforming and consciously harming their clients, were actions that needed to be reconsidered if they wanted to remain and do well. [2] The prominence of Corporate Social Responsibility (hereinafter: CSR) is growing and so does the amount of articles and reports on CSR.
The first state that made CSR mandatory is India. [29] . The law obliges (on a ‘comply-or-explain’ basis) companies that have a certain size or profit must spend minimum 2% of the average profit over the last 3 years on CSR activities.
The initiative entails human rights, labour, environment and anti-corruption. The principles are minimal standards, based on documents recognised by most states and are already present in national jurisdictions. Moreover, there are no sanctions or other controlling measures.
The notion of self-regulation can be defined as “an umbrella term that can encompass a variety of factors. In its broadest sense, self-regulation involves planning and policy making regarding issues and activities not covered by public regulation”. [11] .
The notion of governance gap can be understood as a lack of international legislation to remove the differences between states, that is the difference between high and low level of protection. [10] . The answer is a private regulation where companies are subjects of self-regulation.
A form of universal standards for corporations can be provided by international conventions such as UN Convention on Human Rights and the International Labour Organisation Conventions on the Fundamental Rights of Workers, however they cannot be imposed on them. [9] .
The notion of CSR as voluntary can be seen from two perspectives, namely, from legal or economic. Legal voluntarism presents CSR as being beyond the law without hard law requirements imposed, whereas in economic voluntarism CSR is promoted through law with freedom of economic decision-making. [6] .