Today, the overall behavior and action of business to make money and ambitious progress related to the matters of economics is changed. It is transferred to the behavior that includes matters or aspects that include functioning of environment (social agent). Donaldson and Prestion (1995) observed this change due to the involvement of such relations that connected business matters and matters related to the environment. These environmental matters greatly effected company’s working capability. Nowadays, every kind of business includes Corporate Social Responsibility (CSR) that could be observed in large organizations mainly known as multinational companies. They are consistently performing their duties and work in order to benefit the society, as well as their own business. Currently, we can easily see the element of society among most of the business matters. Here, we need to discuss the overall role of Corporate Social Responsibility (CSR).What is its role or how it works as related to the business viewpoint and also related to the view of social functionality. Here, we can discuss this matter in the lights of academic view, its history and its real life demonstrations (Donaldson and Prestion, 1995).
As the term” CSR” convey about the meaning of three different words that are used in it: Corporate, Social and Responsibility whereas each one has its importance different from one another. There are many definitions that could be easily used related to CSR, but the most prominent and clearest definition about CSR is the working functionality of business keeping in mind about its behavior and effects on social matters. However, Mccomb (2002) provided a real snapshot of the actions of different businesses related to his definition of CSR. He compared companies with ethical values, element of transparency, relationship between employees, working of the organization related to requirements and also its effects on the working element of any society. Similarly, McGregor (2010) used such resembling words as compared to CSR. They are the responsibility of business towards society, responsibility of any corporate, flexibility (sustainability) and the governance of corporate (Baker, 2012;.McGregor (2010).
According to Bowen (1953), CSR was developed in the year of 1950 in which businessmen started to give of their interest and concentration towards the well-functioning of society. The roots of CSR are derived from the writing of Andrew Carnegie as stated by Holcombe (1998). Andrew Carnegie, the founder of US steel, developed two principles related to the better performance and capitalism of the overall work. According to the first principle that is called principle of charity. It includes fortunate members of the society ("those members who have many facilities for their lives") must give full and proper respect. This also emphasizes on concentration to those who are unfortunate or who have not been given full facilities to their lives. This relationship or understanding must be given through specific places such a churches, settlement houses and other places where there is a gathering of people (members). The second principle is all about stewardship. In this principle, the businessmen or rich people were considered as stewards or caretakers of their businesses. Through this principle, businessmen or caretakers are given a great chance to invest and upgrade their business or property through a proper and more secure platforms (Carroll, 1999; Carroll & Shabana,2010).
As per Barnett (2011), Adam Smith, an economist and a philosopher contributed his thinking related to the topic of CSR in the eighteen century. According to his thesis on "An inquiry into the nature and causes of wealth of nations.", his research conveyed about the needs of a better society that could be achieved through a better interaction between people and organization members into a marketplace. Through this process, business can easily gain more profit on their profits and also, they can give a good outcome to the people. However, many other authors discussed their ideas against this thesis. They conveyed that the idea of interaction between members and people at the marketplace could not improve the overall facility for the society. It also, could not improve the level of profit for the products (Barnett 2011).
During the development by the time, interest towards investment within CSR from organizations is increasing due to change in the management mindset (thinking) from single dimensional thinking towards multidimensional thinking. (Barnett 2011; Carroll & Shabana, 2010 ). This change occurs due to various topics. Husted & Slazar (2006) conveyed about the investment of the firm into CSR due to ‘coerced egoism' and also due to the government regulation. Hence, different firms were required to invest with such passion in which less or minimum standards are required. But, this strictness or punishment must not be taken as a dead end for better business or interaction. However, this rule and regulation play a vital in the well- functioning of any business or firm. Gyves & O'Higgins (2008) stated that future laws and rules may appear to be very hard one for the firm at the present time. They play a vital role in the future in the context of benefits. He proved his point with the term such a Safe Driving Campaign developed by the Vodafone Company for a secure and better driving conditions and environment for the drivers (Husted & Slazar, 2006).
Employees are always a vital asset for any organization, and they play a great role during the interaction between any firm and people. The proper and reasonable concentration towards all the way through which these employees are given jobs at different firms (organizations).They taking care about the incomes, taking care of each, and every element that is related to the working and also to the personality of any employee is very important. In CSR, a better employee is very essential. This employee will create such a platform between firms (organizations) and people through state of the art working environment from that lead to a greater opportunity for an increase in the outcome. There also occurs a great chance for a betterment of any society (Husted &Slazar, 2006).
Fombrun (1997) stated that the corporate’s reputation is nothing more than a perceptional representation of company’s past (that is what happened in the recent time).Its future requirements or goals also describe any company's performance compared to other companies (rivals). This simply shows that if there is a better understanding between a company and the outside world, there will be a greater expectation of the outcome and a better results for society (Fombrun.1997).
The Theory of Stakeholder and its Role under CSR was described by many scholars in this field.
Holcombe (1998) stated that firm is considered as the series of connections of stakeholders (that occurs between them) that the managers are required to manage. Two principles of stakeholder theory are:
- Corporate Right Principle: This states that the corporate and its managers are not required to break the rules and regulations set for others rights that help them for their better future.
- Corporate Effects Principle: This states that the corporate and its managers are responsible for each and every action that is performed within or outside the firm or corporation (Holcombe, 1998).
The management is required to present CSR as an element of ‘value proposition’ with a proper board. This board should have each and every right to discuss and provide their proper ideas (plans) related to any work, required to look after each and every activity that is occurring within the firm. It also, required to impose their decisions on the managers or workers, so that these workers could work on those decisions. This board is required to make such dealings with the world that are helpful for the company and also that facilitates for the betterment of any society (Carroll & Shabana, 2010; Holcombe, 1998). Different elements in this group includes:
- Centrality: Meaning, such decisions must be taken that are helps in company’s missions
- Specificity: Meaning: capturing of benefits from the firm
- Proactivity: Decisions are taken out keeping in mind about the society and removing every crisis element
- Voluntarism: Each and every person in the group must be given full chance to convey about his or her plan or thinking
- Visibility: Decisions could be challenged quite easily (Holcombe, 1998).
CSR has it tremendous impacts on the society that facilitate in a reduction in poverty, improvement in economic development, health care facilities and proper ways of stopping child labour (Donaldson & Prestion, 1995).
In short, CSR provided a platform for all businessmen and companies to set such rules and regulations that are needed for well functionality of the society. Employees working in different firms play their role of securing the society from every bad action that could harm the society and its people. Businessmen and companies should invest their profit on those dealings that are required for the well-being of all those unfortunate people who are not given proper facility for their growth and also for the betterment of their families. Companies and firms must take care of society.
References
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