2.1 Definitions of Corporate Social Responsibility (CSR)
CSR has been defined as the duty of the organization to respect individuals’ rights and promote human welfare in its operations (Manakkalathil and Rudolf, 1995; Oppewal et al., 2006). Businesses not only have the economic responsibility of being profitable and the legal responsibility to follow the laws or ground rules that guide their ability to achieve their economic requirements, but they also have ethical responsibilities that include a range of societal norms, or standards (Carroll, 2000). CSR has been around for more than two decades.
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During the later half of twentieth century there arose the idea of the corporate social contract, which today underlies the CSR concept. Given the sometimes adverse effects of business decision making on society as well as corporate reliance on society, the notion of an implied corporate social contract was conceived by social and economic theorists. This contract spells out society’s expectations of business as well as (although much less discussed) business’s expectations of society (Bowie, 1983). There is no single authoritative definition of CSR (ISO COPOLCO, 2002). The CSR agenda seems to be a loosely defined umbrella embracing a vast number of concepts traditionally framed as environmental concerns, public relations, corporate philanthropy, human resource management and community relations. One of the most referred definitions is by World Business Council for Sustainable Development (WBCSD) (1999) that defines CSR as â€œthe continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at largeâ€?. CSR means being a good steward of society’s economic and human resources ( Journal of Consumer Marketing, 2001). In summary, CSR entails the obligation stemming from the implicit â€œsocial contractâ€? between business and society for firms to be responsive to society’s long-run needs and wants, optimizing the positive effects and minimizing the negative effects of its actions on society. To synchronize that organizational social responsibility concerns are treated in the same routine manner in which legal, financial, and marketing concerns are addressed, four theories of corporate social responsibility have been advanced in the literature. The four positions are the classical, stakeholder, social demandingness, and social activist theories. The classical theory is the oldest of the four, and is grounded in classical economic theory. Firstly business executives are said to be primarily responsible to the shareholders of the corporation and their primary goal is to promote efficiency and secure effective economic performance. Secondly managers are said to be responsible to respond to the shareholders demands. These views are often thought to coincide with each other, because it is usually assumed that the main demand of shareholders is to maximize economic performance. In addition, both versions agree that managers are to perform their corporate function according to the laws and,