Corporate Social Responsibility in Business

The formal definition of social responsibility, according to Paul Reynolds, is "management's obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organisation." (1995:23). However, it is not as straightforward as it may seem. Having social citizenship means putting managerial ethics to practice and work. So how can we measure social responsibility if one company's ethical decision might be viewed as unscrupulous to another? With the competing demands from different stakeholders, CSR is becoming more important in an organisation. Australian companies are starting to recognize that they have a wider responsibility to the communities within which they operate. Research has shown that by implementing social responsibilities, a win-win situation can be achieved between the company and its stakeholders.

It is said that there are two kinds of responsibility in a company - commercial and social (Frost, personal communication, 2003).

Robert Frost, "The Road Not Taken", 1874 - 1963

English: Chart depicting the major kinds and inter...

English: CSR approaches CSR framework

Commercial responsibilities involve running a business successfully, generating profit and satisfying shareholder expectations. Social responsibility on the other hand is being aware of the issues being presented in the community and the working environment. CSR is not a new concept. Some companies have always acknowledged a "wider responsibility towards the community" (M.Keay, personal communication, April 2002). Such activities in the past have tended to come under "paternalism" and "philanthropy". However, as Richard Welford suggests that corporate social responsibility tends to be much more far-reaching than paternalism or philanthropy. He states that "social responsibility requires us to look at ethics, stakeholder accountability and also our own value systems" (2002:1).

In order for a company to be a social citizen, they must hold a strong belief for ethical decisions and behaviour. Normative ethics uses various of styles to describe the values for directing ethical decision making. As Carolyn Wiley (1995) identifies that...