Theories and Models of Corporate Social Responsibility
Corporate Social Responsibility (CSR) is also termed to as responsible business, sustainable, responsible business or corporate citizenship. It is a type of a corporate self-regulation that is incorporated in a business model to ensure that the business runs as per the set regulations and strives to create a positive change on the society (Aguinis and Glavas, 2012). CSR is common in a society where the society and the business are interrelated. As such, the business has distinct roles to play in the society. Therefore, a corporate social responsible business will engage in activities that aim at maximally making profits for the shareholders and involves in charity partaking and social foundations. CSR came into origin when several multinational enterprises (MNEs) were formed. This brought the need for a force that would push the corporate governance mechanisms to incorporate transparency and fairness in the corporate activities (Jo and Harjoto, 2012). Corporate Social Responsibility entails giving back to the society, creating a sustainable livelihood for the people in the society and representing a philanthropic model in the community. Therefore, CSR is about the business encompassing the ethical, legal and economic expectations that the society has towards the MNE. CSR is built under the concept of adhering to international norms, ethical standards and supporting the law (Aguinis and Glavas, 2012; Hopkins, 2012). As a distinct theory that explains how the corporations interact with the society that it is established in, CSR has several obligations that it is expected to play. These obligations include philanthropic responsibility, ethical responsibility, economic responsibility and legal responsibility. Some of the CSR concepts are discussed herein.
Carroll’s CSR Pyramid
This framework argues on the reasons as to why the organizations should meet the social responsibilities that they are expected to accomplish. According to Nalband and Kelabi (2014), this CSR concept is built on the basis that profitability is the priority. Although the business exercises the CSR obligations, it should maximize the profits while being ethically responsible. The business should also comply with the regulations and laws of the society. Another feature of this framework is that the business should meet the ethical duties before considering the philanthropic options.
Triple bottom line
Triple bottom line Concept was established based on the argument that the business should prepare three separate bottom lines as discussed in Triple bottom line (2009). The first bottom line is a measure of how the corporate has been socially responsible throughout its activities. The second bottom line measures how the business has been environmentally responsible since its establishment. An account of the profit and loss made is another bottom line addressed by this framework. Typically, the triple bottom line concept aims at measuring the environmental, social and financial performance of the corporation.
Ackerman’s model
According to Garriga and Melé (2013), the model explains that responsiveness should be the main goal of any social activity of business. Based on the model, responding to the social issues should undergo a systematic process which begins with problem recognition. After that, it should be followed by a study of the issue and coming up with diverse ways of dealing with the issue and finally implement the decision. So as to maintain management discretion, the business managers should respond to the identified social issues early.
Theories of Corporate Social Responsibility
The CSR theories correspond to the model which describes the implementation process. There are several theories of CSR some of which are discussed herein.
Instrumental theories- these theories rely on the economic objectives that the corporations are established in (Bondy, Moon and Matten, 2012). As such, the corporations are established and utilized as strategic tools which help in the creation of wealth. These theories are further subdivided into the shareholder value maximizing group, achieving the competitive advantage strategy group and the cause-related marketing.
Political theories-these CSR theories aim at the interaction between the community and business and the power that the business possesses from this connection (Brammer et al., 2012). These theories are further divided into corporate citizenship and corporate constitutionalism.
Ethical theories- these theories explore the ethical needs that create a stronger bond between the society and business (Bondy, Moon and Matten, 2012). Such bond is established on the principles the corporation should express the necessity to do the right activities in the society with an objective of achieving a positive impact in the society. Some of these theories include universal rights, normative stakeholder theory, and sustainable theories.
Integrative theories- these theories are established from achieving a social legitimacy and being exposed to the social acceptance in the society. Integrative theories depend on the social demands aiming at the growth and continuity of the corporation in the society. Therefore, it means that the business interacts with the society to possess prestige and legitimacy. This interaction can be achieved through theories such as issues management which is a concept that refers to the social response broadening based on the management issue (Hopkins, 2012). In this perspective, the management issue refers to making of corporate response to the social issues in the environment that the business is operating in. Some of the concepts incorporated in these theories include public responsibility principle, management issues, corporate social performance and stakeholder management.
Teleological moral theories- such theories include egoism and utilitarianism. Utilitarianism creates a relationship between utilitarians and CSR (Brunk, 2012). Based on this theory, companies have an obligation of promoting the moral for an objective of achieving the best outcome. On the other hand, egoism refers to an arrangement that socially aims at being rational so as to achieve the best of the set corporation interests. Brunk (2012) asserts that egoism helps at maximizing the profits through making the company refrain from doing harm.
Deontological moral theories: these theories include, common sense morality, libertarianism, corporate citizenship theory and stakeholder theory. Libertarianism asserts that the business has no obligation to assist the society but should restrain from negatively affecting the society (Brunk, 2012). Unlike libertarianism, common sense morality believes that not only should be business avoid negatively impacting on the society but also should exercise positive duties towards some groups such as stakeholders, employees and the local community. The corporate citizenship theory emphasizes that the business should contribute to the social welfare through defending the human rights. Based on the stakeholder theory, the business should be managed in a way that it benefits all the stakeholders (Cheng, Ioannou and Serafeim, 2014).
Bibliography
Aguinis, H. and Glavas, A., 2012. What we know and don’t know about corporate social responsibility a review and research agenda. Journal of Management, 38(4), pp.932-968.
Bondy, K., Moon, J. and Matten, D., 2012. An institution of corporate social responsibility (CSR) in multi-national corporations (MNCs): Form and implications. Journal of Business Ethics, 111(2), pp.281-299.
Brammer, S., Jackson, G. and Matten, D., 2012. Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-economic review, 10(1), pp.3-28.
Brunk, K.H., 2012. Un/ethical company and brand perceptions: Conceptualising and operationalising consumer meanings. Journal of business ethics, 111(4), pp.551-565.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), pp.1-23.
Garriga, E., and Melé, D., 2013. Corporate social responsibility theories: Mapping the territory. In Citation Classics from the Journal of Business Ethics, 2(1), pp. 69-96. DOI 10.1007/978-94-007-4126-3_4
Hopkins, M., 2012. The planetary bargain: Corporate social responsibility matters. New York: Routledge.
Jo, H. and Harjoto, M.A., 2012. The causal effect of corporate governance on corporate social responsibility. Journal of business ethics, 106(1), pp.53-72.
Nalband, N.A. and Kelabi, S.A., 2014. Redesigning Carroll’s CSR, pyramid model. Journal of Advanced Management Science, 2(3), pp. 4-10.
Triple bottom line. (2009). [online] The Economist. Available at: http://www.economist.com/node/14301663 [Accessed 21 Feb. 2017].
