In the business “dictionary” the term corporate social responsibility means that the managers of a company try to make sure that the daily operations of the firm are in line with the social, economic and environmental philosophies of stakeholders.
For some this is sufficient. They are able to include the economic factors and the stockholders of the company in their consideration. For others there are some limitations when the individual parts of the phrase “corporate social responsibility” are considered.
In the first case, when corporations define social responsibility, the key word is strategy, not “social” or “responsibility.” Certainly, the pursuit of such responsibility takes in how the firm makes its profits as well as how it uses the profits. Many large, international companies have, in recent years, stepped into line with the new expectations of how a major business fits into society.
They have started to consider the social role they play, which means they must consider the communities in which they exist, along with the guidelines set down by government policymakers at local, state and federal levels. In fact, corporations increasingly consider their place on the planet and within the global community. Corporate social responsibility can work, most agree, when the companies, their stockholders and the government regulators balance responsibility with whatever vision of capitalism they are chasing.
In simple terms, this means making money while maintaining social values that might, at first, seem to be obstacles in the corporate path. One of the better definitions combines the idea of self-regulation with the profit-making concept.
Those in the business world, as well as those in university setting, have long discussed the idea of business ethics. While this subject may seem to be the same as corporate social responsibility, there are significant differences. Business ethics is also a way of relating to the rest of the world. But ethics can refer to one-on-one relationships with a customer, while social responsibility may set its sights on a more global playing field. Corporate social responsibility would appear to be a bit larger in scope.
In both cases, profits and money have to be included in discussion. On the bottom line, a company exists to make money. Likewise, with business ethics and social responsibility, the way a company makes money is important. This may be where the two paths diverge. A company that has, in the past, been unethical in its business dealings is subject to fines and other penalties under a nation’s legal system.
Social responsibility in the corporate world has, in contrast, become a billion-dollar marketing effort, with companies focusing on fitting into the new world atmosphere so that they maintain their loyal customers. This is quite a bit different from being jailed or fined for doing something that is specifically against the law.
Not that a socially responsible company wouldn’t also operate on a high level when it comes to ethics. It’s just that, to the analysts and business experts who look at the two concepts closely, corporate social responsibility has a much more philosophical foundation than ethics.