Abstract
As of the publication of Bowen's masterpiece Social Responsibilities of the Businessman in 1953, it can be claimed that people have started to think that corporations have responsibilities to their societies in addition to their principal task of maximising shareholders' value. Corporate social responsibility owes its existence to this paradigm shift. Currently, there are a bunch of notions that are closely related to or somehow intertwined with the concept of corporate social responsibility. This review has been written to discuss the similarities and differences between these terms—triple bottom line, sustainability, corporate social performance, business ethics, corporate social responsiveness, corporate citizenship, corporate governance, corporate philanthropy, socially responsible investment, environmental, social and governance—and corporate social responsibility, as well as to provide frequently cited definitions of this concept.
TopPopular Definitions Of Corporate Social Responsibility
Before moving on to concepts related to CSR, it is better to review some, particularly highly cited, definitions of CSR.
Starting with the main concept of CSR, Bowen, in Social Responsibilities of the Businessman, defined the social responsibility of a businessman as maintaining necessary policies, making decisions, and following the course of actions in terms of the related society’s objectives and values. In its broadest sense, social responsibility implies considering a businessman’s voluntary participation in social responsibility as a practical means to address economic problems and to acquire wider economic goals being pursued (Bowen, 2013, p. 6).
Davis (1960, pp. 70–71) explained social responsibility as the decisions of businessmen regarding their firms, at least partially, beyond economic and technical matters and their actions. Here, the social responsibility of a businessman covers both economic developments affecting public welfare and protecting and enhancing human values. Davis (1967, p. 46) stated that social responsibility is closely related to the ethical outcomes of personal actions, and it underlines the importance of the position and actions of corporations. Davis (1973, pp. 312–313) claimed that social responsibility goes beyond a firm’s technical, economic, and legal requirements and begins where the law ends.
Friedman (1970, 2002, pp. 133–134) thought that the only social responsibility of a company is efficiently allocating and utilising its resources and operating in a way to maximise its profits. According to this view, as the companies do not have real personalities, they also cannot have so-called “social” responsibilities. As the concept is seen as a destructive one to a company, it may lead to agency problems within the business.
There are four different ways to define CSR, according to Johnson (1971, as cited in Carroll, 1999, pp. 273–274): First, a “corporate” socially responsible firm is a firm that considers stakeholders’ interests. In the second and third definitions, CSR involves long-term profit maximisation and utility maximisation, respectively. Last, reaching a certain profit margin is the primary objective, and other objectives, such as CSR, follow this objective.
Key Terms in this Chapter
Corporate Social Responsiveness: Managerial actions as a response to social expectations and concerns.
Corporate Philanthropy: Having a high reputation in the eyes of society through being a good citizen beyond being altruistic, and to grant money and other resources for social purposes.
Corporate Governance (CG): Regulating, restructuring and balancing a company’s operations, processes, and relationships with its stakeholders by utilising effective governance mechanisms.
Business Ethics: A business’s fairness and accuracy to stand strong against corporate scandals.
Environmental, Social, and Governance (ESG): Materialising socially responsible companies by addressing measurability based on metrics and risk and return relationships.
Sustainability (Sustainable Development): A paradigm shift stemming from corporate social responsibility moving to a sustainable world, mainly covering a wide range of societal and environmental topics.
Socially Responsible Investment (SRI): Investments that are both financially lucrative and socially responsible.
Triple Bottom Line (3BL, 3P Formulation): Dimensions targeting people, environment and profit for use in performance evaluations of a socially responsible business.
Corporate Citizenship (CC): The identity of businesses in society. Participation in community events in a good and legitimate manner to be a good citizen.