Abstract
The second chapter explores the evolution of the concepts of business ethics, corporate social responsibility (CSR), and corporate sustainability (CS). It highlights the main advantages and limits of these approaches. The chapter points out how changes in the field of business ethics and CSR lead to the progressive affirmation of CS. This is considered a new business approach in guiding the life of an organisation. CS is analysed with three components: (1) people, (2) profit, and (3) planet. Finally, the work recommends areas for further discussion and research.
TopIntroduction
A wide debate on CSR developed during the 20th century (Glavas, 2016; Jamali & Karam, 2018; Rupp & Mallory, 2015), beginning with Bowen’s (1953) proposed facets related to the CSR theory. Since then, there has been a continuous change in the field terminology. This topic became an important area of study, enriched with related theories and approaches, including business ethics, social issues management, cause-related marketing, corporate philanthropy, public policy, stakeholder management, and corporate accountability (Buysse & Verbeke, 2003; Howlett, Ramesh & Perl, 2009; Valor, 2005). Few topics describe the phenomena associated with corporate responsibility (Hahn, Figge, Pinkse, & Preuss, 2018; Tran, 2018; Weber & Wasieleski, 2018). More recently, the original concepts of corporate citizenship and CS have been added to this field of study.
The revolution associated with social responsibility has necessitated that scholars and researchers compare these issues (i.e., citizenship, ethics, sustainability) with traditional CSR to identify similarities and differences (Logsdon & Wood, 2002; Matten, Crane, & Chapple, 2003; van Marrewijk, 2003). In reaching this goal, several academics found recent theories and approaches joining existing topics. These theories were used to create a new approach or apply the current terminology to different fields with other peculiar meanings. For example, Votaw (1972) stated that:
Corporate social responsibility means something, but not always the same thing to everybody. To some it conveys the idea of legal responsibility or liability; to others, it means socially responsible behaviour in the ethical sense; to still others, the meaning transmitted is that of ‘responsible for’ in a causal mode; many simply equate it with a charitable contribution; some take it to mean socially conscious; many of those who embrace it most fervently see it as a mere synonym for legitimacy in the context of belonging or being proper or valid; a few see a sort of fiduciary duty imposing higher standards of behaviour on businessmen than on citizens at large. (p. 25)
This problem related to the meaning of CSR was taken into consideration 30 years ago. However, the matter still exists. For this reason, Carroll (1994) highlighted that the situation of CSR is:
An eclectic field with loose boundaries, multiple memberships, and differing training/perspectives; broadly rather than focused, multidisciplinary; wide breadth; brings in a wider range of literature; and interdisciplinary. (p. 14)
After identifying this deficiency, Frederick (1998) tried to create a classification of these subjects by considering their opposite poles. On one hand, he set an ethical aspect of CSR. On the other hand, he set practical features typical of social responsiveness. Between these two extremes, Frederick (1998) placed other elements and approaches related to CSR, including religion.
Conversely, Brummer (1991) classified CSR-related aspects into four groups based on six criteria: (1) motive; (2) relation to profits; (3) group influenced by strategies; (4) category of act; (5) effect; and (6) expressed or ideal interest. The classification can be seen as a contribution to this field. It does not help to analyse the nature of the relationship between an organisation and society. Moreover, Carroll (1999) created a chronological progression of the main advances in terms of corporate responsibilities.
Other categorisations of CSR have been developed, with many of them based on social issues in management and corporate citizenship (Altman, 1998; Matten & Crane, 2005; Walsh, Weber, & Margolis, 2003; Wood, 1991). These topics are considered when highlighting the main changes in the field of ethics.
Key Terms in this Chapter
Corporate Citizenship: Activities and processes implemented by an organisation to meet its social responsibilities (i.e., legal, social, environmental, ethical, and economic) according to stakeholder pressure. It aims to create higher standards of living, improved quality of life for society, and profitability for stakeholders. As the demand for corporate citizenship increases, investors, consumers, and employees will use their collective power to influence organisations that do not share their ethical principles.
People: This feature of the triple bottom line (TBL) indicates the concept of human capital. It refers to people who work for the organisation, as well as people who affect and are affected by the company’s performance. This aspect is strictly linked with other relevant topics, including stakeholders, stakeholder engagement, social responsibility, and corporate social responsibility (CSR) communication.
Planet: The environmental bottom line pillar indicates a company’s sustainable environmental practices. This concept requires that a triple bottom line (TBL) organisation cares for nature, does not create irreversible problems, or reduces its environmental impact. A company that follows the TBL approach minimises its ecological footprint (i.e., managing energy use, minimising non-renewable resources, decreasing pollution, making its waste less contaminated before disposing of it in a secure and legal mode).
Sustainable Development: This concept was introduced in 1987 by the World Commission on Environment and Development. It identifies a development that can meet today’s needs for a safe environment, social justice, and economic growth without impeding future generations. The preservation of the three pillars of sustainability must be the main aim of all companies.
Corporate Social Responsiveness: This process identifies how organisations and their stakeholders dynamically interact and care for the environment. Conversely, corporate social responsibility (CSR) refers to a company’s moral obligation to society. Thus, responsiveness and responsibility are linked. However, responsiveness can be created through public expectations of corporate responsibilities.
Profit: The financial component of triple bottom line (TBL) is the main aim considered by companies. Profit involves financial and “natural” capital.
Reputation: Corporate reputation is a collective mental representation. It expresses a company’s relative status in the mind of employees and other stakeholders. Corporate reputation refers to the collective judgment of the public regarding an organisation. The judgement is based on financial, environmental, and social impacts.
Triple Bottom Line (TBL): This concept, which was created in 1994 by Elkington, refers to the fact that companies should focus on three bottom lines: (1) habitual evaluation of corporate profit; (2) social responsibility; and (3) environmental responsibility. This concept involves profit, people, and planet. It aims to evaluate the financial, social, and environmental performance of an organisation.
Cause-Related Marketing: The process of creating and implementing marketing tactics that are characterised by providing a certain amount of money to a nonprofit cause. This, in turn, encourages consumers to engage in revenue-providing exchanges.