Corporate Social Responsibility: A Business Contribution to Sustainable Development

Corporate Social Responsibility: A Business Contribution to Sustainable Development

Cornelia Philipova (University of Economics – Varna, Bulgaria)
DOI: 10.4018/978-1-7998-2193-9.ch001

Abstract

The processes accompanying state social policy over recent decades as well as their contradictory impact on the sustainable development of the society are one of the fundamental problems of our time. Nowadays, there are still no clear solutions to the debate how to alleviate some of the fundamental problems like environmental pollution, poverty, aged population, income inequality, social exclusion, etc. This chapter aims to show how multinational corporations (MNCs) take the role to solve these issues following some corporate social responsibility (CSR) policies. In this way, they offer a means by which the current CSR model can be used more effectively to achieve these sustainable development targets. The structure of the chapter is organized as follows: Section 2 presents an evolution while Section 3 provides a summary of some contemporary views of CSR. Section 4 describes the way in which CSR is used as a sustainable development tool.
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Introduction

The topic of companies’ social responsibility is becoming increasingly relevant nowadays. However, its evolutionary beginning is still embedded in the ideas of Charles Robert Darwin (1809-1882). The British scientist and naturalist was the first to launch the concept of the evolution of all species over time from a common ancestor through a process called “biological evolution of natural selection”. In the 19th century, he pondered over the survival and extinction of biological species. He said “Survival of the Fittest” alone inducts any species to grow and continue to survive in any given geographical and environmental infrastructure in the world. (Note: He did not say “Survival of the Biggest, Fastest, Healthiest, Mightiest, Smartest or Toughest”, etc..!!). He inferred that the organism that best adjusts and “fits” into the changing environment, puts up with sufferings and adjust with what is available alone continues to live and progresses… All human beings, hence try to fit into a three dimensional survival concept namely (a) The geography and environment (b) The social influences and (c) The Economic infrastructure (Subramaniam, 2013, p. 6). Nowadays, it is easy to conclude that the words of Charles Darwin are still applicable especially concerning social survival and social responsibility.

The responsibility for dealing with social problems is a major priority of the public sector and the governments in particular. In the backdrop of rising social problems and still emerging economies since the global financial and economic crisis of recent years, the question arises as to the extent of voluntary entrepreneurial engagement that could contribute to the potential counteracting against social challenges. Regardless of all growth forecasts, there is a trend towards the polarization of incomes, which brings with it an increased level of poverty. More and more people living with less money (below the poverty line) increase their income through state social transfers. This trend has put the societal consensus for reduction of social inequality to a serious test. And here comes one alternative named Corporate Social Responsibility (CSR). It could be said that this alternative can play an important role and act as a major pillar of the prosperous society. The emerging interest in corporate responsibility as a means to alleviate social challenges can be treated as a potential solution in the battle against social polarization.

CSR is backed by the idea that companies may take responsibility for social processes through and in addition to their economic activities. CSR refers to the measures that companies use to influence social processes positively. Thus, the enterprise’s policies are not focused exclusively on the interests of shareholders but on the entire business environment. In this relation the stakeholders may be the workers, clients, directors, suppliers, residents, NGOs, investors, politicians, the media, research and educational institutions, as well as supranational organizations involved in the development of guidelines on Corporate Social Responsibility.

This publication aims to review and evaluate the potential of CSR and relevant corporate policies. For this purpose, the following objectives have been set:

  • To timeline the chronological evolution of CSR;

  • То review and perform a critical analysis of the main theoretical formulations of CSR;

  • To consider the importance of CSR as sustainable development (SD) tool.

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Background Of The Theoretical Views On Csr To Society

The current business model is facing the mega-trends of exhausted natural resources, climate change, urbanization and migrating population, increasing efficiency and artificial intelligence, cyber reality, crypto technologies, blockchain-distributed registers, etc. As a result of global changes, new market opportunities, regulatory, and governance regimes are emerging. Thus, at the end of the twentieth century, and with the global discussion on CSR, the role of business in society was reviewed. Economies took a direction towards sustainable development. Because of the demographic, market and high-tech trends, it is necessary to predict the needs of present and future generations.

Key Terms in this Chapter

Socially Conscious Activities: They promote social change, resolve human relationships and develop people's capabilities to enhance well-being.

Corporate Social Responsibility: A concept according to which organizations take into account the interests of society, taking responsibility for the impact of their activities on companies and other public stakeholders. This commitment goes beyond the legal obligation to comply with legislation and suggests that organizations voluntarily taking further steps to improve the quality of life of workers and their families, as well as the whole local community and society.

Socially Responsible Investments: They represent the application of the principles for the sustainable development of financial investments.

Organization and Effective Management of a Company: The concept of a business organization should ideally be integrated with the operational management of the company from the very beginning of the business and should continue until the end. Business management that is flexible and responsive is a management that will be effective. The dynamism of employees and their adaptability is also a problem that is becoming increasingly important with globalization.

Corporate Philanthropy: With sponsorship, companies participate in the financing of associations and charities. Corporate philanthropy is defined as financial support or material, without direct compensation, brought by a company in favor of a cause of general interest. It can concern various fields such as education, research, humanitarian, culture, art, environmental protection.

Business Portfolio: These are all sectors of activity in which the company is present. These models are tools that are designed to help managers choose which business areas to retain. The purpose is to know whether the portfolio is balanced and which activity should be maintained or sold.

Sustainable Development: It is the use of resources that addresses human needs while preserving the environment, so that these needs are met not only for the present, but also for future generations.

Multilateral Development Institutions: They share a common mission to promote economic and social progress in developing countries by financing projects, supporting investments and generating financial resources for the benefit of the world population.

Multinational Corporation: When the company makes progress on internationalization to the extent that leads to foreign direct investment (FDI), it acquires a multinational character.

Human Rights: According to this concept, every human being—as such, and regardless of his social status—has rights inherent in his personality, irrevocable and sacred, and therefore contradictory in all circumstances of society and authority.

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