What is Corporate Social Responsibility?

Corporate Social Responsibility (CSR) is commonly considered to be a practice in business ethics, or philanthropy. While it is true that CSR commonly incorporates both of those things, in practice it is not limited to them. In fact, CSR also has to consider economics and legal practices in their day to day considerations of CSR. To put it simply, CSR is a practice that is used by businesses of all sizes to ensure that their actions are benefitting all stakeholders of a company: employees, consumers, executives and the environment. CSR includes economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility.

Economic Responsibility

A businesses economic responsibility is best defined as it’s responsibility to growth and profit. While that was once the only consideration that those in business had to consider, rapid growth of nationally recognized corporations forced the government to impose legislation that would force businesses to recognize their impact on other areas (the Environmental Protection Agency, for instance). While those programs are necessary and have made a significant positive impact on CSR, there is still the underlying responsibility to perform economically. Therefore, one of the most basic tenets of CSR is the economic responsibility to create a product or service that is widely accepted, thereby earning a decent enough profit to be able to abide by the other three tenets of CSR.

Legal Responsibility

Anyone starting a business has a basic legal responsibility to conduct business in a manner that abides by the rules of the land. The legal aspect of CSR is in place to ensure that companies abide by responsible business practices. Laws regulate the competition, environmental impacts, protect consumers, and promote safety and fairness.

Ethical Responsibility

Ethical Responsibility is where a large part of social responsibility comes into play. Businesses have the opportunity to make decisions every day about things that are not currently regulated by government. At times there will be a clear distinction between what is ethically right, and what is in the best interest of the company. For instance, a national coffee chain choosing to use ethically sourced coffee, versus the alternative. It may be more cost effective for them to choose the alternative method, but choosing the ethically sourced coffee is better for the environment and the people native to those regions. Ethical responsibility takes into consideration what is best for the environment, what is best for the workers, and what is best for their community. A company in Arizona, for example, had many of its employees located in a small suburb outside of their city. During the day a fire broke out near the suburb, causing many of the affected employees to be issued evacuation orders. However, the company would not allow the employees to leave to secure important belongings and transport family members without filing paperwork stating that they were taking leave for the time they would miss that day. Despite being evacuated, they were expected back at work the next day. This company failed to ethically take care of its employees.

Philanthropic Responsibility

Commonly associated with CSR, philanthropic is beneficial for both the company and the community. Philanthropic measures can be as small as sponsoring a local little league team, or making a large donation to a fundraising organization. Some companies encourage their employees to part by donating money, or even time to these events. In some cases, companies provide their employees with paid time off in order to dedicate time to certain philanthropical efforts. Philanthropic efforts tie companies to their communities, help employees feel good about their involvement with the company, and add to a company’s advertising efforts.

CSR is multi-faceted and should play a significant part in corporate long-term strategy.


Learn more from other feature courses

Learn more about eCommerce