Social Responsibility Fundamentals

  1. The Meaning and the Importance of Social Responsibility concept

The need to define such a notion has sparked debates in the academic literature with different takes on the subject being recorded. It has been historically linked to the company role in the society, and thus recently is more known as Corporate Social Responsibility (CSR). The evolution of the concept of social responsibility is broad: from basic acts of charity to a more complex approach by drafting a company’s strategy regarding its impact in society and environment.

The social responsibility became core to business strategy. On one hand, the legitimacy of every company is given by meeting the expectations of a society in a given historical context. On the other hand, some authors, the most representative being Milton Friedman, underline the primary objective of every business, which is maximizing the profit; however this objective should be achieved by respecting the legal boundaries. Therefore, one possible definition of CSR is that it represents the actions that go beyond economical interests.

It is worth mentioning that this topic is not confined to the last decade, although it is quite recent that the corporate term has been added. A case could be made for the Industrial Revolution as a step in this development, even though the main concern of the time was the increase in workers’ productivity. However, other concerns began to be noticed regarding the working condition of people employed in factories, where the exploitation of women and children was not something unusual. This was the setup for the rise of notion of welfare, in which Jeremy Bentham [1] had an important part. While it started as a radical movement, the followers of Bentham became more moderate, although they managed to have an impact on society, in so far as the British government accepted their proposals.  Bentham also introduced the principle of greater happiness, as an action should be classified as good if it has a greater amount of positive effects than others. Obviously, the legislator has to have a role in this regard, since individuals are predisposed to pursue their own happiness, which can some time conflict with the general interest. On the other hand, the view advocated by people such as Milton Friedman is based on a contractual approach, as it upholds the interests of a limited number of individuals (the shareholders) as the priority of any organization.

At the same time, socialism and the trade-union movement were growing in strength. A reference in the analyses on the condition of the workers as a relevant issue in the socialist ideology is the work of Friedrich Engels: “The condition of the working-class in England” in 1844. Moreover, the practice of philanthropy starts to become more widespread practice even tough in other forms it had been used centuries before.  Thus, it can be conceived that social responsibility was a consequence of the social chances brought upon by the process of industrialization and can be linked with the emergence of the welfare state. Therefore it can be argued that, at least in the western society, CSR is not a really revolutionary concept.[2] Neither is the concept of corporation for that matter since entities such as the East India Company, which can be considered the predecessor of modern corporations, have existed since the 17th century. Therefore, charted corporations were early forms of corporations, besides artists and professional guilds. They were thus bided to follow the interest of community and, at least in the case of the United States, this could be revoked if they failed to do so.  However, basic forms of social responsibility can be found even in ancient times, especially in Greece. Even though it is a mythological source, one can remember the action the Prometheus in giving humans the gift of fire, thus playing the role of a benefactor.

Moral issues regarding trade and distribution of wealth do no start in this age, as critics on the subject can be traced to the medieval period. The power and influence of the Catholic Church is well known and its stance regarding business ethics and profit was critical, since an action was seen as righteous if it was made for the common good. Moreover, from a Christian point of view, wealthy individuals had a responsibility to help those less fortunate.  The emergence of corporations adhering to such philosophy meant giving back not only as charity but also in social services.

An important factor in the established of capitalism was revaluing self-interest, fact stressed by Adam Smith: It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages [3].  Therefore, the most efficient distribution of resources could only by obtained if every individual were to act in his own self-interest. In sharp contrast with Smith or Locke [4] who perceived that self-interest could be useful in the development of the society, Jean-Jacque Rousseau thought that active participation in public affairs could only bring unhappiness, as it was difficult to achieve the various desires arisen from the need to posses and to compare with others.

This is in contrast with later developments in views on business ethics such as Ayn Rand’s [5] philosophy of objectivism. With it, a change on the focus on the standard of ethical behavior is an essential part, as human life replaces common good or duty. Thus, each man’s life is an end in itself and not a means to the end of others.  Self-esteem is therefore the supreme value, while the notion of altruism is not only useless, it’s deemed as evil because it is the representation of a false morality. Even though individualism is applicable in business since in may involve risks taking, the ever increasing approach to the existence of corporations implies that they cannot justify their existence solely on maximizing profit to their shareholders.

The American society, subject to changes after the civil war and the reconstruction period, was the background for the emergence of another trait of social responsibility: volunteer action. Such an example could be considered the cooperation between railroads companies and other organizations [6] to improve community services in the areas that were served by railroads. Unethical business practices were not uncommon in that period, but the extent of backslash from the general public was significantly lower than it is today .The concept of social responsibility in this area of business was further developed in the American society in the 50’s with the publishing of the influential book “Social Responsibility of Business”, by Howard R. Bowen. According to the author’s vision, this concept was to be defined as the obligation of businessman to follow those politics, to take those decisions and implement those actions compatible with the objectives and values of the society [7]. On the other hand, in America, earlier attempts of defining such a notion were made, although it concerned the role of the press and not of corporations.  With the formation of the Hutchins Commission, it has been emphasized the necessity of upholding a responsible conduct by the press, considering its role in the development of society. Thus, the obligation of the press was considered not only those related to the professional conduct, but also improving the general quality in accordance with the interests of the society.

Obviously, after the first decades of the 20th century there is significant growth of interest in finding solutions to issues that go beyond direct financial goals of a company.


[1]  Jeremy Bentham( 1748-1832) was a British philosopher, jurist and social reformer. Regarded as the founder of Utilitarianism, some of his most important works include Introduction to Principles of Morales and Legislation and a Treatise on Judicial Evidence.

[2] Jeanette Brejning , Corporate Social Responsibility and the Welfare State: The Historical and Contemporary role of CSR in the mixed economy of Welfare, Ashgate, 2013, p.60

[3] Adam Smith, An Inquiry into the nature and causes of the wealth of nations, 1776

[4] John Locke (29 August 1632 – 28 October 1704) was an English philosopher known for his work in developing classical liberalism

[5] Ayn Rand (1905-1982)- Russian- born American philosopher and novelist known for advocating reason as the primary means of gaining knowledge, a philosophical system known as Objectivism

[6]  For example, the YMCA (Young Men’s Christian Association)

[7] Integrarea Responsabilitatii sociale in organizatie,  JCI Romania, Decembre 2013, Bucharest, p.7





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