Corporate Social Responsibility as Business Strategy

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Four hundred years earlier, social responsibility shifted from the church to the state, as government replaced religious institutions as society’s predominant force. At the dawning of the twenty-first century, business appears the next likely candidate to carry this mantle.

Recent global protest activity, from the streets of Seattle in 1999 to the fences of Cancun in 2003, has been largely impelled by the social, economic, and environmental ‘externalities’ associated with economic globalization (that is, inadequate wages, poor working conditions, deforestation, general environmental degradation). A solution to these externalities being increasingly forwarded by business organizations is private sector self-regulation. Self-regulation – more popularly known as Corporate Social Responsibility (CSR) – is presented as a way to balance the interests of business and society without expanding government intervention in the global market place.

What exactly is Corporate Social Responsibility (CSR)? CSR is defined by Business for Social Responsibility, a global non-profit funded by corporations, as “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment” (2003, unpaginated). According to Jeremy Moon, Professor of Corporate Social Responsibility at Nottingham University,

Business social responsibility…refers to the voluntary contribution of finance, goods or services to community or governmental causes. It excludes activities directly related to firms’ production and commerce. It also excludes activity required under legislation or government direction (2002, 385-86).

The common thread that weaves through the various definitions of “Corporate Social Responsibility” is the voluntary nature of the good practices referenced. What makes CSR initiatives “socially responsible” is that they are not mandated by governmental or intergovernmental institutions — they are voluntarily pursued.

The most celebrated mechanism in the CSR toolkit, and my focus in this study, is the corporate code of conduct. The Organization for Economic Co-operation and Development (OECD) defines corporate codes as “commitments voluntarily made by companies, associations, or other entities, which put forth standards and principles for the conduct of business activities in the marketplace” (1998, 5). But how effective can voluntary and largely unverified corporate efforts to minimize market externalities be?