This document defines and discusses the concept of corporate social responsibility (CSR). It provides several definitions of CSR from different sources that generally portray CSR as operating a business in a socially and environmentally responsible manner that meets ethical standards and stakeholder expectations. The document traces the origins and development of CSR from the 1950s to the present. It also outlines some of the main arguments for why CSR is important for businesses, such as risk management, human resources, and brand differentiation.

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CSR is understood to be the way firms integrate social, environmental and economic
concerns into their values, culture, decision making, strategy and operations in a
transparent and accountable manner and thereby establish better practices within the
firm, create wealth and improve society. CSR is also called Corporate Citizenship or
Corporate Responsibility.
The 1950s saw the start of the modern era of CSR when it was more commonly known as
Social Responsibility.
In 1953, Howard Bowen published his book, “Social Responsibilities of the
Businessman”, and is largely credited with coining the phrase ‘corporate social
responsibility’ and is perhaps the Father of modern CSR.
Bowen asked: “what responsibilities to society can business people be reasonably expected
to assume?”
Bowen also provided a preliminary definition of CSR: “its refers to the obligations of
businessmen to pursue those policies, to make those decisions, or to follow those lines of
action which are desirable in terms of the objectives and values of our society“.
According to Business for Social Responsibility (BSR) “Corporate social responsibility is
operating a business in a manner which meets or excels the ethical, legal, commercial and
public expectations that a society has from the business.”
Business entity is expected to undertake those activities, which are essential for betterment
of the society. Every aspect of business has a social dimension.
Corporate Social Responsibility means open and transparent business practices that are
based on ethical values and respect for employees, communities and the environment. It is
designed to deliver sustainable value to society at large as well as to shareholders.
Corporate Social Responsibility is nothing but what an organisation does, to positively
influence the society in which it exists. It could take the form of community relationship,
volunteer assistance programmes, and special scholarships, preservation of cultural
heritage and beautification of cities.
The philosophy is basically to return to the society what it has taken from it, in the course
of its quest for creation of wealth.
With the understanding that businesses play a key role of job and wealth creation in
society, CSR is generally understood to be the way a company achieves a balance or
integration of economic, environmental, and social imperatives while at the same time
addressing shareholder and stakeholder expectations.
According to CSR Asia, a social enterprise, “CSR is a company’s commitment to operate in
an economically, socially and environmentally sustainable manner whilst balancing the
interests of diverse stakeholders”

2. CSR is generally accepted as applying to firms wherever they operate in the domestic and
global economy. The way businesses engage/involve the shareholders, employees,
customers, suppliers, Governments, non-
Governmental organizations, international organizations, and other stakeholders is usually
a key feature of the concept. While an organization’s compliance with laws and regulations
on social, environmental and economic objectives set the official level of CSR performance,
it is often understood as involving the private sector commitments and activities that
extend beyond this foundation of compliance with laws.
According to the Commission of the European Communities, 2003, “CSR is the concept
that an enterprise is accountable for its impact on all relevant stakeholders. It is the
continuing commitment by business to behave fairly and responsibly and contribute
to economic development while improving the quality of life of the work force and
their families as well as of the local community and society at large.”
According to the World Business Council for Sustainable Development, 1999
“Corporate Social Responsibility is the continuing commitment by business to behave
ethically and contribute to the economic development while improving the quality of
life of the workforce and their families as well as of the local community and the society at
large.”
CSR is a concept whereby companies integrate social and environmental concerns in their
business operations and in their interaction with their stakeholders on a voluntary basis.
The main function of an enterprise is to create value through producing goods and services
that society demands, thereby generating profit for its owners and shareholders as well as
welfare for society, particularly through an ongoing process of job creation.
However, new social and market pressures are gradually leading to a change in the values
and in the horizon of business activity.
Essentially, Corporate Social Responsibility is an inter-disciplinary subject in nature and
encompasses in its fold:
1. Social, economic, ethical and moral responsibility of companies and managers,
2. Compliance with legal and voluntary requirements for business and professional
practice,
3. Challenges posed by needs of the economy and socially disadvantaged groups, and
4. Management of corporate responsibility activities.
CSR is an important business strategy because, wherever possible, consumers want to buy
products from companies they trust; suppliers want to form business partnerships with
companies they can rely on; employees want to work for companies they respect; and
NGOs, increasingly, want to work together with companies seeking feasible solutions and
innovations in areas of common concern.
CSR is a tool in the hands of corporates to enhance the market penetration of their
products, enhance its relation with stakeholders. CSR activities carried out by the
enterprises affects all the stakeholders, thus making good business sense, the reason being
contribution to the bottom line.

3. The term Corporate Social responsibility refers to the concept of business being
accountable for how it manages the impact of its processes on stakeholders and takes
responsibility for producing a positive effect on society.
CSR is not Philanthropy
Philanthropy means the act of donating money, goods, time or effort to support a charitable
cause in regard to a defined objective. Philanthropy can be equated with benevolence and
charity for the poor and needy. Philanthropy can be any selfless giving towards any kind of
social need that is not served, underserved, or perceived as unserved or underserved.
Philanthropy can be by an individual or by a corporate.
It is the active effort to promote human welfare.
Corporate Social Responsibility on the other hand is about how a company aligns their
values to social causes by including and collaborating with their investors, suppliers,
employees, regulators and the society as a whole. The investment in CSR may be on people
centric issues and/ or planet issues.
A CSR initiative of a corporate is not a selfless act of giving; companies derive long-term
benefits from the CSR initiatives and it is this enlightened self interest which is driving the
CSR initiatives in companies.
CSR is a contract with society
It is the duty of company to undertake CSR activities because company and society are
mutually interdependent on each other. No corporation in the present world of
globalization, liberalization can bear to have an indifferent attitude towards the society,
isolated existence is not possible.
According to Sir Adrian Cadbury (2002) - “The broadest way of defining social
responsibility is to say that the continued existence of companies is based on an implied
agreement between business and society.
In effect, companies are licensed by society to provide the goods and services which society
needs. The freedom of operation of companies is, therefore, dependent on their delivering
whatever balance of economic and social benefits society currently expects of them.
The problem for companies is that the balance of needs and benefits is continually
changing and there is no generally accepted way of measuring those changes.
To start with, companies are expected to meet society’s demands for goods and services, to
provide employment, to contribute to the exchequer, and to operate efficiently at a profit.
There is no conflict between social responsibility and the obligation on companies to use
scarce resources efficiently and to be profitable – an unprofitable business is a drain on
society. The essence of the contract between society and business is that companies shall
not pursue their immediate profit objectives at the expense of the long-term interests of
the community.

4. ARGUMENTS FOR CORPORATE SOCIAL RESPONSIBILTY
Human Resources Corporate Social Responsibility can be an important aid to recruitment
and retention, particularly within the competitive graduate market. CSR can also help to
build a ‘feel good’ atmosphere among existing staff. • Risk Management Managing risk is a
central part of many corporate strategies. Reputations that take decades to build up can be
ruined in hours through incidents such as corruption scandals or environmental accidents.
These events can also draw unwanted attention from regulators, courts, governments and
media. Building a genuine culture of ‘doing the right thing’ within a corporation can offset
these risks. • Brand Differentiation In crowded marketplaces companies strive for ‘X
Factors’ which can separate them from the competition in the minds of consumers. Several
major brands, such as The Body Shop are built on ethical valu