A brief about three theories of CSR.

1. ©Dr. Madhavi Peddada 2022 All rights reserved

2. 1. Dangers of Social Responsibility
2. Theory of Capitalism
3. Trusteeship

3. Mr. Theodore Levitt, Professor at Harvard Business School known for
coining the term Globalization.
Criticized CSR for being in the corporate objective function.
According to Levitt CSR is a fashion accessory of self-interested
businessmen who have in mind neither the health of the business nor the
welfare of the society but are driven by their own political agenda or self-
realization.

4. CSR is seen as profit-making strategy by business
Responsibilities of public and private sector should be kept separate
Mangers playing the role of CSR is unethical as they have no expertise
According to Levitt, an ethical approach to CSR is to pursue CSR only when it
is profitable, and admit that profit is the real motive behind any CSR activity. If
the managers assume any role other than that of profit makers, they are
bound to fail.

5. Mr. Milton Friedman, economist Nobel Prize winner
CSR in his book entitled, “Capitalism and Freedom,” 1962 & an article in
New York Times,
“There is one and only one social responsibility of business — to use its
resources and engage in activities designed to increase its profits so long as
it stays within the rules of the game, which is to say, engages in open and
free competition without deception or fraud.”

6. According to Friedman, Business is socially responsible for to only one
group i.e., shareholders. Shareholders are the economic engine of an
organization.
Corporate executive is an employee spending company money on ‘social
cause’ is in fact spending somebody else’s money.
Customers, shareholders and employees should separately spend their
money on CSR

7. Mr. Mohandas Karamchand Gandhi, the leader of the nationalist
movement Believer that everything belongs to God and hence to everyone
and not to any particular individual.
Bringing economic equality through non-violent social change
Gandhian philosophy ???
Proposed trusteeship as a way to bring economic equality through non-
violent social change

8. According to Gandhi, peaceful removal of economic inequalities is possible
if the rich, after meeting their reasonable needs, hold the surplus wealth in
trust for society. In this way, the rich man is not dispossessed of his surplus
wealth, but he is required to use this wealth in the broader interest of the
community, and not in his personal interest.