Shifting paradigms of corporate social responsibility

The form and content of the capitalist world economy is fast evolving and we find capital being increasingly concentrated and centralised as the battle of market competition intensifies. Companies have to keep running just to stay in the same place so intense is the competition. One of the factors that make the critical difference between the companies is the public perception of a business's value systems that are best exhibited by initiatives in discharging its Corporate Social Responsibility (CSR). However, there is a great deal of ambivalence and uncertainty about what CSR really means as well as what drives corporate to pursue it. We have undertaken a detailed literature review to delineate the various positions taken in understanding and explaining the concept of CSR especially how business relates to society and vice versa. In the process, we have examined the evolution of CSR and explained some of its critical facets. Then we have tried to relate these facets to the objective social reality, as we perceive it and posited our definition of CSR giving both the reason and rationality of what we say and why we say so. We have found that there has been a shift in the paradigms with both the academia and the industry moving from the altruistic standpoint to the strategic standpoint on CSR interventions.

The concept of Corporate Social Responsibility (CSR) in its present form originated in 1950's when Bowen, H. wrote a seminal book “The Social Responsibilities of a Businessman” whom Carroll takes to be the father of CSR (Carroll, 1999). Since then the notion of CSR has come to dominate the society-business interface and many theories and approaches have been proposed. Although the concept of CSR has dominated the business-society interface, many other alternative concepts have infiltrated the academic literature to study the same such as Corporate Citizenship, Corporate Governance, Corporate Social Responsiveness, and Corporate Social Performance. Even for CSR, many definitions have also been proposed in order to explain the form and the content. CSR has been a fuzzy one with unclear boundaries and debatable legitimacy (Lantos, 2001, Cramer et al., 2006).

Importantly, the approach to CSR has also changed from Agency theory to Stakeholder theory. The concept of CSR has a normative altruistic basis and the strongest indication comes from the terminology itself used to describe the concept (Corporate Social Responsibility) but current trends from both academia and industry strongly indicate a shift in paradigm from normative altruistic bias of CSR to positivist strategic orientation to CSR.

The purpose of this paper is to clarify the CSR concept while distinguishing it from other concepts having their genesis in business society interrelationship by offering a historical perspective on CSR and the debate preceding CSR, reviewing the different viewpoints on the role of business in society and what CSR actually means, delimiting CSR boundaries, and distinguishing two types of CSR: altruistic, and strategic, thereby establishing parameters for its practice. The paper also identifies and delineates the shift in CSR paradigms from altruistic to strategic orientation of firms towards CSR along with changing rules of the games and mechanisms of the market place.