The Existentiality of Corporate Social Responsibility (CSR)

As I began working as a CSR consultant, I have met with stiff resistance and unnecessary arguments about the concept of corporate social responsibility and the social contract. Critics of CSR argue that the social contract is a "fiction”, an intangible notion but I argue for the existence or existentiality of the social contract. The social contract exists and functions as a conceptual and analogical system.

The emergence of CSR as an issue for business today is as result of the enormous and rapid changes in society that have occurred of late. Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts.  Important as well in this discourse is how they manage relationships within the business sphere: the workplace, the marketplace, the supply chain, the community, and the public policy realm.  Arguing about the existence of CSR is like arguing if businesses exist in the first place because the social contract is the prerequisite for the very existence of businesses.

Another group asks the question: “are businesses social institutions?” basing their arguments on the claims of the Economist Milton Friedman - that the corporation has few, if any explicitly social responsibilities. Friedman's position is captured in his pronouncement that "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" (Friedman 1983).

My answer also begins with a question – “do businesses operate within a social environment or do they operate in the abstract?”  The issue of the social nature of businesses is central to the character and extent of business responsibilities to society at large. Businesses exist within a society and as part of a society.  They exist because of what analyst will call “a social permission” or “public license”.

Businesses have great influence to effect change in society and this can be attributed to the fact that since business decisions can bring about consequences that bear on the interests of others, businesses must think about their social responsibilities.  Businesses that foster a good community within the workplace and respect the social community on the outside can make possible the moral development of both employees and society.

The existence of CSR within organizations must go beyond sustainability reports and awards. I am led to conclude that given the social nature of business, corporations, their owners, managers, and directors are to be encouraged to leave behind the antediluvian and deficient vision of the corporation as a narrowly economic, private institution, and to situate this new vision within their business strategy. Once this conceptual move is made, more extensive social responsibility for the betterment of all, including businesses, will follow.