Corporate Social Responsibility: Perspectives

Corporate Social Responsibility: Perspectives

“The modern large industrial corporation is in many respects a public institution….it holds power in trust for the whole community”. The quotation epitomizes the awesome power, influence and resources that the present day business corporation possesses, and the extent to which they can contribute to the society of which they are part of.

There are three emerging perspectives that inform corporate social responsibility:

Reputation Capital

This perspective recognizes the importance of reputation capital for capturing and sustains markets. Seen thus, corporate social responsibility is basically a new business strategy to reduce investment risks and maximize profits by taking all the key stakeholders into confidence. The proponents of perspective often include corporate social responsibility in their advertising and social marketing initiatives.

Eco-Social Perspective

The proponents of this perspective are the new generation of corporations and the new economy entrepreneurs who created a tremendous amount of wealth in a relatively short span of time. They recognize the fact that social and environmental stability and sustainability are two important prerequisites for the sustainability of the market in the long run. They also recognize the fact that increasing poverty can lead to social and environmental instability. Such social and political instability can, in turn detrimental to business. Seen from this perspective, corporate social responsibility is both a value and strategy to ensuring the sustainability of business. It is a value because it stresses the fact that business and markets are essentially aimed at the wellbeing of society. It is a strategy because it helps to reduce social tensions.

For the new generation of corporate leaders, optimization of profits is the key, rather than maximization of profit. Hence, there is a shift from accountability to shareholders to stakeholders. There is a growing realization that long term business success can only achieved by companies that recognize that the economy is an open subsystem of the earths ecosystem.

Rights based perspective

The third perspective stresses that consumers, employees, local communities, govt. agencies, regulators, suppliers and shareholders have a right to know about corporations and their businesses. Corporation is definitely a private initiative, but increasingly a public institution whose survival