What is CSR?
The World Business Council for Sustainable Development (WBCSD) defines CSR as “the
continuing commitment by business to contribute to economic development while improving the
quality of life of the workforce and their families as well as of the community and society at large.”1
According to Bowen,2 ―CSR refers to the obligations of businessmen to consistently follow
and abide those policies to make decisions or to adopt those relations which are in accordance to
terms of the objectives and values of our society.
According to the United Nations Industrial Development Organisation (UNIDO)3, “Corporate
social responsibility is a management concept whereby companies integrate social and environmental
concerns in their business operations and interactions with their stakeholders. CSR is generally
understood as being the way through which a company achieves a balance of economic, environmental
and social imperatives (Triple-Bottom-Line Approach), while at the same time addressing the
expectations of shareholders and stakeholders. In this sense it is important to draw a distinction
between CSR, which can be a strategic business management concept, and charity, sponsorships or
philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will
directly enhance the reputation of a company and strengthen its brand, the concept of CSR clearly
goes beyond that.”
From the above definitions, it can be concluded that:
- The CSR approach is holistic and integrated with the core business strategy for addressing social
and environmental impacts of businesses. - CSR should address the well-being of all stakeholders and the society at large.
However many jurist are against the concept of social responsibility of corporate. Harvard
economist Theodore Levitt put it succinctly, “government’s job is not business, and businesses job is
not government”.4 In light of this controversy, the judicial authorities have time and again recognized
the responsibility of corporate sector towards society. The Michigan Supreme Court in the case of
Dodge v. Ford Motor Company5 held that Henry Ford owed a duty to the shareholders of the Ford
Motor Company to operate his business to profit his shareholders, rather than the community as a
whole or employees.
