What is Corporate Social Responsibility (CSR)?

What is Corporate Social Responsibility (CSR)?

Mass layoffs and record profits at the same time, manager salaries, scarcity of natural resources and imminent climate catastrophe, morally questionable advertising, child labor, corporate fraud, financial crisis and the “Occupy Wall Street” movement … These are just a few examples you may have heard about under the topics of sustainability business ethics or corporate social responsibility These themes raise questions about justice for current as well as for future generations. We want to ask corporate social responsibility –CSR for short– what is this? This man made headlines a few years ago. In 2004, Angelo Ugolotti learned from investigators that he was chairman of the board several companies set up by his employer, the Italian milk concern Parmalat. angelo however had not even heard of those companies. At Parmalat, he was responsible for the switchboard. You can imagine how the story goes. Corporate fraud at its best: bogus companies, cooking the books, bribery, accounts in the Cayman Islands — the whole works. The task of corporate social responsibility is to prevent these and other morally reprehensible practices which can weaken society, damage companies and hurt employees. More and more companies have realized the relevance of moral practices in their business; even though they have not always sufficiently
implemented CSR, yet. Concrete preventative measures are often labeled “risk management”, a term more commonly used for avoiding financial risks and damage to a company’s reputation. And no one likes bad press, right? Thus, companies define clear rules, so-called “compliance” or “value-management” systems. For example, you can accept a bottle of wine from the supplier, but you have to pass up a golfing trip to Hawaii. However, risk and compliance management are only one aspect of corporate responsibility correctly understood. Firstly, CSR is not just about preventing “bad practices,” like corruption and fraud and so on. Secondly, this approach does not question a company’s business activities, as such. In fact, compliance management could be an efficient control mechanism even in organizations like the mafia. The more challenging question is: How can companies contribute to a “good society” through “good business” practices? “Oh, that’s easy!” they say. We’ll create a charity foundation or donate a lot of money and, thus, “do good”. Wrong! That won’t hurt and may even help, but it is not systemic change. The important thing is: CSR is about how companies make profits, not about how they spend them. not about how they spend them. Corporate social responsibility must not simply be the “repair center” of capitalism. It has to demand systemic changes in a market economy. In part, this requires a new role for the key players in this game: companies must become moral, as well as economic, actors. What is required and important is a stronger integrative perspective based on a system of deontological values and which is closely related to the company’s “core business”. closely related to the company’s “core business”. This means social and ecological criteria must be taken into consideration, for example, in the treatment of employees, organization of the production process, offered and produced products and services and how they are marketed, and responsible business practices of suppliers, the so-called “supply chain”. By the way, virtuous managers or the “honorable merchant” alone will not suffice. We need employees of integrity at all levels of the company, but we also need organizational structures and clear rules. But relying on a code of conduct is also short sighted, because in extreme cases it means “act according to some given rules”, which is the opposite of ethical reflection, namely, actually thinking about good and evil, right and wrong. In other words: CSR is always about both individuals and institutional structure. In business ethics, one speaks of individual ethics and institutional ethics. But isn’t that unrealistic? Shouldn’t the state do more to promote a good and fair society? Granted. It is unrealistic and that’s exactly why such questions are important! Business ethicists don’t just ask what the world is like, but also what it should be like — how it ought to be. At the very least, we want to suggest where the journey should lead. At the same time, we want to make practical suggestions about how to embark on that journey. One speaks of questions of justification, on one hand, and of implementation, on the other — preferably in that order. The state, particularly through politics and law, can contribute to the implementation of corporate responsibility, but only within a limited range. If we look at society from a bird’s-eye view, we can spot different social systems: the economic system, the political system, the justice system, for example. One can speak of the “functionally differentiated” society we live in. About sixty or seventy years ago, some German economists came up with an idea that led to the development of the social market economy as we now know it, particularly in Europe. They thought that a market economy should be embedded in a political framework that determines the rules of the game. This underlying idea is still important, but it has become distinctly more difficult to rely on the state alone. Societal differentiation has progressed because most systems have internationalized. “Globalization” is the magic word that applies to most systems, but not all of them. Politics and, particularly, law tend to be bound to one country’s borders, while the economy, above all, is highly internationalized and globalized. This makes effective regulation difficult. Thus, it is now not only about the classic rules of the game, but also about the moves of the players, the corporations in a changed and changing world. And beyond politics and law, civil society — in particular NGOs — has gained a strong influence on the economy, as both vicious watchdogs and as partners of businesses. In 21st century society, we find new, rather odd — hybrid — constructs under the notion of “soft laws”. These are collective individual commitments to comply with certain social and ecological standards, such as collective industry agreements or the UN Global Compact. So companies are supposed to operate responsibly. Is anything really happening??? There’s no clear answer to that question. The cynics say that CSR is like teenage sex: everybody says they are doing it, but few actually are. And those who really do it, do it rather badly. ;-( The truth is more nuanced, of course: in the area of corporate responsibility there is also “the good, the bad and the really ugly.”

More and more companies deal with CSR and take the first steps towards responsible business practices. We can definitely observe a distinct effort, even though it is still a delicate little plant. And of course there are still those who misconstrue CSR as a PR instrument and simply want to “green wash” or “blue wash” their company. And, unfortunately, there are still companies that don’t give a s*** about questions of corporate responsibility, and which even trample on justice. Got all that? Let’s sum it up: First, CSR stands for Corporate Social Responsibility. Second, CSR is based on the question of “good business” for a “good society” — today and tomorrow. Third, Corporate Social Responsibility is not charity: it is about how companies earn their profits, not how they spend them. Fourth, it takes employees of integrity and appropriate organizational structures to realize CSR. It is a matter of individual and institutional ethics. Fifth, politics continue to play an important role, but in a globalized world the effects of regulation can be limited. And, thus, sixth, companies play an increasingly important role. Seventh, “soft laws” are new governance mechanisms based on companies’ self-commitment. Finally, eighthly, CSR has arrived in business practice. It is necessary to support these developments professionally, but also to provide critical perspectives with respect to them. Research on issues of corporate responsibility is still beginning and future developments will be exciting to see. It is unclear whether a good and fair society can be created with the help of companies. But it can’t be created without them. [wait! she is coming back…. ] Oh, we almost forgot: besides corporate responsibility, there’s also consumer responsibility. You can practice that the next time you go shopping, and there may be more from us on that topic.

100 thoughts on “What is Corporate Social Responsibility (CSR)?

  1. wrong, CSR exists because of consumer demand for better social outcomes from businesses. it is not that companies suddenly care more than profits but that they are pursing CSR because their consumers want to see that. any company that better satisfies the needs of their consumers will be more profitable. CSR is no different.

  2. Could u give me an example of good CSR programs for Power Plant company? We re not directly connected to community as consumer. My company's consumer is government.

  3. It is like he says the same theory over and over. Fkin annoying! Omg. Dislike video.
    Anyway, the chick is fine.

  4. this is what i need to know for my final exam tomorrow 🙂 thanks to everyone that worked hard to produce this amazing educational video.

  5. Looks like a good money. Start earning real money over the internet now SOCIALMEDIAMANAGER.ALLALLA.COM with facebook and twitter.

  6. Hello Claudia Amanda,
    feel free to embed or replay the video in your presentation.
    Thanks for spreading the word!

  7. More! Love the style of presentation and length. Could you manage to upload 2nd and 4th grade curriculums in this style please?

  8. Hello,
    It's a really good video. Very clear ! I'm in charge of CSR in a entreprise and I would like to use this video for my colleagues. Can I use it ? Can I translate in french ?
    Thank you very much,

  9.  If you don't want to comply with CSR, you can always do what the big boys are already doing, and move shop overseas to china and india to maximize ROI. Cheap labor, exploitation of the environment, corruption via bribes and away you laugh it all the way to the bank. welcome to Capitalism where money talks and bullshit walks. forget ethics, its about the money.  People love money and things and will use people to get it.

  10. Sorry, but this video seriously confuses the concept of CSR with Business Ethics. They are NOT the same concepts.

  11. What does he say at 3:56?
    Ontelogical or Tautological or Tauontelogical or some other word?

    I'm having a tough time working it out and what exactly is meant there.
    "Ontelogical" would seem to fit in terms of meaning but I really thought I heard a "t" at the beginning!

  12. Quite an awful video. It goes too fast, the cartoons are distracting and seriously…?teenage sex is comparable to Corporate Social Responsibility? What the hell were you thinking when you decided to add that in?

  13. Talking about CSR… could the Univ. of St Gallen stop using that much paper in their presentations? I mean, the girl draws a question mark and then instantly discharges the paper, wtf??

  14. Here an interesting article about Corporate responsability in International law: https://aninternationallawblog.wordpress.com/2015/03/23/corporate-social-responsibility-human-rights-a-critical-review-of-the-guiding-principles-on-business-and-human-rights-for-implementing-the-un-protect-respect-and-remedy-frame/

  15. CSR is vital to any business plan. It is the way of the future! These days, sustainability is becoming a bigger topic and companies, if they are already not doing so, should shift focus towards the idea.

  16. Hi!
    Is there any transkription of this video? Probably I would understand more 🙂 Eh my english is not so perfect 🙂

  17. One of the best presentations I have ever seen! Such a wonderful video making skills and amazing editing work done.

  18. India, Being The BIGGEST CSR HUB On The PLANET, The Entire Globe Is CLOSELY Monitoring The Impact Of CSR Initiative In India….

  19. CORPORATE SOCIAL RESPONSIBILITY is very great initiative by india. world should adopt the same for compassionate and loving society.

  20. Great video! Love the comment about not wasting so much paper haha. However, if you are interested in CSR and how to go about it check out "CSV" (creating shared value) by Harvard Business Review (https://hbr.org/2011/01/the-big-idea-creating-shared-value). If you are a University student like myself, most of you can access it for free. In short, CSV takes over where CSR ends. It is about being responsible for you action, integrate the society and environment but in the same time leverage it to your firm advantage. In my 4 years in collage this is the best article I have read. (Not too long either 😉 )
    / Felix Persson, collage student and business owner

  21. Liked the video. But the amount of paper used/wasted on it really stung. You could try a white board, or turning the page. 🙂

  22. Please also check out our more practical perspectives on CSR: https://www.youtube.com/watch?v=l9IyDvkxADU

  23. Let The Manadatory CSR Spending Be Authentically Follwed By The Corporporates, Multinationals & PSUs In India…….

  24. society is the group of human beings. one is dependent on others. as the human beings the basic needs are to be fulfilled for survival. everyone should work for others needs to meet our own needs. all our needs cant be met by our own. social responsibility is let live concept. if one lets others live we can get our needs met. this universe is giving all the needs to us in its form. we are converting this universe to meet our needs to live as human being. no doubt for this one has to work for others. we are using the nature for our needs but we are not giving anything to it. give to nature it certainly never fails giving to us.

  25. Does that mean that charity is not a part of CSR (at all)? Since there are many companies that present their charitable actions as a part of their corporate social responsibility.

  26. – – – we have done enough good work on this old colleagues – – – especially our brother moon hats off to you – – – this is an element, if done properly in the business school, will make our students broad minded, practical and will also give great leads to their career entries to the corporate world – – –

  27. CSR = leading the way to NWO, by creating a socialistic-corporatism. A society, created with no borders and no eventual government or limited government interference, under the guise of "good-will". You do not fool me, I've played enough FF-7 to know where this is going, ShinRa Inc, Umbrella corporation, Omni (Robocop) and other movies.

  28. Anyone know what song this intro music is based off of? I know I've heard that tune somewhere before.

  29. there's nothing more morally repugnant, more monopolistic, and more responsible for 100's of millions of deaths than…government. Gov't takes your money at gun point, sends you to war to kill and be killed for political aspirations and every year creates more controlling laws that always take away your freedom. and you can't say " I don't want to buy from you" Govt is the worst offender of social responsibility.

  30. "About 60 or 70 years ago Some German Economist came up with an idea". Don't you think that is somewhat superficial information, espcially coming from a university source?

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