MODELS OF RESPONSIBLE BUSINESS: CSR FROM SOCIAL AND ECONOMIC PERSPECTIVE
"Die first mentions of corporate social responsibility (CSR) date back to the turn of the 19th and 20th centuries and are closely linked to the philanthropic activities of large industrial tycoons (then corporations). One of such tycoons was Andrew Carnegie, who is considered as a precursor of CSR, primarily due to his considerations contained in the publication “The Gospel of Wealth” published in 1889 (Carnegie, 2012). His views were based on two principles: mercy and power. According to him, the principle of mercy requires happier members of society to support those less fortunate, including the unemployed, the disabled, the sick, and the elderly. In the case of the rule of ownership, the property of the entity was perceived as the property of the whole society entrusted to organizations for proper disposal, while enterprises should use it in a manner consistent with generally accepted social norms, that is, use only for purposes recognized by the society as legitimate (Stoner et al., 1999).
It is worth emphasizing that the development of the concept of responsible business had a great impact on the creation of agency theory in the 1930s by R. Coase (Jensen and Meckling, 1976). It implies the obligation of the so-called agent, who is a manager, another employee of the enterprise or an adviser, toward the principal, who in turn may be the owner or a senior manager. In this case, the goals of the agent and the principal can often be in a conflict of interest, for example, an employee expects more pay and the manager expects a higher profit for the organization (Fama, 1980). Therefore, a risk-sharing problem arises when the agent and principal have different views on decision-making and risk regarding the implementation of the task entrusted to them (Woloszyn, et al., 2012). The business entity should then seek to multiply profits as expected by shareholders, and also invest in human capital, ensuring the professional development of all its employees (Crane et al., 2008).
Taking into account the historical approach to the concept of social responsibility discussed, it is certainly possible to consider the beginning of the definition approach by the publication of H. Bowen’s book entitled Social Responsibilities of the Businessman in 1953 that is entirely devoted to these issues (Bowen, 1953). Through this publication, the author has clearly influenced the broader discussion about the responsibility associated with economic activity to such a level that Drucker (1998) began to wonder if American businessmen still have time to do business in their enterprises or they just deal with analyzing issues related to CSR. In his book, Bowen draws attention above all to the fact that all business decisions always have a direct impact on the lives of people in the society. This impact applies just to businessmen, shareholders, employees, clients, suppliers, or contractors in a direct and indirect way (Rogowski, 2016).
Tie main objective of this chapter is to present selected definitions of the CSR concept and to show responsible business models in terms of their implementation at the enterprise level.
Detailed objectives of the paper include the following:
- • Characteristics and evaluation of selected models of social responsibility in a social context.
- • Characteristics and assessment of selected CSR models in the economic aspect.
Selected CSR Definitions in the Light of the Literature
Considering the thorough analysis of the literature, attention should be paid to the variety of definitions presented, which is mainly due to the authors’ willingness to take into account its various aspects, such as social, economic, political, ethical, moral, or environmental. Other definitive approaches are also influenced by economic systems dominating in a given country, the law in force and determining permissible activities in the sphere of business activity, and the political situation prevailing in a given period determining the ethical level of enterprises.
As mentioned before, the first definition of CSR is considered to be Bowen’s proposal from 1953 - social responsibility is the responsibility of every businessman to pursue such policy, make such decisions, and strive for such actions that are desirable from the point of view of the set goals and social values (Bowen, 1953).
In the CSR definitions created in the 1960s, attention was paid mainly to the fact that the owner of an enterprise should predict the operation of the economic system and try to create close relations between the society and the organization for which he is to be responsible (Frederick, 1960; Walton, 1967).
The 1970s brought a very diverse approach to the definition of responsible business. On the one hand, the issues of profit and longterm business benefits were emphasized (Friedman, 1970; Ostlund, 1977), and on the other hand, attention was drawn to the need to increase the level of enterprise behavior to a level consistent with applicable standards, social values, and activities (Carroll, 1979; Davis, 1973; Sethi, 1975).
In the 1980s and 1990s, issues related to the role of stakeholder theory in the aspect of CSR, that is, employees, consumers, competitors, media, journalists, suppliers, government, associations, consumers, local communities, and business societies became key (Freeman, 1984), as well as a multidimensional approach to this concept, which makes it possible to combine the relationship between the principles of its implementation, a process based on social reactivity, as well as the organization’s policy and action plan designed to manage social issues (Wartick and Cochran, 1985).
In turn, after 2000, the concept of CSR began to be understood as activities that support social good and are expected to go beyond the interests of the company and legal obligations (Williams and Siegel, 2000); as striving to generate profit, comply with the law, ethical behavior, and acting as a “good citizen” in relation to stakeholders (Hemphill, 2004). The CSR concept takes into account four basic goals of enterprises: focusing on obtaining long-term profits, conducting business in a responsible manner, taking into account the expectations of society and contributing to the good of society through ethically correct actions (Garriga and Mele, 2004), and is a dynamic and intensively considered concept, embedded in social, political, economic, and institutional context (Crane et ah, 2008; Valor, 2005).
Weber (2011) stated in this period that the realization of profit of the enterprise should take into account the interests of all stakeholders. CSR models should be selected so that they maximize both business and social benefits.
Contemporary approaches to social responsibility indicate above all the connection between the implementation of the CSR concept in the network aspect and using modern IT tools, as well as using social media, and propose that it is implemented at the social level, that is, employed people and all directly related stakeholders (Hoivik and Shankar, 2011; Kim, 2017; Pana, 2013).