Corporate Social Responsibility (CSR)

In recent years, CSR has become very topical and both scholars and managers have paid greater attention to its notion.


Milton Friedman (1970) an economist declared that the only social responsibility of the corporation is to increase profits which  makes perfect business sense to investors.
For the many other stakeholders such as customers, employees, suppliers and the community however,  businesses are expected to give back to the communities in which they operate.
 Most businesses today however acknowledge the view of other stakeholders, and the most predominant position is an increase in profits in compatibility with social responsibility.
What the majority of approaches to understanding CSR have in common is that they all acknowledge that companies have responsibilities towards the society and environment that go beyond their own interests and legal obligations (de Bakker Groenewegen and den Hond 2005).
There are three levels of impact:


• Basic level - company adheres to societies rules and regulations

• Middle level - companies are perceived to manage their activities so they adhere to their level and go beyond it

• Societal level - makes a significant contribution towards improving the society in which it operates
Corporations need to be demonstrating their positive impact on society and CSR is a means to achieving this goal.


Research shows that key stakeholders such as consumers, employees and investors are increasingly likely to take actions to reward good corporate citizens and punish bad ones.

By being a good corporate citizen, a company can foster consumer loyalty and turn consumers into company/brand ambassadors and champions who engage in advocacy behaviours (such as positive word of mouth, willingness to pay a price premium and resilience to negative company news Du et al 2007).

Not only does CSR result in consumers buying more products but it also encourages other stakeholder behaviours such as employment seeking with the company and investing in the company.

Also companies  increasingly obtain public recognition and visibility for their positive corporate actions.