What is CSR Behavior?

Corporate social responsibility has been discussed and researched for more than three decades. However there is no consensus on what constitutes corporate virtuous behavior, and there is no uniform definition of the notion.

CSR has been described as a value-laden concept wherein “corporate social responsibility and value representation concerns are not about whether values, but whose and what values, are represented in business decisions." CSR has been practiced in response to three main forces: societal demands, the desires of influential stakeholders (e.g., investors), and the ability of such activities to increase competitiveness and stock performance.

According to Carroll, the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time. This definition suggests that CSR embraces the range of economic, legal, ethical, and discretionary actions and obligations that directly or indirectly affect the future economic performance of the firm (see Figure 1.1). Carroll suggests a hierarchy wherein discretionary issues that appear abusive may become ethical considerations. Allowed to continue long enough or over a large enough number of potential claimants and ethical issues may become legal ones. At the extreme, this hierarchy of CSR issues can eventually lead to economic impact, whether by formal societal restraints (such as laws or regulations) or less formal consumers.

Figure 1.1. The Pyramid of Corporate Social Responsibility

Carroll, A. B. (1991). The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons. 34(4):39-48.

Legal compliance is a necessary minimum condition for CSR. But, legal compliance does not assure that the firm’s actions will be seen as ethical or proper. Often, actions that were legal—even socially tolerated—may become unacceptable, even illegal, in a different time or place. For example, consider the history of race or gender based discrimination. Both were widely accepted by society in the 1940s and 1950s. But, with the greater political activism of later years, these widespread practices were increasingly seen as unethical, until eventually they became illegal through legislative actions and court interpretations.

Most recently, Werther and Chandler defined the concept as “responsibility among firms to meet the needs of their stakeholders and a responsibility among stakeholders to hold firms to account for their actions.” This definition is more comprehensive because it emphasizes the reciprocal role of stakeholders holding firms to account.

CSR is, therefore, a fluid concept. Importantly, it is both a means and an end. It is an integral element of the firm’s strategy, a way of maintaining its legitimacy in the larger society by bringing stakeholder concerns to the foreground. At the same time, a firm’s CSR reflects how well it is able to navigate stakeholder concerns while implementing its business model. CSR means valuing the inter-dependent relationships that exist among businesses, their stakeholder groups, the economic system, and the communities within which they exist. CSR is a means of discussing the obligations a business has to its immediate society; a way of proposing policy ideas on how those obligations can be met; as well as a tool by which the mutual benefits for meeting those obligations can be identified. Simply put, CSR addresses a company’s relationships with its stakeholders.