CSR is the continuing commitment by business to behave ethically and contribute to economic

development, while improving the quality of life of the workforce and their families as well as of the
local community and society at large.

1) Social Obstruction - an organization does as little as possible to solve social or environmental

problems. When the organization crosses ethical or legal lines that separate acceptable from
unacceptable, the response is to cover up or deny their actions.

2) Social Obligation - an organization will do everything that is required of it legally, but nothing
more. This position is consistent with the arguments used against social responsibility. The major focus
is on profit maximization.

3) Social Response - an organization meets its basic legal and ethical obligations and also goes
beyond social obligation.

Such companies voluntarily agree to participate in social programmes, but someone has to knock on
their door; they will not proactively seek avenues for contributing.

4) Social Contribution - this is the highest degree of social responsibility. Such an organization is in
favour of the arguments for CSR, views itself as a citizen in a society, and proactively seeks opportunities
to contribute to the society.

Managing Social Responsibility

The demands for CSR placed on organizations by an increasingly sophisticated and educated public,
demands that organizations need to fashion an approach to social responsibility, in the same way they
develop any other business strategy. CSR requires careful planning, decision making, consideration and
evaluation. This can be accomplished through formal and informal dimensions.

A firm must consider its responsibilities to its stakeholders (PEEL): These responsibilities are:

Philanthropic – it must be a good corporate citizen. Philanthropy involves the giving of funds or
other gifts to charities or worthy causes.

Ethical – it must always employ ethical behaviour, and desist from unethical practices. Ethical
compliance is the extent to which an organization and its members follow basic ethical standards of
behaviour

Economical – it must be profitable

Legal – it must obey the law. Legal compliance is the extent to which an organization conforms
to local, regional and international laws

Relevance of CSR in Contemporary Business

A firm should ask itself some core questions when practising CSR in relation to its stakeholders:
 Who are our stakeholders, and what stakes do they have in the company?

What opportunities and challenges do stakeholders present?

What economic, legal, ethical, and philanthropic responsibilities does our firm have?

What strategies or actions should our firm take to best manage stakeholder challenges and
opportunities?

Organizational leadership and culture can go a long way in defining the social responsibility stance an
organization and its staff will adopt. This introduces the concept of whistle blowing; an employee’s
disclosure of illegal or unethical behaviour on the part of others within an organization.

CSR must be inherent in an organization’s objective strategy. If a firm is not concerned with bottom line
issues, it cannot implement social responsibility. The company must make a profit before it can
contribute to society. While Friedman (1970) subscribes to a market capitalism view that “there is one
and only one social responsibility of business….to increase its profits,” very little reflection is needed to
see where profit seeking unhampered by any other consideration would lead.