Corporate Social Responsibility

Corporate Social Responsibility (CSR) refers to the activities undertaken by businesses that go beyond merely generating economic value and also entail responsibility toward society, the environment, and other stakeholders. Through CSR, businesses do not merely aim to achieve profit but also assume responsibility as agents to enhance societal well-being, ensure environmental sustainability, and act in accordance with ethical principles. Today, CSR has become a critical element for the sustainable success of businesses and is widely adopted by companies both locally and globally.

History of the CSR Concept

The concept of Corporate Social Responsibility (CSR) began to emerge in the 1950s and was first comprehensively addressed by Howard Bowen in his article titled "Social Responsibilities of the Businessman." Bowen argued that businesses have a responsibility to society that extends beyond mere legal obligations.

From the 1960s onward, the CSR concept began to be recognized as one of the key functions of business management, and the social responsibilities of firms were discussed in a more comprehensive manner. The development of CSR gained momentum with the rise of corporate awareness and consumer consciousness, particularly as large corporations started to adopt this responsibility as a strategic tool.

Dimensions of CSR

CSR is generally defined by four key dimensions:

• Economic Responsibility: The primary objective of businesses is to generate profit. This dimension refers to the company’s provision of products and services that meet societal needs and create economic value.
• Legal Responsibility: Businesses must comply with legal requirements and regulations in their operations. This responsibility plays a vital role in ensuring justice and order within the workplace.
• Ethical Responsibility: Businesses should not only fulfill legal obligations but also act in alignment with societal ethical values and expectations. Ethical responsibility ensures that corporate activities are consistent with social values.
• Philanthropic Responsibility: Businesses are expected to voluntarily contribute to society. This is demonstrated through social aid initiatives, environmental projects, support for cultural activities, and similar efforts.

Advantages and Disadvantages

Advantages

CSR enhances a company’s credibility in society and increases customer loyalty. It also leads to positive outcomes such as the minimization of environmental impacts and the enhancement of social benefits. Companies that adopt CSR practices are better able to recover during crises by building strong ties with the community. Moreover, operating in alignment with ethical values improves employee satisfaction and internal motivation.

Disadvantages

The initial costs of implementing CSR practices can be high. Businesses may be required to allocate significant resources to fulfill their social responsibilities. Additionally, the benefits of CSR initiatives may be long-term and limited in immediate impact. Therefore, for some businesses, CSR practices must be transformed into a long-term strategic approach.

CSR Models and Practices

CSR can be implemented through various models and strategies. These models determine how a company fulfills its responsibilities to society and in which areas it should demonstrate engagement. One of the most well-known and widely used CSR models is Carroll’s CSR Model. Carroll defines CSR in four layers:

1. Economic Responsibility: The obligation of businesses to generate profit and use that profit for the benefit of society.
2. Legal Responsibility: The requirement for businesses to comply with legal regulations and frameworks.
3. Ethical Responsibility: Acting in accordance with societal ethical values.
4. Philanthropic Responsibility: The voluntary participation of businesses in social responsibility projects.

In addition, Stakeholder Theory recommends that businesses, when formulating their CSR strategies, should act in consideration of the needs of all stakeholders. Stakeholders include not only shareholders but also employees, customers, suppliers, communities, and the environment.

CSR and Strategic Management

CSR should be integrated into a company’s strategic management processes. CSR practices must align with the organization’s long-term objectives and contribute to its sustainable growth. Companies that treat CSR as a strategic tool can increase their market share, build brand loyalty, and achieve long-term profitability while fulfilling their social responsibilities. Furthermore, CSR activities enhance the company’s overall image and generate positive shifts in public perception.