The Importance of Corporate Social Responsibility and Its Limits

By de-los Angeles Gil Estallo, Maria; de-la Fuente, Fernando Giner et al. | International Advances in Economic Research, August 2007 | Go to article overview

The Importance of Corporate Social Responsibility and Its Limits


de-los Angeles Gil Estallo, Maria, de-la Fuente, Fernando Giner, Griful-Miquela, Carles, International Advances in Economic Research


Abstract Companies are, in a broad sense, a group of different agents that have a relationship with shareholders, citizens, providers, and customers. In other words, they are known as stakeholders. Corporate social responsibility may help to establish clear boundaries among the different interests of the groups described above. In this paper, the authors will describe, analyze, and formalize the critical responsibility parameters, as well as the variables that shape them. Corporate social responsibility is proposed as a new management tool and not as a fashionable concept. Furthermore, the advantages and limitations of corporate social responsibility will be analyzed in order to define a management model for achieving responsibility among organizations. Finally, the model limitations are presented, both in the verbal and the mathematical formalizations.

Keywords Corporate social * Responsibility management

JEL M00

Antecedents and Commitments

Corporate social responsibility is becoming a relevant subject, and it appears repeatedly in the vast majority of academic and professional journals. Most of them have dedicated a special issue to it, and an increasing number of articles have been published concerning corporate social responsibility. In this paper, the authors ask themselves whether this is simply a new fashionable concept, as many others within the business argot, or, on the other hand, is it becoming a leading principle of top management and entrepreneurs' behavior.

In the first part of this paper, different dilemmas concerning corporate social responsibility are analyzed, and the authors' perception about it is depicted. Then, the authors will describe a method for measuring and evaluating corporate social responsibility, as well as its limitations.

Corporate Social Responsibility Understood as a New Management Tool

In order to develop this proposal, it is necessary to define corporate social responsibility. It is very important to thoroughly understand the concept of company, not from a macroeconomic point of view as the economic science does (specially the neo liberal trend), but from the business economy point of view.

Figure 1 represents--graphically and briefly--the concept of a company as many business economists see it: this is a company understood as a transforming organ, thanks to social agents (people) and technical and technological means, all of them working in a global and competitive context. By looking at this concept of a company, the following is always present:

* People/human beings: employees, shareholders, providers, collaborators, customers, competitors, and public agents (local, state, or federal).

* Context: the company develops its economic activity in a geographical area, within an economic, social, and political context.

At this point, a question emerges: does the company, or even better, the company's top management have any responsibility--implication or commitment--concerning the people and the context where they develop its activity?

It is fair and reasonable--following the trend of those who consider shareholders as the main human collective concerned--that top management within the company has to work driven by shareholders interests, mainly focusing on the profit and loss account, trying to maximize profits (Gil 2003, p. 51). In other words, "If management would accept the idea that they have a social responsibility different from achieving the maximum profit for shareholders, it would be undermining the foundation of our free society" (Milton Friedman 1966, p. 173). (1)

This point of view can be confusing for two reasons:

1. It does not take into account the fact that in order to make a profit, all the people described before have to cooperate and perform their activities within a geographical space, regardless of its size. If certain aspects are not attended to and if there is no responsibility toward these collectives, a sustainable profit will not be reachable.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Importance of Corporate Social Responsibility and Its Limits
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.