Corporate Social Responsibility/Corporate
Is There a Difference and the Difference It Makes
PATRICIA H. WERHANE
I am honored to be included in this collection of challenging chapters on corporate social responsibility (CSR). Each offers insights that are important in this new century of corporate corruption and moral challenges, and I cannot do justice to any these worthwhile chapters by responding to each in detail. Rather, I shall take up the gauntlet in another way by asking a few questions. First, just what do we mean by CSR? Is it sometimes a fig leaf to distract us from investigating corporate misconduct? Does the term serve as an umbrella term to cover a number of related corporate relationships and alliances? Or is, in fact, the term referring to what I take to be the greatest challenge for companies today: the moral responsibility to create economic, environmental, social, and moral added value in an age of distrust and disillusionment about business?
Let us begin by tracing some early definitions of CSR. According to Davis and Blomstrom (1975), two of the early thinkers in this field, “[Corporate] social responsibility is the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests” (p. 23). A. B. Carroll (1979), often cited in this regard, expands this definition: “The social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that society has of organizations at a given point in time” (p. 500; see also Waddock, 2004, for a thorough summary of this literature).
The problems with the Davis and Blomstrom/ Carroll early definitions1 are twofold. First, there is an almost exclusive focus on business–society relationships, neglecting corporate relationships to their employees, customers, suppliers, and shareholders who directly account for and depend on company success or failure. Second, given these definitions, CSR has been sometimes misidentified with corporate discretionary responsibilities to the communities in which companies operate (e.g., philanthropy, charity, or community public relations). Companies that engage in such practices aim to be considered “socially responsible” despite what they do commercially in the marketplace. Enron, for example, was a large donor to the city of Houston and to a number of religious institutions to which its executives belonged. HealthSouth and its CEO were, and perhaps still are, the largest donors to city projects in Birmingham, Alabama. The Rigas family, founders of Adelphia Communication, gave millions of dollars to the city of Coudersport, Pennsylvania, its corporate headquarters while “borrowing” money from Adelphia after it was publicly traded. In every instance, these gifts covered up or sidetracked what these companies and their executives were doing: lying, cheating, and stealing from their shareholders and, as a