CSR beginnings
Another week, another intrusion.
The intention for last week was to publish the continuation of corporate social responsibility (CSR) as a derivative of corporate governance, but the bad happened when the writer couldn't salvage a circumstance to bring you the regular piece.
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After three articles on the relationship between corporate governance and ethics, it is prudent to break the monotony and shift the focus to the other part or component of corporate governance, corporate social responsibility (CSR).
Expansive history on CSR exists, albeit decorated or labelled as corporate citizenship, sustainable business, corporate responsibility and corporate social performance because it brings to the attention of the public social and ethical issues that help to frame the relationship between society and business organisations.
Significantly, the identification and practise of CSR emphasise the consequential antidote to distrust, doubt, distortion, deception, and disclosures, but it all began with the entire population being exposed to a variety of scandals and the reporting of these stories is underscored by criticisms of various actions, decisions, and practices on the part of business leaders.
Social Initiatives
Although the 1950s are widely recognised as the decade that witnessed the birth of CSR, significant development had occurred before to that period to predict the concept's current direction.
Certain behaviours and practises from the industrial revolution may provide some indication of how far the ideas have advanced.
The time was focused on how to make employees more productive by employing the industrial system, which was seen to have generated several issues for established and rising economies such as child labour, labour unrest, slums and poverty, among other things.
Industrialists such as John H. Patterson launched welfare programmes as part of the industrial betterment / welfare movement to contribute to humanitarian and philanthropic activities that benefited both the company and society.
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Among these were lunch rooms, clinics, profit sharing and recreational amenities.
However, whether the decisions to include such support packages were commercial or social in origin remains unclear.
So, individuals such as Cornelius Vanderbilt and John Rockefeller labelled the “robber barons” for their shady deals, were influenced by the above situation to eventually turn to philanthropy as a way of redeeming their image with society by becoming patrons of the arts, financiers of church construction, benefactors of educational institutions, and providers of social amenities.
People handled a variety of socially responsible situations as follows:
• R.H. Macy who contributed funds for orphan asylum
• Pullman Palace Car Company - built a town with standard housing, lighting and maintenance
• Young Men’s Christian Association - offered social responsibility initiatives
Although the preceding behaviours indicated socially responsible behaviour, the credible way to gaining a charter in the 1800s was to be socially helpful. Charters, like other things, had fallen in value following the civil war since they were available under any commercial cause and were difficult to invalidate.
Meanwhile, big businesses with government backing began to control the economy, producing a corporate ruling elite with nearly unlimited authority.
So, with this power, the “robber barons” were created, whose power was corrupted and who were despised by the government and fellow citizens.
Then came the now-familiar circumstances in which these leaders’ cartels and trusts disregarded market pricing regulations and even defrauded stockbrokers.
According to Ebertstadt, “business might never have turned back towards responsibility and accountability if the culmination of corporate irresponsibility had not been the collapse of the economic system.”
Then, their activities triggered the Great Depression, which resulted in widespread unemployment, corporate failure, and a post-Depression period that shepherded the next commercial and societal relationships.
Scholars believe that period was the “profit maximising management” stage of social responsibility.
According to scholars, Robert Hay and Ed Gray, the second stage of the business-society relationship in the 1920s and 1930s, named “trusteeship management,” saw corporate managers taking responsibility for both maximising stockholder wealth and creating equitable balance among competing claims such as claims from customers, employees, and the community.
The managers were now considered as “trustees” for distinct business groups rather than as agents of the corporation.
According to Hay and Grey, this step was prompted by modifications related to:
• the growing spread of stock ownership
• a more progressive pluralistic society.
Philanthropy
Corporate contribution, often known as philanthropy, has taken centre stage in the evolution of CSR.
There was a pre-legalisation phase of corporate contribution, according to Sophia Muirhead; 1870s-1930s: the pre-legalisation period of corporate contribution
1900: Corporate contributions were seen negatively.
So, corporate contributions were officially limited to causes that promoted the corporation, with the majority of them being linked to World War I, such as the Boy Scouts, Salvation Army, and United Way Campaign.
Companies, like governments, have been considered as entities with social responsibility from the 1930s to the present.
Businesses that stood up to anti-communist organisations were seen as socially responsible in the 1940s.
Prior to the 1950s, there were a number of prominent publications on social responsibility, such as
• The functions of the executive (1938)
• Social control of Business (1939)
• Measurement of social performance of business
On a more realistic level, Fortune magazine asked business executives about their social duties as early as 1946.
• The writer is a journalist whose primary interest are minimalism, sustainable business, photography, society and culture, sports and tourism.
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