Fast Company

A Definition of Corporate Social Responsibility

Your comments were interesting -- thank you. I thought before going any further that it would be important to give you my definition of corporate social responsibility.

I think that responsible business is different from all other trends because at the most fundamental level it is responsive to significant changes in the macro-economic environment (the planet and all who inhabit the planet). I don't think it is driven by a desire to develop a new way to beat the competition or maximize profits, rather it is based on a compassionate and value-based response to all the challenges facing society.

Further, I don't think that business from here on out can afford to not be responsible. I think the costs for not being responsible are too high.

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6 Comments

  • Rob

    People often make a huge conceptual mistake about capitalism - that the goal of a company is to maximize profit (or long-term shareholder value, whatever). But really the goal can be anything the owners want. Most people want money, but if you want to start a company to do social good and make a small profit, that still fits within the capitalistic framework. I think companies do society a huge benefit when they maximize their economic value because they are providing output that is greater than the sum of their inputs and we all benefit from that. I believe companies have to address the negative externalities that come from their operations, but this can be a slippery slope. Where do you draw the line between what a company is or isn't responsible for? I don't think companies should practice CSR just to appease special interest groups, Marxists, and other people who have no appreciation for the power of capitalism.

  • david

    I think investors and other stakeholders would value a standard. Otherwise CSR opperates in a universe resembling Alice in Wonderland. And becomes PR and 'spin'.

    Peter... bingo.

  • Peter Rees

    Jeffrey,
    I missed your definition of CSR.

    I don't think, "[...] responsible business [...] at the most fundamental level [...] is responsive to significant changes in the macro-economic environment [...]" (although an edited quote, I think it is the intended message) - fits the bill.

    Kirsten seeks a standard ... I think investors and other stakeholders would value a standard. Otherwise CSR opperates in a universe resembling Alice in Wonderland. And becomes PR and 'spin'.

  • Bill O'Brien

    Corporate responsibility to society is as any stakeholder. It is value based in that it treats the individuals within the firm as equal and apports the dignity of the human spirit with equanity.
    The corporation has the responsibility to act accordingly under the law. It has the responsibility to ethically conduct itself as a contributor towards the quality of life of its own stakeholders.
    This is a cost that should be ioncurred as a price of doing business. The government should not hand out credits in the form of tax reliefs or any way that corporations "profit" from being socially responsible. That would be similar to a tax credit to individual taxpayers every year as long as they stay out of jail!!
    Corporations MUST see the necessity of behaving ethically and positively contributing to quality of life as a responsibility. It should be viewed as a cost of doing business and a fee to participate under U.S. Commerce law.

  • david

    I'm not sure if any company can be truly socially responsible under your definition.

    I'm not saying capitalism and altruism are mutually exclusive.

    What I'm saying is that at some fundamental level the market (shareholders, competition, etc.) force companies to choose maximizing profits and increasing marketing share over acting in a compassionate and value-based manner.

    That's just capitalism.

    What we're searching for is a larger shift in the forces that act on the market - a shift in public opinion and values that gives a value to things like caring for the planet and those who live on it over increasing shareholder value. I'm not sure we're there yet. Maybe in our lives or our childrens' lives we'll be forced in that direction.

  • kirsten

    Hi Jeffrey:

    I've been waiting with baited breath to ask you this question...apologize if I am jumping in too soon.

    Aside from accreditation programs like Investment in People (IIP), there really is no system which "accredits" companies as SOCIALLY RESPONSIBLE. It has been suggested that it is only a matter of time before someone invents a CSR management standard. What are your thoughts about a standard? Is it feasible? Who decides? Or is IIP enough?