Corporate Social Responsibility

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Corporate Social Responsibility

The broadest definition of corporate social responsibility is concerned with what is - or should be - the relationship between global corporations, governments of countries and individual citizens. More locally, the definition is concerned with the relationship between a corporation and the local society in which it resides or operates. Another definition is concerned with the relationship between a corporation and its stakeholders.

According to the EU Commission, CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with the stakeholders on a voluntary basis. The central tenet of
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In it, he argued that individuals voluntary gave up certain rights in order for the government of the state to be able to manage for the greater good of all citizens.

More recently, the Social Contract has gained a new prominence as it has been used to explain the relationship between a company and society. In this view, the company has obligations towards the other parts of society in return for its place in society.

• Stakeholder Theory Stakeholder theory states that all stakeholders must be considered in the decision making process of the organization. There are three reasons why this should happen: 1. It is the morally and ethically correct way to behave. 2. Doing so actually also benefits the shareholders. 3. It reflects what actually happens in an organization.

According to this theory, stakeholder management, or corporate social responsibility, is not an end in itself but is simply seen as a means for improving economic performance.

• Classical Economic Theory Classical capitalism has been the basic inspiration for business. In this view, a business is socially responsible if it maximizes profits while operating within the law. Today the classical ideology still commands the economic landscape, but ethical theories of broader responsibility have worn down its prominences.
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