Why Do Companies Engage in Corporate Social Responsibility? Background, Reasons and Basic Concepts

This chapter provides some clarity in the understanding of the concept and a few yardsticks for navigating through the contemporary debate on corporate social responsibility (CSR) with all its fancy jargon and daily growing inventions of buzzwords. Companies have shareholders who demand a reasonable return on their investments, they have employees who want safe and fairly paid jobs, they have customers who demand good quality products at a fair price etc. This is by definition the reason why businesses are set up in society and thus a company’s first responsibility is to be a properly functioning economic unit and to stay in business. The advantage of the four-part model of CSR is that it structures the various social responsibilities into different dimensions, yet does not seek to explain social responsibility without acknowledging the very real demands placed on the firm to be profitable and legal.