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Encyclopedia of Business

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The article taken from the Encyclopedia of Business and called “Corporate Social Responsibility” touches upon a very urgent issue of corporate social responsibility. It takes into consideration the definition of the concept of corporate social responsibility and gives the arguments for and against it.

The recent trends of the development of a global economy show that more companies which work in the local markets and the companies considered as transnational corporations and working in the world markets actively introduce the standards of “corporate social responsibility” in their activities.

In brief, corporate social responsibility is a concept, according to which the organizations consider the interests of a society, incurring responsibility for the influence of their activity on customers, suppliers, workers, shareholders, local communities and other interested parties, and also on environment. This obligation is beyond the obligation established by the law to observe the legislation, and it assumes that the organizations voluntary take additional measures for the improvement of a life quality of workers and their families, and also local community and a society as a whole.

Social responsibility of business is a voluntary contribution of business to a society’s development to the social, economic and ecological spheres, connected directly with the primary activity of the company and beyond the minimum defined by the law.

In other words, social responsibility is not business obligation, namely responsibility for business consequences to a society. Using the principles of a corporate social responsibility in practice, the companies provide stability in the development by means of a risk reduction of loss of consumers through the realizations of the programs directed at their support; reducing personnel outflow, strengthening support of development and motivation of the personnel and improving management of human resources; smoothing negative attitude of the state or a policy to business by means of support of social programs of the state.

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