Corporate Social Responsibility (CSR) is a term describing a company’s obligation to be accountable to all of its stakeholders in all its operations and activities with the aim of achieving sustainable development not only in the economical dimension but also in the social and environmental dimensions.
A company’s stakeholders are all those who are influenced by and can influence a company’s decisions and actions, both locally or globally. Business stakeholders include (but are not limited to): employees, customers, suppliers, community organizations, subsidiaries and affiliates, joint venture partners, local neighborhoods, and the environment.
Today’s heightened interest in the proper role of businesses in society has been promoted by increased sensitivity to ethical issues. Issues like environmental damage, improper treatment of workers, and faulty production leading to customers inconvenience or danger, are highlighted in the media. Government regulation regarding environmental and social issues has increased. Investors and investment fund managers have begun to make investment decisions based on social sustainability as well as pure economics. Consumers have become increasingly sensitive to the social performance of the companies from which they buy their goods and services. This accumulation of industry forces pressure firms to operate in an economically, socially and environmentally sustainable way.
Typically, this is done by spending money on community improving projects, endowing scholarships, and/or encouraging workers to volunteer (blood drives and reading programs are common examples). For many corporations, community outreach programs create good will in the community. This can indirectly increase revenue.
However, the mission of a socially responsible organization is to take into account the full scope of their impact on communities and the environment when making decisions, balancing the needs of stakeholders with their need to make a profit. This holistic approach to business regards organizations as full partners in their communities, rather than measuring them solely on the basis of products and profits.
The McDonald's Corporation established the Ronald McDonald House. (However, the McDonald's Corporation has been criticised by CSR campaigners for unethical business practices, and was the subject of a decision by Justice Roger Bell in the McLibel case which upheld some of these claims, regarding mistreatment of workers, misleading advertising, and unnecessary cruelty to animals.)
