The fundamental principle of corporate social responsibility is based on the idea that not only public or government policy but companies too should take responsibility for different social issues where companies voluntarily integrate the social and environmental concerns into their business operations along with the interaction with their stakeholders. A socially responsible company should do more than to just comply with the law when investing in the human resources and environment and give back to the community in which it operates. 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 their stakeholders on a voluntary basis.”
Some people differ with the philosophy of social performance of a business is desirable and think that corporation should not be concerned with social responsibility. In line with the same idea, Milton Friedman, said that:
“There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
Some people believe CSR is conditional and in 2001, Mori being ambivalent said:
“Whether or not business should undertake CSR, and the forms that responsibility should take, depends upon the economic perspective of the firm that is adopted.”
The term Corporate Social Performance was first coined by Sethi in 1975, then expanded by Carroll in 1979 and finally refined by Wartick and Cochran in 1985. Sethi gave three tiers of behavior of CSR which are:
- Social obligation – a response to legal and market constraints
- Social responsibility – congruent with societal norms
- Social responsiveness – adaptive, anticipatory and preventive