A Committee of Inquiry that presented to the British Government, yielded similar conclusions: The evidence stacks up to the point where any reasonable person must begin to ask what more might be required to demonstrate a binding cause and effect relationship between increased competitiveness and environmentally and socially responsible behavior (Committee of Inquiry Report to the British Government, 1999).
Society’s preoccupation with the social responsibility of organizations has existed since at least the early 1930s and probably even before this period. The infamous Dodd-Berle correspondence in the Harvard Law Review in 1931-32 is conventionally depicted as launching the academic-CSR debate (Wells, n. d. ).
This contention started when Columbia corporate law professor Adolf A. Berle Jr. published an article arguing for the imposition of legal controls on management so that shareholders alone would benefit from their decisions (Berle, 1931). E. M. Dodd, a Harvard professor, addressed this issue with an article countering the perspective that organizations existed for the exclusive reason of yielding shareholder profits and indicated that managers should take into consideration the interests of employees, consumers and the general public – these, in addition to the interest of the organization’s stakeholders.
Berle (1931) counter-responded with the charge that one could “not abandon emphasis on the view that business corporations exist for the sole purpose of making profits for their stockholders until such time as [one is] prepared to offer a clear and reasonably enforceable scheme of responsibilities to someone else” (Berle, 1932; p. 1365). Because it has been rooted from the legal community, the CSR debate has been a point of debate in several academic disciplines, with little discussion occurring between and among them (Radin, 1999).
Specifically, researchers in the field of business ethics have spent substantial effort in the past two decades trying to develop stakeholder theory, a subset of corporate social responsibility, as a separate approach to management. Of interest is the fact that not much interdisciplinary effort on the part of legal and business academics to develop CSR and stakeholder theories and concepts simultaneously. This may be accounted for by the fact that law academics, except for a group of ‘progressive’ scholars, do not frequently take CSR and stakeholding concepts seriously.
The topic was not academically discussed for some time after the Berle-Dodd debate. However, the discussion of CSR again surfaced with renewed popularity in North America in the 1960s and the 1970s, against the backdrop of the civil rights movement when concerns about the environment, product safety, workplace health and safety, racial and sex discrimination, urban congestion, political corruption, and technological advance rose to the top of the agenda of politicians, public interest groups, individual citizens and corporation.
The increasing influence and power of organizations during this period resulted in a widespread societal belief that large businesses had a duty to take part in the betterment of society (Banner, 1979). The power and influence of corporations, actual or perceived, and the impact of their economic, social, and political actions on society in general, have resulted in a broad societal expansion that corporations be accountable for their actions.
Put in simpler terms, there is a growing public sentiment that organizations have a responsibility to weigh the impact that their decisions have on the parties involved – and eliminate, minimize or compensate for the harm they may inflict on society. The justification for this expectation is partly derived from a moral position that corporations are and should behave like any other citizen in society, upholding ethical and moral responsibilities.
The expectation that organizations should be responsible for their impact on society is also justified on the basis that power has corresponding responsibilities. As Dodd (1932) asserts, “power over the lives of others tends to create on the part of those most worthy to exercise it a sense of responsibility. ”