CSR | Corporate Social Responsibility – Social contract approach

Social contract approach

Social contract approach is the perspective that a corporation has an obligation to society over and above the expectations of its shareholders.

Prior years, the primary focus of the social contract was an economic one, assuming that continued economic growth would bring an equal advancement in the quality of life.

The modern social contract approach argues that since the corporation depends on society for its existence and continued growth, there is an obligation for the corporation to meet the demands of that society rather than just the demands of a targeted group of customers.


Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility – Strategic CSR

Strategic CSR

Strategic CSR is a type of philanthropic activity which targets programs that will generate the most positive publicity or goodwill for the organization.

By supporting these programs, companies can claim to be doing the right thing and they also can meet their fiduciary obligations to their shareholders.

Critics can argue that strategic CSR is ethically commendable because these initiatives benefit stakeholders while meeting fiduciary obligations to the company’s shareholders.


Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility – Instrumental approach

Instrumental approach






















































Instrumental approach is the perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs of its customers.


Most famous advocate of this “classic” model is the Nobel Prize-winning economist Milton Friedman. 


Friedman argues it would be unethical for a corporation to do anything other than deliver the profits for which its investors have entrusted it with their funds in the purchase of shares in the corporation.


Friedman also argues that, as an employee of the corporation, the manager has an ethical obligation to fulfill his role in delivering on the expectations of his employers.


Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility - Altruistic CSR

Altruistic CSR 


















































Altruistic CSR takes a philanthropic approach by underwriting specific initiatives to give back to the company’s local community or to designated national or international programs.


Critics argue this type of CSR is immoral since it represents a violation of shareholder rights if they are not given the opportunity to vote on the initiatives launched in the name of corporate social responsibility. 


Relative legitimacy of altruistic CSR is based on the argument that the philanthropic initiatives are authorized without concern for the corporation’s overall profitability.


Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility - Ethical CSR

Ethical CSR 






















































Ethical CSR represents the purest or most legitimate type of CSR in which organizations pursue a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to do the right thing for all their stakeholders.


Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility 2 | Discuss the difference between ethical, altruistic, and strategic types of CSR

Discuss the difference between ethical, altruistic, and strategic types of CSR. 


















































Ethical CSR pursues a clearly defined sense of social conscience in managing a company's financial responsibilities to shareholders, its legal responsibilities to its local community and society as a whole, and its ethical responsibilities to do the right thing for all of its stakeholders.


Altruistic CSR takes a philanthropic approach underwriting specific initiatives to give back to the company's local community or to designated national or international programs.


Strategic CSR include philanthropic activities targeted toward programs that generate the most positive publicity or goodwill for the organization.


Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility 1 | Why is the failure of the public sector a major trend behind the CSR phenomenon?

Why is the failure of the public sector a major trend behind the CSR phenomenon?


















































Many, if not most, developing countries are governed by dysfunctional regimes. Developing countries alone do not suffer from public sectors. In the United States and in other developed countries, citizens expect less of government than they used to, having lost confidence in the public sector as the best or appropriate venue for addressing growing lists of social problems.


Source: Ghillyer_Business Ethics A Real World Approach 2e