Corporate Social Responsibility, or CSR, is a movement within the business world that advocates a larger ethical and social role for corporations. Boards of directors structure corporations to maximize profits for their shareholders, and as a result, according to advocates of CSR, they frequently exploit or neglect the larger community and the natural environment. People who make CSR guidelines design them to amend this problem and to transform large companies into productive corporate citizens who contribute in positive ways to the community.
CSR emphasizes the responsibility of corporations to return some of their wealth and success to the communities that support them. Poverty afflicts many of the developing countries where multinational corporations employ people in their factories. Problems also exist in the communities in North America where many corporations have their corporate headquarters. Given their wealth, social influence and contacts within government and business, corporations can make a difference for people in need by contributing to efforts in education, employment training, prison diversion programs, drug counseling and small business startups. The theory of CSR argues that the companies themselves will benefit from these activities by helping to create stable and thriving communities that benefit everyone.
The natural environment is the source of all wealth, and those making the wealth have been badly abusing it for centuries. Vast forests fall for timber, cattle ranching and slash and burn agriculture. Human activities pollute rivers and air and increasing temperatures eat away at the polar ice caps. Companies that engage in CSR recognize that their wealth and success are at least partly to blame for this damage, and contribute money, time and knowledge to alternatives such as renewable energy, conservation and non-polluting alternatives.
The employees who work for a company are the ones who directly produce its wealth. In some companies, collective bargaining agreements protect their interests, while in others they do not. CSR recommends that companies fairly remunerate employees for the efforts that they put into the success of the company. Equitable packages for employees include fair pay, benefits, paid vacations and pension plans. Just as importantly, workplaces should be healthy and safe places that don't subject workers to unregulated toxins or dangerous conditions.
Corporations have a responsibility to provide their customers with well made, reasonably priced products that perform as advertised. Corporations that engage in price fixing or monopolistic practices attempt to unfairly limit the choices of the buying public, and CSR discourages these practices. In many cases, they are also illegal. A corporation that conforms to the dictates of CSR attempts to earn its profits by providing useful products and services to a community, rather than by maximizing its profits at the expense of exploited consumers.