Corporate social responsibility standard - Pros and Cons

This paper deals with the concept of CSR and its standards. First the concept of CSR is described. Then some common CSR standards are introduced and characterized. In the last part of this paper the advantages and disadvantages of Corporate Social Responsibility Standards will be discussed and assessed. 

The Appendix contains an overview of different Corporate Social Responsibility Initiatives, Codes and Standards. 'There is one and only one social responsibility of business - to use it 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.' 

According to Friedman there are no reasons for businesses for social engagements. Such activities rather contradict to the real purpose of a company that is the maximization of the shareholder value. The abatement of social problems and difficulties lay in the hands of the state and the society themselves, so Friedman, also because they can address these issues more efficient. 

Do businesses therefore not have any social responsibilities, should they really not operate social? This mindset changed in the last years and the concept of Corporate Social Responsibility (CSR) of companies became more important worldwide in the areas of economy, society and politics in recent years. A lot of incidents like corruption and accounting affairs, nontransparent management compensations, mass layoffs despite increasing profits, questionable production and employment methods in subcontracting firms or hygienic impairment of consumers did shake tremendously the confidence of the people in the economic system. Socially acceptable and environmentally compatible actions beyond governmental regulations shift into the focus of the people again. 

Corporate Social Responsibility describes the actions of organizations and especially corporations which contribute to the good of their stakeholders that are its employees, customers, shareholders, the environment and the society as a whole. The upcoming belief that corporations have a greater responsibility to civil society than merely generating profits has put pressure on them to integrate social and environmental considerations into their business models.