Tracing the Journey from Berle-Dodd Debate to Modern Trends in CSR Adoption and its Impact on Business Ethics and Sustainability
Corporate Social Responsibility is not a new concept, but it has taken decades to become ingrained in the thinking and philosophies of corporate officers.
Today, Corporate Social Responsibility (CSR), also known as corporate citizenship, is a self-regulated business model focused on the “doing well by doing good hypothesis" (Broadstock et al., 2018). CSR aims to promote social good beyond what the law requires while minimizing negative impacts (Waldman et al., 2006; Bachrach et al., 2022).
The conversation around CSR has persisted since the Berle-Dodd debate in the 1950s (Macintosh, 1999; Ferrell et al., 2016). Adolf A. Berle, a lawyer who served in the presidential administrations of Franklin D. Roosevelt and Harry S. Truman, advocated for corporations to serve everyone in the economy. Merrick Dodd, a law professor, opposed Berle’s stakeholder theory and advocated for the shareholder theory.
Corporate Social Responsibility (CSR) has influenced investing since Howard Bowen, the “father of CSR,” introduced the concept in the 1950s. However, it gained momentum in the 1970s as social and environmental issues gained prominence.
Later, Freeman's book Strategic Management: A Stakeholder Approach (1984) defines stakeholders as “any group or individual who can affect or is affected by the achievement of the organization's objectives” (p. 46).
If this discussion has spanned nearly a century, then the question arises: Do current CSR trends indicate a greater willingness to embrace it in C Suites?
It is possible that the philosophies of conservative economists like Milton Friedman, who argued that corporations have a sole duty to their investors, still hold sway in boardrooms.
Regardless of economic views, it seems that CSR, or some form of it, is here to stay. Transparency is a crucial aspect of CSR, and many firms have embraced Environmental and Social Governance (ESG) practices. According to the U.S. Chamber of Commerce, 86 percent of companies in the S&P 500 voluntarily publish ESG reports (Swanek, 2019).
Over the past few decades, CSR has emerged as a megatrend due to voluntary adoption and regulatory pressure (Brockett & Rezaee, 2012; Jun et al., 2017). Legal obligations and ethical expectations sometimes diverge. Carroll (1979) described CSR as a set of obligations people expect companies to fulfill (Gong et al., 2022).
According to CSR Journal, a digital and print news publication by Research Rating and Communication Pvt Ltd in Mumbai, India, predicted trends for 2024 include climate and environmental stewardship, employee-driven philanthropy, impact and measurement reporting, with AI-powered tools playing a pivotal role in measuring the impact of social initiatives; Diversity, Equity, and Inclusion (DEI); and tech-driven philanthropy, a fusion of technology and philanthropy using AI.
Even Investopedia suggests that major national companies will embrace “acting locally” by recognizing the value of local markets and supply chains. Additionally, corporations may invest more in “green” technology.
Whether these predicted trends materialize in 2024 remains to be seen. Future studies will undoubtedly shed light on the trajectory of CSR in the near term. However, the existence of such optimistic predictions encourages the fostering of more ethical and transparent corporate behavior.
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