Oliver Sheldon started the concept of corporate social responsibility in the 1924. It is an internal company arrangement that dictates the company’s plan in respect to the society. It is a philanthropic principle that the company directors have to initiate through a set of operations for the society’s welfare. This helps the humanity in various ways, educating them, train, and assist on issues, which can transform the fate of generations to come.
There are two dimensions of social responsibility; the classical dimension and modern dimension. The classical dimension states that social responsibility of a business involves the use of resources in a given way, which generates maximum profits under any circumstances and cost. Under such a view, employees are treated as objects who work under very strict rules and regulations with strict controls and decisions under that view are at the extreme end of egoism. Under the modern view the business, engage in activities which should be beneficial to the organization but also beneficial to the surrounding community and thus you have to generate enough profits for the organization and allocate to activities of improving the welfare of the society (Banerjee, 2007).
Corporate responsibility can take several forms. These can take the form of economic responsibilities that are also called the profit maximization-view as advocated by Milton Friedman. Other considerations under CSR include legal responsibilities, ethical responsibilities and discretionary responsibilities. The legal responsibility is what the community deems essential in relation to appropriate corporate behavior. The government, local councils and regulating agencies, impose these. Ethical responsibility, on the other hand, is behavior that is not essentially codified into law (David Crowther, 2004). Ethics in an organization will call for decision makers to act in fairness, equity, and respect personal rights. Discretionary responsibilities are voluntary and driven by company’s desire to make social assistance that is not mandated by laws, economics, or ethics. This includes philanthropic contributions and goes beyond the expectations of the community to contribute to its welfare.