Corporate Social Responsibility Research Paper Starter

Corporate Social Responsibility

Corporations have engaging in corporate social responsibility activities that portray them as caring and contributing members of the communities in which they are located. To understand why corporations would be interested in taking such actions, and why the public appears a bit skeptical toward such activities, one needs to have some understanding of how corporations have evolved in American society. This article provides a history of corporations and discusses whether corporations have been more favorably socialized into American culture and communities.

Keywords Agrarian; Capital Venture; Capitalism; Countervailing; Deregulation; Outsourcing; Public Good; Sustainable Development; Trickle-Down Theory

Work

Overview

Today, corporations across the United States are heavily involved in activities promoting corporate social responsibility. Corporate social responsibility is a relatively new concept in which the corporation strives to be fair and responsible to all of its stakeholders. The identified stakeholders typically include shareholders, employees, and the communities in which physical facilities are located (European Commission for Sustainable Development, 2008). Corporate social responsibility is now included as a section in almost every American corporation's annual report to shareholders and espouses the ability of the company to create and maintain sustainable development. Corporations are spending time and money to create codes of conduct that are used to guide them toward fulfilling their identified social responsibilities (Mehta, 2002).

Corporations have engaging in corporate social responsibility activities that portray them as caring and contributing members of the communities in which they are located. To understand why corporations would be interested in taking such actions, and why the public appears a bit skeptical toward such activities, one needs to have some understanding of how corporations have evolved in American society. This article provides a history of corporations and discusses whether corporations have been more favorably socialized into American culture and communities.

History

The Corporation

Early corporations were very different from the corporations of today. They were small companies chartered by the English crown to accomplish specific activities meant to serve the public good. The first acknowledged corporation, the East India Trading Company, was chartered to enable participation in the East Indian spice trade as a capital venture. Incorporating and funding innovative companies became a favored activity of royalty. They were able to dabble in many activities and explorations by chartering new corporations and retaining governance over them (Robins, 2006). If a company displeased their king or queen, their charter would simply be revoked, meaning the entrepreneurs no longer had permission to engage in business.

With the founding of the United States, states assumed the right to charter and govern similar corporations. These corporations were explicitly designed to serve the public in instances when a smaller business would lack the resources to meet public demand. Banks were often created under a corporate charter in order to establish adequate funding. Most Americans were still living in agrarian communities and all corporations were explicitly required to serve the community. Corporations at this time (early 1700s to mid-1800s) were limited in their activities and dealings: they were not allowed to own stock in other corporations; they were limited in the amount of time they could exist; they were not allowed to make political contributions; and their owners were held responsible for criminal acts committed by the corporation (Drutman & Cray, 2004). Governments provided oversight for corporations and did not hesitate to revoke the charter if the corporation failed to serve the public interest. Also, unique to the early corporations, the owner actually ran the corporation and maintained responsibility for the day-to-day happenings of the business. Corporations quickly altered the way people worked and were instrumental in leading America into the industrial revolution.

In 1819, the Supreme Court decided the case of Dartmouth College v. Woodward, providing corporations protections against government takeovers. In the late 1800s, New Jersey was the first state to enact the General Revision Act, which removed time limits on corporate charters as well as requirements that limited a corporation’s size and market share. Other states quickly followed suit, including the state of Delaware. Delaware went one step further and established the Court of Chancery to handle business affairs. This enabled corporations to create cultures in which they could amass wealth and power. As of 2012, nearly half of all US public corporations were incorporated in Delaware.

Corporations quickly became dominant American institutions and the Roosevelt and Wilson administrations, recognizing the potential power of the corporations, enacted antitrust laws and initiated regulations to control the industry. Presidents succeeding Roosevelt and Wilson loosened up on corporate controls and encouraged businesses to grow in size and power. In 1886, corporations won a landmark case, Santa Clara v. Southern Pacific Railroad. This ruling allowed corporations to be viewed as actual individuals under the law, providing them all the protections listed in the Bill of Rights as though each corporation was a real person. In 1919, in Dodge v. Ford Motor Company, the Supreme Court ruled that the unequivocal purpose of the corporation is to serve stockholders. Hence the generation of profits for stockholders became the primary goal and sole purpose of corporations (Kelly, 2001).

Capitalism

During this same time many corporations began merging. Corporations were no longer small, simple entities; they had quickly grown into very private, very large entities with little legislated responsibility or accountability. Their primary mission was to engage in self-interest and accumulate resources that could be utilized to enhance profit-making activities (Green, 2002). It was believed that capitalism would provide essential controls and the free market would curb corporate greed and promote the public good. Corporations were successful in their mission; however, the free market was not allowed to work due to the policy changes promoted and attained by the wealthy corporate owners and shareholders (Bakan, 2004; Kelly, 2001).

Up to that point in time, the owners ran their corporations and invested in the communities in which they were headquartered. But as the corporations grew, gained their own rights to personhood, and amassed greater wealth and power, the owners began to hire managers so they would have time to pursue personal interests and to influence policymaking in ways that would allow their corporations to grow even more (Drutman & Cray, 2004). Managers were not vested in the corporation nor the community, and corporations began to take on the reputation of being cold-hearted and corrupt.

No one really gave a thought to how to socialize these new, powerful entities that had been granted personhood. No one could conceptualize how these new institutions would amass wealth and power greater than small nations. No one seemed concerned that the only goal these corporations had was to continue to acquire more and more profits for their shareholders. And corporations continued to enrich their shareholders at the expense of their employees and the communities in which they located their factories. Minus socialization efforts, corporations were akin to spoiled children unfettered by self-discipline or notions of ethical behavior and unaccountable to the society in which they existed.

The Great Depression brought some new checks and balances to corporate systems as government created their own national work...

(The entire section is 3512 words.)

Corporate Social Responsibility

This article examines the evolution of corporate social responsibility. The driving forces behind the corporate shift toward responsibility are examined including regulatory issues, social and political activism, marketing, and consumer pressure. The role and activities of several organizations that focus on corporate social responsibility are reviewed. The process of shareholder activism in pushing for corporate social responsibility is explained along with how the shareholder processes work. Reasons for failure in corporate social responsibility campaigns are also reviewed and issues with global efforts clashing with local efforts are explained.

Keywords:...

(The entire section is 4576 words.)