The Role of CSR in Organizational Performance - Dissertation Example

The concept of corporate social responsibility (CSR) can be traced back to the 1950s with definitions of the term expanding over the course of the 1930s (Okoye 2009, p. 613).  By the 1990s, CSR has come to be synonymous with corporate social performance, stakeholder, and business ethics theories (Carroll, 1999, p. 268). Cumulatively, the development of CSR has come to mean that organizations have an implicit duty to advance social interests and not merely the organization’s interest and that which is legally required (McWilliams, and Siegel, 2001, p. 117).
Regardless, CSR not only conflicts with organizational interests but also presents several conflicting interests among the wider group of stakeholders. For instance, CSR requires that organizations take account of the interests of a variety of groups such as consumers, government, employees, community organizations, and other stockholders (McWilliams, and Siegel, 2001, p. 117). Thus there are two sides to the argument relative to the role of CSR in an organization’s performance. On the one hand, it is argued that organizations suffer losses when they adopt CSR standards since this incurs financial costs for the organization that does not accrue to organizations that do not adopt CRS strategies. On the other hand, it is argued that the cost of CSR is minimal when one considers the boost to “employee morale” and therefore “productivity” (McGuire, Sundgren, and Schneeweis, 1988, p. 854).
Some theorists maintain that today’s organizations cannot be competitive and cannot produce optimum results if they do not implement CSR strategies into corporate governance standards and practices. Other theorists maintain, the organizations are only required to maximize profits within the limits of the law and by doing so, they can remain competitive (Turker, 2008, p. 189). Empirical research studies are mixed in that they are divided along outcomes demonstrating negative, positive, and neutral performance results for organizations that implement CSR strategies (McWilliams, and Siegel, 2000, p. 603).