Corporate Social Responsibility: An Evaluation of Its Relevance in Current Business Environment in Australia - Research Paper Example

The financial market turmoil of 2007 and 2008 creates a global economic crisis that surpasses the Great Depression in severity and repercussions (Brunnermeier 2009). The global economic meltdown has affected not only the economy, but it has also fostered the impression that “business does not serve social interest but rather harms social good” (Lin-Hi 2010). Social distrust and skepticism towards organizations, profits, and business, in general, have reached new heights (Yandle 2010).

 In 2009, Edelman Trust Barometer claims that business has sustained a significant loss of trust all over the world. In this condition of eroding trust in business, the need to take a re-look at the existing relationship between business and society has to be undertaken.             Discourses pertinent to the connection between business and society, and values and morality within the economy have been heatedly debated (Campbell 2007) and one of the most important concepts that have been developed is corporate social responsibility (CSR) (Lin-chi 2010).

Corporate social responsibility is an ideal that is built on the notion of shared responsibility among individuals, organizations, and social institutions (Hemingway 2000). This creates a paradigm wherein the concept of shared responsibility moves beyond individual responsibility towards institutional and organizational responsibility. Thus, it establishes a network of individuals and entities in the society that can work together in addressing the social, environmental, political, and economic needs of the society (Dahlsrud 2008).

            In contrast, Milton Friedman (1970) claimed responsibility in CSR implies “ …responsibility to conduct business in accordance with their desires, which generally will continue to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom” (p. 2). In this case, CSR is considered as the enlightened self-interest and mangers are not moral agents, but are economic rational agents protecting the shareholders’ funds (Jensen 2001; Siegel 2009).