Corporate Social Responsibility and Strategic Thinking

Under the influence of this principle, individuals in the business community increasingly decided to use some of their corporate power and wealth for the social good. These voluntary community obligations to improve, beautify and uplift were quite evident by many business leaders. One early example was the cooperative effort between the railroads and the YMCA immediately after the Civil War to provide community services in areas served by the railroads. Although these services economically benefited the railroads, they were at the same time philanthropic (Shalhoud, 1999). In another example, steel magnate Andrew Carnegie put much of his great wealth to work for education. Henry Ford adopted a paternalistic style of management and made recreational and health programs available to Ford employees. The company town was one of the most visible examples of paternalism. Although business’s motives for creating company towns (for example, the Pullman/Illinois experiment) were mixed, the business had to do a considerable amount of work in governing them (Shalhoud, 1999). Thus, the company accepted a form of paternalistic social responsibility. Over time, an increasing number of business leaders adopted and spread the idea that business has a responsibility to society beyond simply providing necessary goods and services.A second principle that shaped CSR is the principle of stewardship, which asserts that organizations have an obligation to see that the public’s interests are served by corporate actions and the way in which profits are spent. Because corporations control vast resources, because they are powerful, and because this power and wealth come from their operations within society, they have an obligation to serve society’s needs.