CSR has evolved over the 20th century from being rejected by businesses to becoming widely accepted. [1] The 1919 Dodge v. Ford Motor Company case established that a business's primary responsibility is to provide profits to shareholders. [2] However, in the mid-1900s figures like Donald David began calling for businesses to support social causes beyond shareholders. [3] While opponents like Friedman argued for a conservative view of profit-maximization, CSR is now commonly practiced and expected of businesses globally.

1. History of CSR
After being attacked and rejected by business leaders for decades, the notion of
CSR has suddenly become a central facet of the modern corporation: “Corporate
social Responsibility (CSR) has been transformed from an irrelevant and often
frowned-upon idea to one of the most orthodox and widely accepted concepts in
the business world during the last twenty years or so” (Lee, 2008, p. 53).
Dodge v. Ford Motor Company
The CSR debate entered the courtroom in 1919 with the Dodge v. Ford Motor
Company court case, which concerned the proper role of business. The majority
opinion of the case had a distinctively conservative view of CSR. The case
centered on the proper use of shareholder funds. Henry Ford, Ford’s founder,
strongly believed in providing a Ford vehicle for everyone. Therefore, he planned
to reduce the price of a Ford from $440 to $360. However, shareholders
complained that this action would prove to be detrimental because the primary
responsibility of Ford Motor Company was to provide them with a profit. The
case concluded: A business corporation is organized and carried on primarily for
the profit of the stockholders. The power of the directors is to be employed for
that end. The discretion of directors is to be exercised in the choice of means to
attain that end and does not extend to a change in the end itself, to the reduction
of profits or to the nondistribution of profits among stockholders in order to
devote them to other purposes. (Ostrander, 2002, p. 259) This decision presented
the view of most people concerning the role of business until the middle of the
20th century; businesses were created to enhance shareholder wealth, not
redistribute it.
Historical CSR Figures
The first key statement to specifically mention the social responsibility of
business emanated from Harvard University. The business school dean, Donald
David urged the incoming MBA class to perceive the responsibilities that were to
be assumed by business leaders. These responsibilities consisted of going beyond
the financial interests of shareholders and supporting social causes (Spector,
2008). Some other historical leaders in the CSR discussion were Levitt and
Friedman. Levitt, in 1958, exhorted businessmen to take heed of the dangers of
social responsibility. Likewise, in the 1960s, Friedman warned about the negative
consequences of social responsibility. Friedman offered a conservative, economic
view of CSR. In a New York Times article, Friedman (1970/2002) asserted,

2. “There is one and only one social responsibility of business – to use its resources
and engage in activities designed to increase its profits so long as it stays within
the rules of the game” (p. 230).
CSR Today
Today, textbooks, magazines, journals, newspapers, websites, and books
consistently mention CSR. An emphasis on CSR permeates higher education.
One cannot open many business textbooks that do not flaunt the benefits of this
exalted concept. CSR has become popular throughout the world. For instance, the
Asia-Pacific CSR group was founded in July 2004. This group was founded to
promote favorable environmental and human resource regulations across the
region (Gautam & Singh, 2010). Businesses are increasingly implementing CSR
policies. For example, many firms in the airline industry have incorporated CSR
into their business structures. In recent decades the airline industry has been
pressured into reducing their negative environmental effects. Consequently,
airline firms are focusing on reducing emissions and aircraft noise (Cowper-
Smith & de Grosbois, 2011). Reasons for firms implementing CSR include
strategy, defense, and altruism. Many corporate executives believe that CSR
creates a competitive advantage for firms, thus leading to greater market share.
CSR can differentiate a company from its competitors by engendering consumer
and employee goodwill (McWilliams & Siegel, 2001). CSR may also be used to
preempt competitors from gaining an advantage. Once a firm in an industry has
implemented CSR policies successfully, rival firms may be forced to engage in
CSR as well. If they do not exercise CSR, these rival firms are in danger of losing
consumer loyalty. On the other hand, some firms are involved in CSR simply
because they believe it is the right thing to do. Regardless of the underlying
reasons, CSR has become a commonly used term in the business arena
(Lindgreen, Swaen, & Maon, 2009). N. Craig Smith (2003b), a former professor
at Harvard Business School, argued that “The impression created overall is that
the debate about CSR has shifted: it is no longer about whether to make
substantial commitments to CSR, but how”
Recent Corporate Scandals
Opponents of shareholder theory assert that recent corporate scandals including
Enron, Tyco, and WorldCom expose the inefficiencies of shareholder theory
(Freeman, Wicks, & Parmar, 2004). However, these companies were focused on
maximizing short-term not long-term shareholder value. Additionally, the
managers of these organizations were engaging in clearly fraudulent activities by
promoting their personal welfare above the shareholder’s welfare (Smith, 2003a).
Advocates of shareholder theory proclaim: “The shareholder model—when

3. viewed from a long term perspective—still provides the best framework in which
to balance the competing interests of various stakeholders (including both current
and future stakeholders) when making business decisions”
Reason For Companies Engaged In CSR
Miles and Munilla (2005) describe the motives for participating in CSR by using
Van Marrewijk’s (2003) CSR framework and Carroll’s (1991) pyramid of CSR,
which can be observed in table (1). This table illustrates how different levels of
commitment to CSR are related to motives and out comes. The frameworks
describe that a company’s CSR philosophy can be, compliance driven, profit
driven, driven by caring, synergetic or holistic. In the first stage of CSR category
which is called the legal stage companies engaged in CSR as it their duty and
obligation to follow laws and regulations. In the economic stage, company use
CSR as strategy to create competitive advantage and gained improved financial
performance. The ethical and philanthropic stage has the aim to have a balance
between the profit, people and the planet. In this stage the company does not only
focus on profit but also on social welfare.
(Danielson, Heck, & Shaffer, 2008, p. 65).

5. Approaches::
Some commentators have identified a difference between the Canadian (Montreal
school of CSR), the Continental European and the Anglo-Saxon approaches to
CSR. And even within Europe the discussion about CSR is very heterogeneous.
A more common approach of CSR is philanthropy. This includes monetary
donations and aid given to local organizations and impoverished communities in
developing countries. Some organizations who do not like this approach as it
does not help build on the skills of the local people, whereas community-based
development generally leads to more sustainable development.[clarification
needed Difference between local org& community-dev? Cite]
Another approach to CSR is to incorporate the CSR strategy directly into the
business strategy of an organization. For instance, procurement of Fair Trade tea
and coffee has been adopted by various businesses including KPMG. Its CSR
manager commented, "Fairtrade fits very strongly into our commitment to our
communities."

6. Another approach is garnering increasing corporate responsibility interest. This is
called Creating Shared Value, or CSV. The shared value model is based on the
idea that corporate success and social welfare are interdependent. A business
needs a healthy, educated workforce, sustainable resources and adept government
to compete effectively. For society to thrive, profitable and competitive
businesses must be developed and supported to create income, wealth, tax
revenues, and opportunities for philanthropy. CSV received global attention in
the Harvard Business Review article Strategy & Society: The Link between
Competitive Advantage and Corporate Social Responsibility by Michael E.
Porter, a leading authority on competitive strategy and head of the Institute for
Strategy and Competitiveness at Harvard Business School; and Mark R. Kramer,
Senior Fellow at the Kennedy School at Harvard University and co-founder of
FSG Social Impact Advisors. The article provides insights and relevant examples
of companies that have developed deep linkages between their business strategies
and corporate social responsibility. Many approaches to CSR pit businesses
against society, emphasizing the costs and limitations of compliance with
externally imposed social and environmental standards. CSV acknowledges
trade-offs between short-term profitability and social or environmental goals, but
focuses more on the opportunities for competitive advantage from building a
social value proposition into corporate strategy.
Many companies use the strategy of benchmarking to compete within their
respective industries in CSR policy, implementation, and effectiveness.
Benchmarking involves reviewing competitor CSR initiatives, as well as
measuring and evaluating the impact that those policies have on society and the
environment, and how customers perceive competitor CSR strategy. After a
comprehensive study of competitor strategy and an internal policy review
performed, a comparison can be drawn and a strategy developed for competition
with CSR initiatives.

17. References:
Facts & Figure (n.d). Retrieved April 24, 2008, From
Http :www.pwc.com/extweb/aboutus.nsf
Http: www.google.com
Http: www. wikipedia.com