Corporate social responsibility in a global economy

Abstract

Corporations are increasingly adopting socially responsible actions, activities, policies and processes. A corporate social responsibility (CSR) policy is beneficial not only for a corporation's bottom line but also for its employees, stakeholders, consumers, and for communities, the environment and society at large. It is, therefore, imperative to assess and know the extent to which a corporation is socially responsible. Keeping this in view, the present paper seeks to introduce a new measure, based on a holistic and system modelling approach, to conceptualise and measure the phenomenon of corporate social responsibility. It develops, constructs and validates a model to measure CSR by using a latent variable structural equations model within the certain boundaries of the organisational strategic planning systems. It will provide us with a measurement or index of corporate responsibility at international level, country level or community level. A CSR index will indicate the extent to which a particular corporation has social responsibility and in which areas it lacks such responsibility, if any. Strengths and weaknesses of various components of the model will also indicate characteristics at a certain level which will enable the corporation to pinpoint what exactly is required in order to improve its responsibility towards people, the environment and society at large.