Corporate social responsibility (CSR) is a relatively new notion, which came in use in 1960's and 1970's. However, the idea behind it is by no means a novelty. All the societies and historical eras had their characteristic economic, legal and moral expectations from the power accumulated in the economic sphere. Even in ancient Mesopotamia, in approximately 2700 B.C., first laws were passed with the intention of limiting business activities in order to protect forests and the environment.
In the era of developed capitalism, the relationship between economy and society as a whole received a new meaning. The teachings of Adam Smith, the founder of the modern economic science, created a base for building market economy in which personal interest was identified as the main initiating power of progress. In late 19th century enterprises were formed, whose founders and owners became some of the richest and most powerful people on the planet. Many of them followed and practiced the philosophy later labeled as "social Darwinism" which, in a simplified form, is an idea to attribute the principles of natural selection and the survival of the strongest on business and social politics. Such philosophy encouraged ruthless, even brutal competition, not leaving much room for concern due to the influence that successful companies might have on their employees, the community or society as a whole.
As a response to the increasing power of great corporations and first multimillion empires in the early 20th century, primarily in the USA, a social movement was formed, which strove to limit their power and make them more thoughtful towards employees and the poor. Furthermore, the authorities started to pass laws by the means of which enterprises could be restricted and employees, consumers and the society as a whole protected. The media, especially the written ones, played a significant role in those events, and such social movements produced possibly the first examples of explorative journalism directed at revealing the unethical business practices of powerful capitalists.
In 1960's and 1970's the movements for the protection of human rights, consumer rights and the environment had enormous effect on the higher expectations of the society from the business world. Guided by the basic idea that those who have great power also have great responsibility, many appealed on the business world to stop causing social problems and to take part in their solving instead. The world of business was burdened with numerous legal obligations in terms of equal rights to employment, product safety, protection at workplace, and the conservation of the environment. Besides, the society started to expect the business world to voluntarily take part in solving social problems, notwithstanding whether they had been the ones who had caused them or not. Today, such interpretation of corporate social responsibility prevails in the greatest part of the developed world.
Events of the past several years even speeded up the strengthening of the CSR idea: fast globalization, various corporate scandals, ecological disasters, and revealing of exploitation practices in the Third World plants have caused even greater global distrust towards multinational corporations, and have also created need for stricter control over corporate management. That is one of the reasons why multinational corporations increasingly focus on promoting CSR, as a sort of "friendly side of capitalism", attempting to point out their advantages to a large section of the public which is extremely against the enterprises and concerned because of the huge power and influence concentrated in the hands of the business.
Socially responsible actions have undoubtedly existed for a long time. Still, what differentiates the contemporary idea of CSR from the past efforts is the attempt to strategically control CSR and develop the necessary instruments to that end. Companies are becoming ever more aware that they can contribute to the development sustainable in the long run by running business in a way which will ensure them a stable economic growth and improved competition, while simultaneously leading to a harmonized society. This time, by taking part in CSR, companies have a chance to help others by helping themselves and their business.
Corporate social responsibility in the European Union
Keeping in mind the important role of the profitable sector in maintaining sustainable growth, and at the same time faced by various ecological, social, interethnic and other challenges, the EU states have, in the last ten years, developed a strategic approach towards CSR, planning long-term methods and instruments for their application. The intensified debate about CSR can be viewed as a response to many a scandal in the corporate sector in the last two decades, and the challenges to actively involve businesses into solving global problems such as climate changes, uneven development and world poverty, which have, in the era of globalization, become a critical threat to further growth.
The European Union has decided, which is most clearly seen by the actions of the European Commission, that CSR represents one of the core elements of the European social model and that it positively contributes to the European strategy of sustainable progress agreed on in Goteborg in June 2001, and to the strategic aim adopted in Lisbon: creating a maximally "competitive business environment based on knowledge, which can maintain sustainable business growth with new and better paid jobs and greater social cohesion." In accordance with that, many European countries began to put the CSR aims into practice; thus, Belgium became the first European country in which a legal regulation was passed about voluntary labeling of "responsible production"; France passed the first law about mandatory reports once in every three balance sheets for those companies whose shares are sold at the stock market (financial, social and ecological aspects of their business); Sweden promotes CSR in developing countries via "The Swedish Partnership for Global Responsibility"; while Great Britain, which has advanced the most in terms of CSR, has named in 2000 the first Minister for Corporate Social Responsibility and has instigated more than 60 governmental initiatives for its promotion.
As for the states which have economic relations with the EU or are currently in the process of accessing European integrations, they are also expected to adopt the principles and standards of corporate social responsibility. For example, in mid-1990's, the EU passed a regulation within its Generalized System of Preferences (GSP) by which developing countries are exempt from customs fees for certain products exported to the EU, which states that preferences will not bee granted to the countries which do not respect the basic CSR principles: they peruse child labor or forced labor, forbid labor unions, and discriminate among job applicants or when promoting a certain category of employees. Those criteria will evidently be broadened and intensified in the future.
CSR in the countries in transition
Most countries in transition are still in a much earlier phase of CSR development in comparison with developed countries. They will have to overcome significant obstacles in terms of improving corporate environment before they are able to fully accept the CSR idea. In many of those countries the heritage of old politics of nationalization, central planning, inadequate development measures, corruption and arbitrary interference of politics have caused an atmosphere of distrust between the private sector, developed after the downfall of the socialist system, and the state government. One of the key challenges for achieving lasting results lies exactly in overcoming the differences and attaining a balance among the public authorities, businesses and the civil society.
In most cases, the first steps in developing socially responsible practices were made by great multinational investors who brought with them traditional engagement with the local community, ecologically advanced technologies, new management culture and hands-on experience in terms of how a business could contribute to the process of solving social and ecological challenges. Soon afterwards, local companies from most regional countries also started to acknowledge and support such practices.
Due to the delayed beginning of true transition and abundant political and socio-economical problems from the previous period, Serbia is also in this respect somewhat behind in comparison with most other countries in transition. The awareness of corporate social responsibility exists in Serbia, but mostly on the level of concept-formation, which has only just recently been recognized as an important and socially beneficial, rather than on the level of locally realized practice. Those happen to be significant obstacles when promoting this idea: many companies still do not grasp the long-term advantage of the socially responsible attitude, and various businessmen and entrepreneurs believe that they do not have enough resources or the knowledge necessary for their engagement in different strategies. On the other hand, the public is not sufficiently informed about the values of CSR, and consumer awareness is still underdeveloped, so that, when purchasing a product, an average consumer does not take into consideration other aspects to identify the product beside its price and quality. One of our main endeavors is to significantly establish the idea of CSR in the Serbian society so that it might become one of the acknowledged solutions for reinforcing the competitiveness of Serbian economy and the sustained development of the Serbian society.
