Corporate social responsibility is measured upon the reflection of a firm's awareness of the social and ethical issues that affect their communities. The level of participation in these issues depends on the firm's interactions within their neighborhood and surrounding environment. Some corporations tend to be more in touch with the needs of society by making good ethical business decisions, while others take a more classical and economical approach to business by maximizing profits, while minimizing costs. Whatever the case may be, CSR is an important business operation that is being shown throughout companies all over the globe.
In their book, "Business and Society", Carroll and Buchholtz give this definition of CSR that is broken down into four components, "The social responsibility of business encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time."(Carroll p.36) The economic and legal types of responsibility are required of businesses by society. These areas include being profitable while obeying all laws and regulations including environmental and consumer laws. (Carroll p.39) These areas of responsibility are the minimum requirements for firms that assume responsibility. The ethical area is expected of businesses by society to do what is right and fair and to be an ethical leader for other corporations. (Carroll p.39) Philanthropic responsibility is desired by society for businesses to reach out to the community by providing contributions and offering programs to provide for betterment of the neighborhood. (Carroll p.39) If all four of these areas are accounted for in a firm, then that organization has total corporate social responsibility.
One may question the need for corporations to have such an impact on their community. Most of the time these issues are taken care of by the government or by the local community.