Historical Evolution of CSR

Corporate Social Responsibility (CSR) has had a long and wide-ranging history. There have been formal writings on social responsibility mostly from the twentieth century, especially from the past 50 years or so. Though it is possible to see evidence ofCSR throughout the world, mostly in the developed countries, most early writings have been most obvious in the United States where a sizable body of literature has accumulated (Cavrou, 1999). In the past decade, however, Europe has become captivated with CSR and there is considerable evidence that scholars and practitioners in Europe are taking seriously this social concern, often manifested in the form of formal writings, research, conferences, and consultancies. More recently, countries in Asia, including Nepal have begun increasing their attention to CSR policies and practices. At the same time, it must be acknowledged that CSR and related notions have been developed in practice and thought in a number of other countries and at different times. With this background in mind, this essay of the historical evolution of CSR will focus primarily on developments in the world and also in Nepal.

CSR Evolution in the World

Though formal literature regarding CSR started to take form in the 1950s, we can begin with some of the activities and practices originating in the Industrial Revolution as a useful starting point. For instance, in the mid-to-late 1800s, emerging businesses were especially concerned with employees and how to make them more productive workers. Then, and now, it is sometimes difficult to differentiate what organizations are doing for business reasons, i.e. making the workers more productive, what the organizations are doing for social reasons, i.e. helping to fulfill their needs andmake them better and more contributing members of society.


For example, an early practice illustrated how business people were thinking about social causes which could be an example of corporate social responsibility. Morrell Heald illustrated how company expenditures on community causes were quite evident in the late 1800s. He cites the case of the R. H. MacyCompany of New York City that might have reflected a social sensitivity on the part of its management. The firm’s records show that there were enough cases of company assistance given to social agencies to build a sense of relationship to the community that extended beyond the walls of the company. In 1875, Macy’s contributed funds to an orphan asylum. In 1887, company gifts to charities were listed under Miscellaneous Expenses in the company’s accounts. Examples such as these prove that corporate social responsibility has been existing for a long time, though it has become a lot popular in the past fifty years. However, it is difficult to know how CSR was evolving before the past fifty periods.

One can also classify the evolution of CSR into specific ‘eras’. Patrick Murphy argued that the period up to the 1950s was the ‘philanthropic’ era in which companies donated to charities more than anything else. This period saw companies that passively donated to charities when they thought it was required. The period 1953–67 was classified as the ‘awareness’ era, in which there became more recognition of the overall responsibility of business and its involvement in community affairs. In this period, strategic giving was linked to business interests and this included cause-related marketing. The period 1968–73 was termed the ‘issue’ era in which companies began focusing on specific issues such as urbandecay, racial discrimination, and pollution problems. Here, companies were focusing on investments and strategic partnerships with the community. Finally, in the ‘responsiveness’era, 1974–8, and, continuing beyond, companies began taking serious management and organizational actions to address CSR issues. These actions would include altering boards of directors, examining corporate ethics, and using social performance disclosures.

Two broad principles had emerged in society about CSR. They were the charity principle and the stewardship principle. The first principle argued that the wealthy members of the society should be charitable to the less fortunate ones. It is synonymous to a private aid given by wealthy people to poor people. On the other hand, the stewardship principle argues that business people have an obligation to see that everyone benefits from their firm’s actions. This principle basically says that organizations have a responsibility to use their resources in ways that are good not just for the stakeholders alone, but also for society in general.

Presently, for the previous 20 years, but especially in the 2000s, the CSR movement has been a global phenomenon. The interest and growth of CSR can be seen in the European Community. According to a report prepared by the Organizationfor Economic Co-operation and Development (OECD, 2001), voluntary initiatives in corporate social responsibility have been a major trend in international businessin recent years. The OECD project on private initiatives for corporate responsibility revealed a number of key findings about CSR. Some of the important findings are worth noting. One noteworthy finding is that CSR is definitely a global phenomenon, though there are important intra-regional variations in practice. Some initiatives are more voluntary than others as some companies have been under legal and regulatory pressure to adopt them. There appear to be divergences of commitment and management practice even in narrow areas of application such as labor standards, environment, human rights, and fighting bribery. First steps have been taken towards the development ofconsensus on social norms of business conduct, though the conversation is ongoing (OECD, 2001).

It is clear from CSR trends and practices that social responsibility has both an ethical or moral component as well as a business component. In today’s world of intense global competition, it is clear that CSR can be sustainable only so long as it continues to add value to corporate success. It must be observed, however, that it is society, or the public, that plays an increasing role in what constitutes business success, not just business executives alone, and for that reason, CSR has an important part in the global business arena. The pressures of global competition will continue to intensify, however, and this will dictate that the ‘business case’ for CSR will always be at the center of attention.

CSR Evolution in Nepal

Like the rest of the world, Nepal has also seen the boom of CSR. Though the term CSR has recently arrived, the concept of social responsibility has been around for centuries. Through religion and culture, people are generally indoctrinated with the concept of social responsibility as a child. The belief transcend from the religious belief of the potential punishment the person will have after his death, if he exploits too much and the reward he will enjoy after his death, if he makes some social or religious contribution (Legal, 2006).

In the past 100 years of history of Nepal, few business communities have contributed their wealth to build educational institutions, temples and large Dharmasalas (inns built for religious purposes) for general public and pilgrims. Landlords who were the businessmen of ancient Nepal were involved in building such things for public use. When the country faces natural calamities such as flood, famine and earthquake, the businessmen are always there at the front to donate food, cloth and other amenities. Even in the recent flood, corporate houses have donated a lot of money to the victims. These historical evidences of the participation of business community are more philanthropic in nature. However, now businesses in Nepal are moving towards a different approach. Social entrepreneurs are giving training of various kinds to people from rural Nepal. Their main belief is ‘Give a man a fish and he will eat for a day. But teach a man how to fish, and he will eat for a lifetime.’

In the article ‘Corporate social responsibility domains and related activities in Nepalese companies’, Adhikari writes that it is difficult to initiate discussion on CSR dimensions in the context of Nepal as it is still considered as an underdeveloped country. The small number of business houses mostly family owned and their profit-making attitudes are the key factors that affect CSR in the Nepalese environment.

For instance, as part of their CSR initiatives, MAW enterprises has been engaging students and community members in their safe-driving programs. They organize such programs at the community level and teach the people on practicing safety rules and regulations as well as to follow discipline when driving. These programs have been thought to widely decrease the number of road accidents as well as traffic jams. They are also conducting programs to teach motorcycle driving for people who want to get a driver’s license.

Buddha Air, like other corporations in Nepal, started its ‘so called’ CSR with minor initiatives of promoting staff welfare activities, and writing charity checks, donating in bits and pieces to NGOs for sports and social activities. It can be claimed that Buddha Air’s CSR then was more of a rhetorical façade than reality. However, things changed as Buddha Air started becoming economically more affluent and started initiating agriculture projects through its CSR. Moreover, in this regard, Birendra B Basnet, Managing Director of Buddha Air, acknowledges that, irrespective of what Buddha Air was doing earlier, it started its CSR primarily from 2006 and was further restructured in 2012, with the formation of Nepal Krishi Company (NKC) and channelizing the CSR activities through it and 31 cooperatives in four districts—namely Morang, Sunsari, Jhapa and Saptari, with more than 6,400 households as beneficiaries.

In the article, ‘Corporate Social Responsibility: Evidence from Nepalese Financial Service and Manufacturing Sectors’, Chapagain examines the Nepalese financial service and manufacturing sector managers’ strategic and moral views on CSR. This study found that the trend of CSR thinking has moved from philanthropy to better stakeholder relations and competitive/strategic advantage of organizations and even nations. In his own words, ‘CSR is stronger than strategic view on CSR. Likewise, the actual CSR efforts are not as greener as the views are. Responsibility towards government seems to be highest and the responsibility towards society is the lowest in both the sectors. Analysis also reveals that overall CSR performance of companies is much more correlated to themoral view on CSR than to the strategic view on CSR. In this context, the government, pressure groups and other stakeholders are also required to further encourage socially responsible corporate behaviour for more equitable and just society.’

This article along with many other literatures has come to a conclusion that CSR has been thriving in the recent years. Companies have been knowingly or unknowingly been contributing to the growth and development of CSR. The future will see a lot more CSR from companies, given the competition in the Nepali market as well as the global market.