Changes in the Market Society and Corporate Social Responsibility
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Changes in the Market Society and Corporate Social Responsibility Kanji Tanimoto Graduate School of Commerce and Management, Hitotsubashi University, 2-1 Naka, Kunitachi, Tokyo, Japan 186-8601. E-mail: [email protected]
The role expected of corporations in society is not fixed, but changes when the society forming the basis of the market economy transforms. Since the 1990s, a lively, ongoing debate has occurred as to whether the negative aspects of globalization can be overcome. In the current environment, which demands both social and environmental sustainable development, calls for corporate social responsibility are getting louder. With the growth of green consumerism and socially responsible investments, the evaluation of corporations is being based not only on financial, but also on social, indices. Specialist organizations now survey and rate corporate activities from an environmental–social perspective and provide information to consumers and investors, who in turn make decisions based on this evaluation; corporations thus receive positive or negative sanction from consumers and/or investors based on these ratings. Should this system become established in the marketplace, corporations will have to manifest a system that incorporates social fairness and environmental responsibility, and accept their accountability to stakeholders for their economic activities. This paper examines global trends and new possibilities in corporate responsibility, making a particular study of the current Japanese situation. Asian Business & Management (2004) 3, 151–172. doi:10.1057/palgrave.abm.9200087 Keywords: market society; sustainable development; corporate social responsibility; socially responsible investment; corporate reputation
Introduction Since the 1990s, demands have grown stronger for the sustainable development of the socio-economic system, changing the role that corporations are expected to assume in the market. At the global level, the public have become increasingly vigilant and critical of the social and environmental problems caused by economic development, so much so that the rating standards of corporations in the marketplace have been changing. If a corporation does not provide accountability, not only to shareholders but also to ‘stakeholders’, Received 25 August 2003; revised 24 November 2003; accepted 8 December 2003
Kanji Tanimoto Changes in Market Society and Corporate Social Responsibility
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including employees, customers, the environment and the local/global community, then it cannot be rated and will be less able to receive the support of its society. This global climate change has also affected Japan, increasing domestic interest in corporate social responsibility (CSR). Formerly, whenever there has been economic downturn, interest in CSR has rapidly faded, yet with current awareness of the linkage between profitability and CSR, the rules of the market have begun to change. This paper will examine the transformation in the range of corporate actions and the standards for corporate
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