Research Handbooks in Business and Management series
Edited by Ronald Paul Hill and Ryan Langan
Chapter 14: Mandating socially responsible behavior
Management theory and practice are facing unprecedented challenges. The lack of environmental sustainability, the increasing inequity and the continuous decline in societal trust pose a threat to ‘business as usual’ (Jackson and Nelson, 2004, p. 214). It is argued that legitimacy has been lost by irresponsible corporate behavior. A logical step to remedy the current problems could be to regulate and mandate responsible corporate behavior. This endeavor, though, seems easier said than done, as a legal approach presupposes that there are clear answers to questions of responsibility that can easily be regulated. In this chapter we will engage with the question of mandating socially responsible behavior by providing a general framing of the discussion on corporate social responsible behavior (CSR), and outlining the benefits of socially responsible behavior for a set of companies that engage in business-to-consumer (B2C) commerce. We then outline the benefits of mandated social responsibility standards, and the potential downsides. Finally we suggest alternatives and complements to mandated socially responsible behavior, via strategy and governance structure changes. Before we do so, we wish to outline the big-picture challenges of the current economic structure epitomized by shareholder capitalism, which motivate the quest for more socially responsible corporate behavior. At the same time, these challenges outline the necessity of mandates for social responsibility. We then outline different approaches to CSR, as developed in practice and theory, to guide further discussion.
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