The Origins of Social Responsibility

Lesson Transcript
Instructor: Jennifer Lombardo
Although the idea of business helping society can be traced back to ancient times, the full thrust of corporate social responsibility was born in the 1950s. In this lesson, you will learn the origins of social responsibility.

Social Responsibility

Once upon a time in the late-20th century, big business noticed that they were losing productivity due to employee health, accidents on the job, and personal issues. Once corporations began responding to employees' needs, greater requests were then demanded, such as helping society as a whole. Then, in the 1950s, there were the births of very large corporations, such as General Motors, Chrysler, U.S. Steel, Amoco, and Firestone. At the same time, America faced very difficult issues of poverty, unemployment, and pollution.

Pre-1950, there were some organizations that provided charitable work and donations, but the idea of social responsibility was not truly formed. In this lesson, you will learn about where and when the idea of social responsibility originated. Social responsibility is the use of a business's resources to help solve social problems and achieve social goals. Companies need to look outside of their primary stakeholders and feel a responsibility to society, as well. Let's take a journey back in time to see how the idea of social responsibility developed.

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  • 0:01 Social Responsibility
  • 1:15 Historic Social Responsibility
  • 2:10 Modern Social Responsibility
  • 4:48 Lesson Summary
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Historic Social Responsibility

Ancient history - Even in the earliest days of commerce, owners felt that it was very important to take care of stakeholders. For example, back in the Middle Ages, lords were concerned about exploitation of resources, such as forests and animals, for business profits. The idea of social responsibility began in the United States. Colonial America found prosperous merchants donating to schools, orphanages, poorhouses, and churches.

Early-19th century history showed how unhappy workers (children included) with poor living conditions and health would result in poor productivity. They were followed by entrepreneurs, such as John D. Rockefeller and Andrew Carnegie, who made fortunes during the late 1800s and evolved into philanthropists, or business owners who help others through the donation of time and money.

Modern Social Responsibility

20th century - The 20th century ushered in a different view of business. Society felt as though corporations needed to be held accountable for society's problems and help with the solutions. Business owners were viewed as having numerous responsibilities, such as:

  • Acting as trustees to protect stakeholders
  • Balancing the needs of all stakeholders
  • Introducing the service principle, which is that the owners' purposes were to service society through the creation of profitable businesses.

Robert Wood of Sears is an example of a business leader who subscribed to the principles. His views continue even today.

Between 1900 and the 1960s, society started to doubt big business and wonder if they would offer any sort of responsibility towards improving and helping society as a whole. In America, between the 1960s and 1970s, most people felt that companies were only concerned with profits and did not care about society, whether it was ignoring social issues or contaminating the environment with production.

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