Strategic Approach to Corporate Responsibility

The main aim of this paper is to emphasize strategic approach to corporate social responsibility based on analysis of relevant theories.In the relevant literature, there are many approaches to corporate social responsibility, but the following theories will be presented: agency theory, stakeholder theory, institutional theory, resource-based view of firm, theory of the firm, and strategic leadership theory.There are numerous unresolved issues relating to the corporate social responsibility, which include defining concept, identifying institutional differences in corporate social responsibility across countries, modeling, determining the motivations, implementing strategies, exploring effects of leadership and corporate culture, and measuring performance of corporate social responsibility.Corporate social responsibility can be regarded as engagement of firm beyond the economic, technological, and legal requirements in order to fulfill social and environmental benefits along with traditional economic performance.In this manner, corporate social responsibility can be analyzed on different levels.One of the best-known models, corporate social responsibility pyramid, presents company's social obligations as comprising economic, legal, ethical, and philanthropic responsibilities.To respond to societal expectations and allocate resources, top managers must first identify relevant corporate social responsibility issues so that they can develop their strategic agenda.Incorporating corporate social responsibility into corporate-level strategies can be realized through linking with following six dimensions: mission, strategic issues, markets, customer needs, resources, and competitive advantage.Corporate executives should take the lead role in this process.When corporate social responsibility became integral part of business strategy, then strategic corporate social responsibility can contributed to good management practice, economic benefit, and societal welfare.