CSR and Stakeholder Theory: A Tale of Adam Smith

• Published in: Journal of business ethics Vol. 112; no. 2; pp. 301 - 312
• Main Authors: Brown, Jill A., Forster, William R.
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer 01-01-2013; Springer Netherlands; Springer Nature B.V
• Subjects: Altruism; Beneficence; Business and Management; Business Ethics; Business management; Business strategies; Business structures; Commutative justice; Corporate responsibility; Corporate social responsibility; Costs; Distributive justice; Economic theory; Education; Ethics; Ethics and moral life; Jurisprudence; Justice; Legitimacy; Management; Morality; Morals; Philosophy; Property rights; Public speaking; Quality of Life Research; Smith, Adam; Social ethics; Social responsibility; Society; Sociology; Sociology of knowledge and ethics; Sociology of knowledge and sociology of culture; Sociology of organizations and enterprises. Bureaucracy and administration; Sociology of work and sociology of organizations; Stakeholder; Stakeholder management; Stakeholders; Justice; Adam Smith; Beneficence; Corporate social responsibility; Stakeholders; Perfect rights; Stakeholder; Enterprise; Social responsibility; Smith (A.)
• ISSN: 0167-4544; 1573-0697
• DOI: 10.1007/s10551-012-1251-4

This article leverages insights from the body of Adam Smith's work, including two lesser-known manuscripts—the Theory of Moral Sentiments and Lectures in Jurisprudence—to help answer the question as to how companies should morally prioritize corporate social responsibility (CSR) initiatives and stakeholder claims. Smith makes philosophical distinctions between justice and beneficence and perfect and imperfect rights, and we leverage those distinctions to speak to contemporary CSR and stakeholder management theories. We address the often-neglected question as to how far a company should be expected to go in pursuit of CSR initiatives and we offer a fresh perspective as to the role of business in relation to stakeholders and to society as a whole. Smith's moral insights help us to propose a practical framework of legitimacy in stakeholder claims that can help managers select appropriate and responsible CSR activities.