During the last two decades, management of corporate social responsibility (CSR) has emerged as one of the most important tasks of managers. Yet, few studies explore the question of how to effectively manage CSR. Even when CSR was considered an oxymoron in the business community, Drucker argued that a firm must actively manage its social environment. He even specified the management of social impacts and responsibilities as one of the three main tasks of effective managers and offered some practical guidelines for managing CSR. Building on Drucker’s insights on CSR scattered throughout his works, this study presents three practical and fundamental steps to creating a good (profitable & socially valuable) business. The underlying contention of this study is that CSR has to be actively and rigorously managed just like any other core functions of a business. Firms that lead the market in the future will be the ones that (1) analyze and understand their social context, (2) recognize and deal with their negative externality, and (3) creatively use their competencies to turn social problems into business opportunities.
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