A systems-theoretic perspective on corporate social responsibility

The paper elaborates on the systems-theoretic underpinnings of the discourse on corporate social responsibility. This discourse is framed by ideas many of which have strong systems-theoretic connotations. In particular, the... [ view full abstract ]

The paper elaborates on the systems-theoretic underpinnings of the discourse on corporate social responsibility. This discourse is framed by ideas many of which have strong systems-theoretic connotations. In particular, the conceptions of the interdependence between business and society, and of the societal embeddedness of business, revolve around the theme of system-environment interaction which may or may not turn out to be sustainable. Drawing upon the arguments of Niklas Luhmann and Kenneth Boulding, the paper argues that this interaction will not be sustainable if systems develop their complexity to the point of overstraining the carrying capacity of the environment. In the proposed framework, systems can become more sustainable by improving their grounding in the environment, primarily by improving sensitivity to it and by constraining their own complexity. These sustainability strategies reveal the systems-theoretic meaning of corporate social responsibility which is fundamentally about improving the grounding of modern corporations in their societal environment.

The proposed systems-theoretic framework highlights parallels between corporate social responsibility and vertical integration in the perspective of Williamson’s transaction cost economics. Luhmann’s understanding of social integration as a reduction in the degrees of freedom of functional systems is germane to both Williamson’s vertical integration and corporate social responsibility. Williamson inspired an extensive and highly insightful research program on how vertical integration and, more generally, the coordinated governance ensure the economically sustainable use of complex technology. It is the hope of the author that the proposed systems-theoretic perspective on corporate social responsibility will likewise spark further debate on how the development of complex technology can be linked to corporate social responsibility practices with a view to preventing the carrying capacity of the societal environment from being overstrained.