Corporate social responsibility in the 1920s: an institutional perspective

The purpose of this study is to better understand the origins of modern corporate social responsibility. The paper seeks to examine some factors that enabled the new industrial corporation to expand its role in society.

Using institutional theory, this paper describes how some of the institutional characteristics of the modern corporation itself provided some opportunities or challenges in terms of gaining social legitimacy.

The institutional features of the corporation, its technology and management created new demands on the corporation by society. These in turn led to the development of such concepts of corporate social responsibility as: public relations, service, trusteeship, and public welfare.

Future research on social legitimacy should focus on demands placed by the institutional characteristics of new organizations. Other research might include comparative studies of corporate legitimacy in Europe or Asia or an examination of the evolving role of managers from the role of welfare capitalist to trusteeship.

Institutions that adapt to changing demands have the best chance to survive. Firms that adopt new social activities are likely to have to sustain them in the long run.

This study is the first to argue that the features of the modern corporation itself stimulated some of the social activities it undertook. Contributions of scientific management scholars to the shaping of the emerging corporate role are also noted.