Abstract

Corporate social responsibility (CSR) has become a ubiquitous concept. It has made inroads into morality and business opportunity. It has found the approval of global institutions. However, it still strives to make itself credible and authentic and—by the same token—to motivate the business community from a cogent theoretical point of view. There appears to be a gap in the theory that would answer a research question like: How can we reformulate CSR in order for it to be cogent from a mainstream economic theory point of view?The scope of this chapter is to suggest a formulation of CSR based on mainstream self-interest and neoclassical microeconomics. The approach to theory development is deductive (from neoclassical economics principles) and inductive (based on literature review). Going back to the basics, this chapter provides a first tentative answer by identifying cogent theoretical reasons why CSR should be practiced by ‘business managers of corporations as a standard of their profession rather than a voluntary and optional initiative’. This chapter’s finding is ‘Reformulated CSR’, whose theoretical underpinning is identified in the two categories of failure: market failure and a sociology of organizations’ novel idea of ‘organizational failure’.This chapter is limited to an initial attempt to address the issue that defines a new potential research area. Future studies could also look at Reformulated CSR vis-a-vis theories of human organizational interaction and look at the role of competition and environmental stewardship. If Reformulated CSR is accepted, then CSR becomes a businesses’ duty to account for their potential conditions of failure, thus overcoming the voluntary motivation that clutters other views. At the same time, Reformulated CSR should not be confined to the business sector as it encompasses all sectors of the economy, including—notably—the public administration. Policy implications include generalized social performance reporting on the part of public administration and—of course—the corporations.