Social responsibility of business: institutional approach

The purpose of the article is to evaluate the nature and implications of implementing social responsibility of business (SRB) in practice of manufacturing companies. Research methods. In the process of research mainly were used method of institutional economics for interpretation of SRB essence and consequences of implementation of its concept in practical activity of market economy subjects, monographic method for analysis of scientific achievements of domestic and foreign scientists, empirical method for study of the impact of some of the world's leading companies in the Global CSR 100 ranking, abstract and logical methods for generalization and formulation of conclusions. Research results. Using an institutional approach to the analysis of corporate social responsibility, in particular the existence of opportunistic behavior among companies-producers, political rent seeking both from manufacturing companies lobbying their interests in the legislature and from the bureaucracy charged with overseeing the activities of manufacturing companies, the negative externalities of the majority of companies’ SRB practice, the absence of generally accepted international practice of defining corporate social responsibility, a rigid system of control and punishment for its noncompliance, the authors emphasize that the existing system of implementation of corporate social responsibility brings more harm to society than benefits. The authors substantiate the absence of the institute of social responsibility of business, propose their definition of the category "social responsibility of business" and highlight the problems of creating an effective institute of social responsibility of business. Elements of scientific novelty. The imperfection of the existing SRB concept as well as the absence of the institute of "social responsibility of business" are proved. The very negative consequences of the implementation of the existing CRB concept in the practical activity of market economy entities for the world community are outlined. The author's vision of the essence of SRB is formulated on the basis of the institutional approach. Practical significance. It is possible to use the proposed approach in the institutionalization of SRB. Refs.: 33.