Corporate Social Responsibility in Between Governmental Regulation and Voluntary Initiative: The Case of Germany

In general, the discussion on corporate social responsibility (CSR) is relatively new in Germany. It only gathered speed in the early 1990s for several reasons. Firstly, the question arose on how private actors could be involved in order to fill the gap left behind by the shrinking welfare system. Secondly, the rapidly progressing globalization process demonstrated the difficulty of regulating multinational corporations (MNCs), which lead to calls for more self-governance. Thirdly, civil society organizations in turn considered pure self-governance as insufficient and, thus, began to pressure companies to act more socially responsible. However, business only partly reacted to these developments, as it perceived the paying of taxes, following the law and occasional donations as sufficient for assuming social responsibilities. Overall, CSR did not find a nourishing breeding ground in Germany. Thus, German companies will have to develop an understanding that CSR goes far beyond being lawful and charitable activities as it essentially should be part of the core business. This is the only way CSR can create a substantial benefit for society and business. For companies these advantages can be manifold: an improved reputation, a differentiation from competitors through more responsible products, an opening of new markets and attraction of new customers, better supplier relations, cost savings due to more eco-efficiency, attracting, retaining and motivating employees, and better community relations. It becomes clear from these advantages that they can only be achieved through strategic implementation of CSR into the core business.