University of Vaasa - Vaasan yliopisto

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development goals, is a relatively recent phenomenon that can be seen as a
consequence of the expansion of the list of corporate responsibilities throughout the
second half of the 20 th century (Frynas 2008).
In the developing world, in the late 1960s and 1970s there were efforts to regulate
activities of foreign investors. As a consequence, for the first time the regulation of
corporate activities became an international issue, with numerous attempts within the
UN to establish codes of conduct for the activity of transnational/multinational
companies.
The 1980s signaled a significant shift away from state intervention in both developed
and developing countries. These trends reflected in developing countries’ policies
which shifted dramatically from regulation of transnational/multinational
corporations activities to intense competition to attract direct foreign investments
(Jenkins 2005).
By the 1990s the heyday of neo-liberal policies had passed in the North, and
corporations started to attract criticism for their global environmental and labor
practices (Jenkins 2005). Furthermore, the developments in global communications
have facilitated the international transmission of information about working
conditions and environmental impacts in developing countries, contributing to
increased public awareness and facilitating campaigning activities. Companies
responded to all these new issues by espousing CSR.
It is important to underline that, while in the late 1960s and 1970s southern
governments called for international codes of conducts for corporations, the 1990s
CSR initiatives came largely from the North, where international trade unions,
development NGOs, human rights organizations and environmental groups have
contributed to the demand for greater social responsibility (Jenkins 2005; Frynas
2008).
In general in the last twenty years, there has been a change in the nature of the
triangular relationship between companies, the state and society (UNIDO 2002;
Krishnan & Balachandran 2004; Jamali 2007; Rwabizambuga 2007). The evolution
of the relationship between companies and society has moved from paternalistic
philanthropy to a re-examination of the roles, rights and responsibilities of business
in society, where the mutual interest of all stakeholders is gaining paramount
importance (UNIDO 2002; Krishnan & Balachandran 2004). Furthermore the call for
greater involvement of private firms in human development reflects the growing
importance of foreign direct investments. In fact, as a consequence of liberalization
and deregulation, firms are now being called upon to go beyond their traditional role
of generating economic growth toward playing a more direct role in alleviating
poverty and other development goals (Boele et al. 2007; Frynas 2008; Frynas 2009).
In order to gain strategic initiative and to ensure continued existence, companies
have started to manage their business practices avoiding the normal practice of solely
focusing on profits and pursuing public goodwill and responsible business etiquettes
(UNIDO 2002). Companies have embraced a new approach to CSR, recognizing that
improving their own impact and addressing wider social and environmental problems
will be crucial in securing long-term success (UNIDO 2002).