Expanding CSR’s Philosophical Foundation: Korea’s Shared Growth Model

Korea is debating a profit-sharing arrangement between large firms and their suppliers. This “Shared Growth” proposal is criticized by classical economists and large firms as a “socialist”model which will undercut large company’s financial incentives and resources, hindering investment and innovation. “Shared Growth” can be analyzed from various perspectives, but, regardless, Korean society must find it philosophically acceptable. This paper offers a philosophical foundation for “Shared Growth” as a part of an expanded view of Corporate Social Responsibility. CSR’s philosophical underpinnings have been largely monopolized by Utilitarian-Libertarian rationales which limit CSR to activities that improve the firm’s short or long-term profits. This excludes, a priori, profit-sharing mechanisms such as “Shared Growth.”However, CSR can be based on Liberal-Communitarian philosophies, a Deontological rationale which expands the range of acceptable business “socialism” within the capitalist system. The paradigm shift would usher in a normative, human rights justification for CSR, assuring its survival even when not supported by the business case. Korea’s collectivist culture, its increasing role as a global leader in development policies, and the expanding footprint of its multinational companies empower the country to lead this paradigm shift. Korea’s ability to reform CSR is supported by Constructivist theory and the example of Europe’s ideational transformation in state-to-state relations.