“How selfish so ever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it”. Selfishness is supposed to look after us, while Sympathy (e.g. empathy) to look after others. These two principles were understood by Adam Smith (1759) to be naturally given to us, and in order to co-exist in harmony with others, a minimum required level of justice is indispensable, while going beyond by doing good to others is a highly appreciated virtue (e.g. beneficence).
In his book The Theory of Moral Sentiments, Adam Smith emphasized that benevolence is not a necessity as is justice. Benevolence is voluntary because by just following the concept of an invisible hand, self-interest alone is capable of achieving social benefits for everyone. The invisible hand refers to “a natural, spontaneous process at work within markets which ensures that individuals, while seeking only to maximize their own welfare, unwittingly act in such a way as to promote the common good” (Walker 1992). The impact of the concept of an invisible hand goes beyond achieving individual self-interest alone. Smith discussed in the same book that a selfish agent in addition to self-interest also needs social respect and desires recognition for altruistic behavior. In modern language this is a stakeholder’s recognition and legitimacy, which links us back to modern strategic corporate social responsibility (CSR).
Far from morality, self-interest which is strictly linked to individual rationality is therefore not in conflict with building an agent’s reputation of caring for society and being socially responsible in order to maximize private and social benefits. To a certain extent, Smith’s view is consistent with the precedent beliefs, religions, norms, and values, which necessitate justice and uphold beneficence; a good behavior—charity, honesty and fairness and just, kindness, and gratefulness—and condemn bad behavior such as cheating, steeling, lying, killing, and extortion/corruption and coercion. Of course CSR debate has come a long way since early thinkers like Smith started the conversation. Indeed, the CSR conversation can be traced back to early Greek philosophers (Mellahi et al. 2010). In this volume Chap. 2 by Frynas and Yamahaki reviews the theoretical development of CSR.
Middle Eastern societies also embrace justice as a necessity and go beyond by upholding righteous behavior; charity, sharing, and social solidarity through Zakat1 which is enforced by Sharia on Muslim individuals and enterprises to reduce poverty, inequality, and enhance the general well-being of the community, which is a personal religious principle, not being enforced or collected by the state. Middle Eastern cultural and religious values are fully compatible with CSR principles and concepts (Darrag and E-Bassiouny 2013). One of the guiding principles for individual agents in the Middle East is the teaching to produce and achieve wealth as if one is going to live forever and to give away to the needy as if one is going to die tomorrow.
In consent with the self-interest school of thought (not selfishness which is opposing sharing of wealth), the individual is taught to acquire wealth with decency and integrity while abandoning usury, extortion/corruption, and coercion, and as long as benevolence is ensured through Zakat and charity (Sadakat), this will benefit the entire community and generate social benefit and the general well-being for the community.
From the above perspective, the self-interest and benevolence principles do not conflict and are also applied to the individual enterprise which is consistently being viewed to seek self-interest/stakeholder’s interest while considering the social benefit of the community. In contrast with the classical dichotomy, where division of labor/responsibility between corporates and governments is set to assign profit maximization to corporates and production of public goods/social benefit to the government (Friedman 1970; Baumol 1991; Rose-Ackerman 1996), and in the context of the growing recognition of the causes of market failures and government constraints to take perfect corrective actions, a new breed of recent schools of thoughts proposes much more nuanced and various frameworks postulating that firms also consider social benefit to different extents and well in consistency with the stakeholder’s wealth maximization. The stakeholder theory of Freeman (1984) is a good example of these new schools of thoughts (Frynas and Yamahaki, Chap. 2, this volume; see also Kitzmueller and Shimshack (2012) and Besley and Ghatak (2007) for a literature review on CSR from an economic perspective).
As discussed in Chap. 2 in this volume, CSR is now widely discussed and portrayed as the new way of doing business worldwide and in the Middle East. There are plenty of evidence showing customers’ willingness to pay extra price for products and services involving CSR in the background as a strategic way of doing business and considering preferences of customers (De Pelsmacker et al. 2005; Nan and Heo 2007; Mohr et al. 2001; Frynas and Yamahaki, Chap. 2, this volume). The small body of research on CSR and customers’ preferences provides the same results (Eshra and Beshir 2017; Bin Brik et al. 2011).
The debate on CSR has now also evolved in the Middle East, enhanced by awareness of CSR and business excellence and the cultural diversity and supported by the increasing forward and outward foreign direct investment, global trade, global tourism, and global finance among others which have ensured internalizing behavioral standards of busin...