CSR as a product of functional differentiation

A key hypothesis in CSR research based on SST is that the CSR phenomenon exists in relation to a much broader phenomenon, which is the historical development of modern society as a world society based primarily on functional differentiation. To grasp this idea of functional differentiation, one has to consider a broad overview of modern world history.

Before functional differentiation unfolded, western Europeans were living in a feudal social order. This order was characterized by the primacy of hierarchical (also called ‘stratified’) differentiation: in most domains of social life, people's life chances and ways of life were conditioned by their inherited position in a stratified structure, which stretched from royal families and the high nobility down to families of landless peasants, vagrants, and serfs. From the sixteenth century onwards, this stratified order was progressively disrupted by the formation of functionally differentiated subsystems – a contingent evolutionary process that gained momentum in the late eighteenth century and that reached far into the twentieth century.

To illustrate the emergence of functional differentiation, the monetization of the economy and the development of markets increasingly decoupled access to ownership from one's inherited social position in a hierarchical order. The rise of constitutional states transferred political decision-making from the heights of royal dynasties and aristocratic families to self-organized political systems, in which people are included in a political demos under conditions of formal equality through the status of citizenship. Religious or natural laws gave way to a system of positive law, whose legitimacy is based on internal procedures and rules. Science progressively asserted itself as a system of knowledge production that is guided by the autonomous pursuit of truth. Religion receded from its role as an all-encompassing provider of order in society, to constitute itself as a distinct sphere of social life that entails multiple belief-systems.

This gradual process of functional differentiation, whose unfolding has been much less neat and linear than it appears in the sketch above, has participated in the constitution of a contemporary ‘world society’ by way of an increasing globalization of function systems.