I recently read an article titled “Should your company practice Social Responsibility?”; written by Kalen Smith. It took a look at the arguments for and the arguments against Corporate Social Responsibility (CSR). He talks about what might work for your company, and how CSR is portrayed.
He touches on how important CSR is becoming to shareholders because scandals in the early twentieth century, like Enron. Smith brings up the points of 1- corporations should be held accountable to shareholders, 2- CSR helps corporate profits, and 3- corporations should forgo profits and do right by all stakeholders.
The debate for CSR includes that socially responsible businesses will create goodwill with their stakeholders. If the business is socially responsible, then it is assumed that the employees are loyal, and the customer will buy the product because the company supports something that they believe in. Smith also believes that because companies have invested time and money in CSR, they are less likely to violate the law, as well as being less likely to be tried under the law for cutting corners or putting stakeholders at harm.
The opposite side of the argument is that CSR costs too much money and puts the business at a disadvantage competitively. To try and introduce less pollution produced by businesses is time consuming and costly. Next he involves the stakeholders, and how they are holding businesses accountable for their actions to do with Corporate Social Responsibility. Finally, an argument that some make is that the social responsibility shouldn’t be the problem of the private sector, but the responsibility of the government.
In conclusion, many people have theories that suggest that CSR will have long-term benefits for businesses, where others suggest the opposite to be true. Businesses want to make sure that whatever decision they make, it won’t have a negative effect on their shareholders.
By: Matt Fair