Corporate Social Responsibility and Profit - Essay Example
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This paper illustrates that followers of CSR on the other hand state that being socially responsible is more important because of the social contract, as well as the argument that CSR can actually increase profit. Others in favor of CSR say that it is already an obligation, and the issue is simply one of finding ways in which companies can act in ways that are socially responsible. Even companies who agree that CSR is important often have problems putting CSR principles into practice. The main critics of CSR claim that standards of living have greatly improved over the past 100 years and that this improvement is a result of “the success of free enterprise”. Critics of CSR attack those in favor of it by saying that profit is a needed and helpful advantage of business because it is this very profit which allows businesses to put funds into helping society. The reduction of profits gained by companies caused by CSR can actually have bad effects on society because lesser profits mean less ability to help society. If companies spend more time paying for functions that make them socially responsible, they will not be able to focus on the profit which is important for shareholders. Without shareholders, the company does not exist, and so it cannot help society by giving it funds. Many people in favor of CSR say that many business ethics of big corporations are unethical, but critics reply by saying that it is unethical for managers to think of anything else than maximizing shareholder profits. Also, making companies responsible for many different aspects of society risks managers and directors being distracted. Critics also say that there is a big difference between taking account of society’s interests and being accountable for society’s interests; only the former element should be imposed on managers and businesses.
This paper will explore the arguments both for and against CSR; the profit maximization argument formed by Freidman, and the CSR argument. The paper will also assess if there can be a link found between CSR and increased profit so that an alternative to the two grounds can be found…
The premise of the author is that corporate social responsibility positively influences the activities of corporations. Throughout the article there are multiple examples of large corporations using CRS to their advantage. Companies define their corporate social responsibility measures differently.
Quite a few of these actors and factors are already located in the developing world and more are being relocated. Many of these MNCs’ foreign affiliates and arm’s length suppliers thus are governed by different level of CSR procedures
The impact of society on business and vice versa is becoming increasingly propagated each year. A firm’s consumers, products, markets, equipment, productivity and public image are all directly influenced by the social policies of a firm. A firm’s social policy must be incorporated into all strategic-management activities and most importantly in the development of mission statement.
Corporate Social Responsibility. CSR is the framework that is used to measure the company’s performance in terms of economic, social or environmental factors that surround the company. A company should be responsible for what happens around it and should be involved in activities that bring development to the community at large.
Sentiments by economist such as Milton Friedman have attempted to assert that profitability is the core agenda for businesses (Friedman, 1970). However, contemporary businesses have the potential to engage in social responsibility and spur profit growth. Introduction The mix of ethics and business in the same breadth is at times seen as an oxymoron.
CSR is more often a part of the overall business model than a separate undertaking such that business operations are conducted within the stipulated limits. Over time, there has been a tendency for CSR activities to shift focus from business operations compliance to acts of greater social good.
The traditional business model mainly emphasized on the economic aspect of the organization and accordingly designed the activities. However, the recent scandals have put the trust of the stakeholders of the company at stake, which is augmenting the interest of the organizations to focus towards CSR.
Socially responsible actions indicate a firm's commitment to its society and community which results in increased consumer confidence and thus better performance. Donaldson and Werhane (1983) noted that "almost everybody believes that corporations should be concerned about something more than making money, that they have responsibilities not only to stockholders but to their employees, to their customers, to the communities in which they work and to society at large."
The overall research approach utilized the Qualitative Methodology. The Qualitative research is an important kind of scientific research. Scientific research consists of an investigation that : hopes to obtain answers to a question; systematically uses a predefined
34 pages (8500 words)Essay
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