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Corporate Responsibility: How Some Argue Against It
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Corporate Responsibility: How Some Argue Against It - Executive Leadership Articles

Corporate Responsibility: How Some Argue Against It

Executive Leadership Articles

Corporate Responsibility: How Some Argue Against It

In previous articles, we’ve looked at the benefits of corporate social responsibility (CSR) with an emphasis on how it helps everyone involved. We underscored the importance of not thinking of it as charity, but realizing that it’s (financially) profitable and contributes to a company’s well-being. Aside from the work and expense involved in shaping a company’s CSR culture and practice where perhaps they didn’t exist before, it would seem that there would be no downside to CSR, not when its underlying motivation is to work for the betterment of that “triple bottom line” of profit, people, and planet. Yet there are a few arguments presented here and there against corporate social responsibility. We present them here with a few words of rebuttal.

The strongest argument against CSR says that “the business of business is business,” and in a capitalist society, the most beneficial thing a company can do is to maximize its profit. It is the job, the argument goes, of any manager to earn as much money as he or she can for the benefit of shareholders. Taking some profit and spending it on social good is essentially spending shareholder money and using it for some pet social cause, when it would make more sense to give that money to shareholders and let them use it to support their own causes. When all companies strive to do well (as opposed to doing good), the economy thrives and everyone is better off.

This argument takes one narrow aspect of CSR and disregards the rest. As we’ve presented before, the argument for CSR is that when done thoughtfully, it’s for the company’s own good—it contributes to its own sustainability and long-term viability when it invests in its community, its environment, and its employees. CSR is not just taking a portion of the profits and giving it to a charity; it is investing its profits partially toward improving (and sustaining) those things that make the company healthy and therefore profitable.

Another claim against CSR is that it’s often offered not in the spirit of mutual benefit, but that it is a disguise for good public relations. This argument says that CSR is really about making a company look good, rather than letting the company do good. While the result may often be the same, because it is motivated by appearances rather than genuine results, it can often be aimed where it will get the best press, rather than where it will do the most good.

It’s difficult to counter this claim, because people will believe what they will. This is more a philosophical position than a practical one, addressing the age-old conundrum of whether or not a good deed is still a good deed if it is done for the wrong reasons. The answer is left to the individual, but perhaps on a larger scale, one could argue that companies practicing CSR for the wrong reasons are more likely to do it wrong, to focus their energies and assets not where they will most aim for that triple bottom line, and therefore not contribute to their own well-being.

A third argument against CSR is that in a capitalist, democratic society, it is the job of enterprise to make money, while it is the job of government to attend to social issues. There are two sections to this position, one which says that companies addressing social issues give the citizenry and its government a sense that businesses will take care of society’s problems, thus alleviating them of the need to do anything themselves. The other section of this claim is that CSR takes the decision-making out of the hands of the electorate by deciding for itself how and where money will be spent on social needs. This is especially true of publicly held companies.

One almost wishes this third argument to be true, that so many companies were spending so much money on social good that they were getting in the way of private citizens and public government in their efforts to meet societal need. Perhaps in the long run, some time in a distant future where the supply of corporate help is greater than the demand for it, this might be a very real issue. There does seem to be a certain amount of idealistic legitimacy to it, but current evidence would seem to indicate that while there will always be need, companies can not only address areas of that need which affect their business, but they can make positive steps in addressing that need, more efficiently than many governments.

 

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Corporate Responsibility: How Some Argue Against It - Executive Leadership Articles

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