Argument For Corporate Social Responsibility

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Arguing for Corporate Social Responsibility Introduction: The Corporate Social Responsibility (CSR) originated in 19537 with the publication of Bowen’s book Social Responsibilities of Businessmen (Carrol, 1999). Some perceived that at that time, the emphasis is placed on business people’s social conscience, rather than on the company itself. Some argue that corporate entities do not have any social responsibility except the ones that were written in agreement with government while establishing corporate entities, whereas others justify that corporate entities do have social responsibility. The roots of critics of CSR are so old that it is a challenge to the neoclassical business model itself (Valor, 2005). According to Smith (2005), there…show more content…
Additionally he argues that CSR is against the nature of a free economy But, there are some evidences to counter argue to this premises. We argue that firms often engage in CSR “precisely because it enhances shareholder value” and, more specifically, that some CSR activities “create goodwill among consumers in excess of their price tag. Margolis and Walsh (2001) reviewed the studies that investigated the relationship between CSR and the corporate financial performance in past 30 years. They found that more than 50% of the studies shown that CSR performance of the company is positively related with the corporate financial performance. Competitive Disadvantage Friedman (2007) further argues that socially responsible firms will be at a competitive disadvantage due to the added expense incurred by CSR activities. Counter to this Smith (2002) with the evidences drawn from the case of Alfred Sloan’s decision proves that CSR doesn’t bring the competitive disadvantage with it. He argues that, firms that have good SCR record in public will be given better brand image and the investors will show more trust in such companies. Hence even though the companies initially lose their part of profit o CSR, they will after a period of time, attract more and more investors and broaden their consumer base which improves both the investment and gives advantage of efficiency due to large scale of operation. Farness argument:
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