Essay on Does CSR Work?

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Does CSR Work?

Adam Smith founded the modern study of economics on the premise that all businesses are driven by the invisible hand to seek as much profit as possible while society will take care of itself. However, as the public’s opinion of big business has steadily declined in the recent decades, big business has developed a social conscience to improve all aspects of society from worker compensation to protecting the environment to helping the needy. As Stephen Cook indicates in the January 2003 edition of Management Today: “Everyone cares these days. You can hardly walk through the door of a major company in the western world without tripping over stacks of glossy reports telling you how they care for the environment, their
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Ruggie indicates that coke has spent $5 million a year to combat AIDS for African bottlers’ employees. While hard numbers such as these bring the consumer satisfaction while quelling the uproar of social activist groups, Cook indicates that many reports do not tell the whole truth. Cook cites Craig Bennett of Friends of the Earth: “Oil companies are presenting themselves as solar companies, and companies that promote giant agribusiness and oppose consumer information are claiming to be the solution to world hunger.” While clever public relations and glossy reports may seem like the easy way out, big companies are realizing more and more that hiding the truth isn’t flying with the public anymore. The best example of public dismay is Enron. Once a highly touted company, both on the business and CSR side, Enron has since collapsed in a massive scandal that has both killed its reputation and its profits.

The main problem with certification is the lack of a standard. Gereffi et al. indicates four distinct categories of certification: first party, where the company sets its own rules; second party, where an industry sets the certification rules; third party, where non-governmental organizations set the certification rules; and fourth party, where the government sets the certification rules. The plethora of rule setting bodies has created general disagreement as to the extent of a company must be socially

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