The concept of CSR has emerged through the 21st-century effort to maximise sustainability. Moreover, CSR can be defined as corporate social responsibility, when firms voluntarily take ethical responsibility for all their stakeholders. This includes the actions of a firm to benefit society beyond its requirements. At the centre of CSR, is the element of voluntary action, which intends to promote morality thus undermining some of its criticism which may include that it is not the firm’s responsibility and this action is merely hypocritical window-dressing.
One of the criticisms of CSR is that it conflicts with the money-maximising nature of corporations. Economic pioneers such as Milton Freedman believe that the only social responsibility of businesses is to create profit and grow. This thus undermines the belief that firms should care for the wider economic and social community, instead, Freedman argues that this is the responsibility of our ‘neighbours’ who should take care of us, and we should take care of them. Moreover, Freedman argues that the maximisation of profit, betters the life of the workers of said firm, thus increasing their quality of life. Ultimately, without businesses, we would cease to operate, and it is through business that innovation and inspiration are bloomed. However, this view is countered by Soloman who said Freedman misinterprets this as ‘society is not a free for all’ and with great power and influence comes great responsibility to look after others.
Although Soloman’s optimism shows promise in our modern-day society, Freedman quickly discredits this notion by highlighting how he ignores the capitalistic and consumer-driven nature of Western society. An example of this is Rana Plaza, where factories in Bangladesh were poorly constructed and thus led to a mass collapse of infrastructure in 2003, claiming the lives of countless innocent workers. This is furthered by Alan Greenspan who said ‘ the opportunity to express greed has grown’ thus highlighting how the implementation of CSR is increasingly difficult in our world.
A utilitarian approach to CSR would argue that as long as it promotes the greatest good for the greatest amount of people, it is morally desirable. In a utopia, CSR would maximise the needs and utility of the wider community, outnumbering the firm, thus making it the correct choice. However, the improper execution of such in which the needs of the firm are held to a higher importance than the wider community. Matten argues that utility is highly compatible with a cost-benefit analysis of businesses as it maximises the needs of the masses rather than the individual.
A Kantian may argue that we have a duty to CSR due to the strict deontological nature of the theory. Furthermore, Kant’s assumption we are rational beings doesn’t work with the nature of firms as they must collect profit above all else, thus this is an impractical approach for them to follow. This was furthered by Nietzsche who called the unison of business ethics and Kantian Ethics abstract and ignorant of the complexities of corporate life.
However, some firms such as TOM’S have successfully implemented CSR into their daily routine. For example, the brand has funded many worker’s rights programs and donates a large sum of profit to philanthropist organisations. On the flip side, companies such as Traffigura, seek to minimise the cost of production and so dispose of their oil in underdeveloped countries which thus pollutes the ecosystem of the country around it. This is reflective of the exploitative nature of monopolies and thus a poor representation of the execution of CSR.
Although it may be difficult to implement CSR, the correct introduction of such into a brand - such as TOM’S - allows for the maximisation of profit and utility for all firms. It could be argued, that it is not the company’s role to ensure sustainable growth for the wider community, however growth in the wider community means more people will have a higher quality of life and thus have the means to consume and promote economic growth, thus reinforcing the maximisation of profit for the firms in question.
Written by Aurore Lebrun
https://www.investopedia.com/terms/c/corp-social-responsibility.asp#:~:text=Corporate%20social%20responsibility%20is%20a,positive%20brand%20image%20for%20companies.
Love these types of articles, well written
Amazing