What Are the Disadvantages of Corporate Social Responsibility?

by Cathy Habas - Updated June 27, 2018
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Corporate Social Responsibility, or CSR, refers to ethical business practices that aim to benefit the community, the environment, and employees and their families. Modern consumers have a healthy awareness of the role corporations play in enacting social and political change. They often make purchasing decisions based as much on corporate social responsibility as on the products or services themselves. If you keep your finger on the pulse of your community's viewpoints and needs, corporate social responsibility can work in your favor. But if you're out of tune with the issues that matter to your customers or you happen to face a setback in your efforts, corporate social responsibility can backfire. Understanding these disadvantages is the first step toward avoiding them.

Corporate Social Responsibility Can Mean Greater Scrutiny

When you plan a CSR strategy, don't just quietly go about executing it. Part of the goal of CSR is to show that you care about the community you call home, thereby making consumers feel good about giving you their business. Press releases will help you get the word out, but once you've announced your CSR gameplan, be ready to back it up with future success. A failed CSR plan can ultimately fare worse for your company than no CSR at all. Use corporate social responsibility to show consumers that you follow through with your promises and put your money where your mouth is. Press releases that prove to be false promises over time lead to greater scrutiny from both the media and consumers. You have a chance to earn their trust, so make sure all your ducks are in a row before making any announcements.

On the other hand, some small businesses may choose to conduct their CSR quietly, releasing an annual report to show consumers what they've already accomplished in the past year. This takes a little pressure off the business to fulfill its promises, while still giving it a chance to impress consumers.

Corporate Socially Responsibility Isn't Always Cheap

From an administrative perspective, CSR strategies can end up being expensive endeavors with difficult-to-track return on investment. After all, you must pay a team of people to devise and execute a corporate social responsibility plan, and their salaries alone can be difficult for some small businesses to stomach. Plus, CSR campaigns often have a financial component, whether it's donating money outright or allowing employees to spend a day out of the office doing volunteer work. But small businesses can still find ways to balance CSR efforts with profitability. Often, social responsibility begins with employee-friendly policies, like paid sick days and vacation time. Keeping CSR in mind when conducting marketing campaigns also helps to make sure your overall message is on point.

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Take Care to Gauge Your Audience

A final disadvantage of CSR is that it can be easy to misinterpret your community's or consumers' values. For example, you might decide that sending employees on a mission trip to another country is the perfect way to show that you care about people in every corner of the globe. But if most of your consumers and employees live in a totally different country or region, they may be upset because you did not choose to dedicate resources to local issues.

Understanding the values that your employees, community and consumers have in common helps lead to a successful and profitable CSR campaign. Without a unifying message, your corporate social responsibility strategy will struggle to succeed.

About the Author

Cathy Habas has spent her writing career intimately involved with small businesses. She specializes in marketing, customer experiences, and behind-the-scenes management.

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