Arguments For & Against Corporate Social Responsibility

by Neil Kokemuller; Updated September 26, 2017

Corporate social responsibility, or CSR, includes engaging in community activities, volunteering and giving back to society. Arguments for CSR center on the brand-building benefits and the positive engagement with various corporate stakeholders. Detractors point out that CSR is expensive and distracting and may backfire when it's disingenuous.

Arguments for Corporate Social Responsibility

Whether you like it or not, community members and customers form perceptions about companies based on their level of commitment to socially responsible behavior. Thus, a primary argument for CSR is that your company may receive negative backlash for irresponsible operations. In contrast, charitable giving and social involvement can generate favorable publicity, which helps build your brand and attract customers.

CSR also creates significant engagement with your employees, communities and customers. Employees who have a strong passion for certain charitable causes, business ethics or the environment are happier when working for organizations that commit to these things, according to Forbes. Happy employees produce more, stay with the company longer and act in the best interests of your customers. Customers feel the same level of commitment to companies that practice CSR. If a customer has a choice between equal, competing brands, he is often likely to select the one that is more socially responsible.

Arguments Against Corporate Social Responsibility

Investing in CSR initiatives can cost thousands or even millions of dollars, depending on the size and scope of your industry. While some companies believe there is a positive return on investment from CSR, measuring the bottom-line results is difficult. Costs include direct donations to nonprofits, employee volunteer time allocation, nonrevenue community involvement and environmental program management.

Other key arguments against CSR include that it distracts company leaders and employees from the business mission and can backfire when leaders are more concerned about publicity than profitability. Shareholders sometimes feel that organizations that are too involved in social initiatives aren't involved enough in profit-building activities. Time magazine in a December 2013 article also reported that some business executives who get caught up in the publicity hunt with CSR are more likely to engage in morally corrupt behaviors. Rather than letting correct decisions and actions result in unsolicited publicity, these leaders commit more time to generating buzz than formulating morally sound judgments.

Warnings

  • Egotistical self-praise and cheerleading by company CEOs are warning signs of disingenuous corporate social responsibility, according to Time.

About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.