The arguments against Corporate Social Responsibility (CSR) include the belief that a business’s primary goal is to maximize profits, lack of expertise or resources, dilution of focus, potential conflicts of interest, unfair expectations, lack of accountability, and the practice of “greenwashing” or making false claims about CSR activities.
However, despite these arguments, many companies still recognize the importance of social and environmental responsibility and are taking steps to address these issues.
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Arguments Against CSR
- Businesses are owned by their shareholders
- Responsibility of Politicians to Deal With Social Issues
- Management should focus on company’s core business, not resources on CSR
Thus any money they spend on social responsibility is effectively theft from those shareholders who can, after all, decide for themselves if they want to do things beyond mere compliance, donate to charitable causes or have business standards which are convenient to them.
Explanation: This is the most commonly voiced argument of those questioning the viability of CSR today. CSR does not mean that a company should give away their money that rightfully belongs to the shareholders to charity just for the sake of it. If CSR is seen as a process by which the business manages its relationships with a variety of influential stakeholders who can have a real influence on its license to operate, the business case becomes immediately apparent.
Every business today has to manage its primary and secondary stakeholders, as stakeholder management results in higher profits, lesser employee turnover, better supplier and government relationships, which are essential for an organisation to sustain.
Each stakeholder demands organisations to fulfil their demands. For instance, consumers today want to buy products from companies they trust, suppliers want to form business partnerships with companies they can rely on, employees want to work for companies they respect and investors want to invest in responsible companies.
CSR is about building relationships with customers, about attracting and retaining talented staff, about managing risk, and about assuring good reputation. Hence there is a need to balance stakeholder responsibility to ensure higher and consistent returns to the stockholders.
It is the responsibility of the politicians to deal with social issues. It is not the role of a corporation to get involved in social issues.
Explanation: Due to the on-going globalisation, businesses today have greater power and leverage to induce changes in public policies and achieve better results than the government institutions.
In order to further the profits, companies often spend a considerable amount of time and money to influence policies affecting them or their area of interest, which can range far and wide – from international treaties on climate change, to domestic policies on health (such as that relating to smoking) or transport.
The lobbying activities of companies show that both business and social goals are at times interdependent. Viewed from this context CSR is all about a strategy which helps businesses to manage the risks and reputation in the market.
Businesses rely on societies within which they operate and cannot exist in isolation. They need infrastructure, employees and consumer base all of which comes from society. Investing in societal development is indeed creating markets for the future and ensures long term sustainability.
Management should focus on company’s core business, not resources on CSR
CSR might make sense if perceived not as extra work but to integrate it with core business like designing environmental systems, waste management systems, recycling paper, water and other resources which will contribute to the generation of future profits just like any other investments