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Business Horizons (2010) 53, 445—453
www.elsevier.com/locate/bushor
EXECUTIVE DIGEST
The benefits and costs of corporate social responsibility Geoffrey B. Sprinkle *, Laureen A. Maines
Kelley School of Business, Indiana University, 1309 East 10th Street, Bloomington, IN 47405-1701, U.S.A.
1. Perspectives on corporate social responsibility Business leaders have expressed far-ranging and deeply-held opinions about corporate social responsibility (CSR). Nobel Prize-winning economist Milton
Friedman (1970) succinctly expressed one viewpoint on CSR in his article The Social Responsibility of
Business is to Increase Its Profits. John Mackey, the founder of Whole Foods, advanced a different viewpoint when he stated: ‘‘The business model that
Whole Foods has embraced could represent a new form of capitalism, one that more consciously works for the common good instead of depending solely on the ‘invisible hand’ to generate positive results for society’’ (‘‘Rethinking,’’ 2005).
Regardless of business leaders’ fundamental beliefs about CSR, they cannot ignore the implications of CSR for their businesses. Accordingly, our goal in this article is to provide some guidance for organizations that wish to assess the benefits and costs of CSR.
Knowledge of these benefits and costs can inform managers’ decisions on their companies’ positions on
CSR and provide input on CSR endeavors. Because accounting plays a vital measurement role in organizations, we focus on the interplay between accounting and corporate social responsibility.
* Corresponding author.
E-mail addresses: sprinkle@indiana.edu (G.B. Sprinkle), lmaines@indiana.edu (L.A. Maines).
We first provide an overarching definition of corporate social responsibility and categorize the various types of socially responsible endeavors in order to identify activities associated with CSR that create costs. Following this, we articulate firms’ likely motivations for engaging in CSR in order to
www.elsevier.com/locate/bushor
EXECUTIVE DIGEST
The benefits and costs of corporate social responsibility Geoffrey B. Sprinkle *, Laureen A. Maines
Kelley School of Business, Indiana University, 1309 East 10th Street, Bloomington, IN 47405-1701, U.S.A.
1. Perspectives on corporate social responsibility Business leaders have expressed far-ranging and deeply-held opinions about corporate social responsibility (CSR). Nobel Prize-winning economist Milton
Friedman (1970) succinctly expressed one viewpoint on CSR in his article The Social Responsibility of
Business is to Increase Its Profits. John Mackey, the founder of Whole Foods, advanced a different viewpoint when he stated: ‘‘The business model that
Whole Foods has embraced could represent a new form of capitalism, one that more consciously works for the common good instead of depending solely on the ‘invisible hand’ to generate positive results for society’’ (‘‘Rethinking,’’ 2005).
Regardless of business leaders’ fundamental beliefs about CSR, they cannot ignore the implications of CSR for their businesses. Accordingly, our goal in this article is to provide some guidance for organizations that wish to assess the benefits and costs of CSR.
Knowledge of these benefits and costs can inform managers’ decisions on their companies’ positions on
CSR and provide input on CSR endeavors. Because accounting plays a vital measurement role in organizations, we focus on the interplay between accounting and corporate social responsibility.
* Corresponding author.
E-mail addresses: sprinkle@indiana.edu (G.B. Sprinkle), lmaines@indiana.edu (L.A. Maines).
We first provide an overarching definition of corporate social responsibility and categorize the various types of socially responsible endeavors in order to identify activities associated with CSR that create costs. Following this, we articulate firms’ likely motivations for engaging in CSR in order to
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