The Benefits and Costs of Corporate Social Responsibility – Critique
The article focuses on why companies engage in corporate social responsibility and the costs and benefits that may result. The many reasons that motivate companies to include CSR in its operations range from wanting to be good global citizens, trying to look good in the eyes of different stakeholder groups, trying to retain employees, drawing consumers to buy a company’s products or services, environmental concerns, or trying to reduce being the target of additional regulations. Identifying costs and benefits and estimating costs and benefits are measurements that may be useful to managers in their assessment of CSR. There were various examples illustrating the measurement of CSR costs, i.e., cash contributions less the reduction in taxes, product contributions and product cost in terms of labor, materials and overhead, opportunity costs like investments that may have yielded more return than the cash or product contributions. CSR benefits were also presented with examples like tax credits to companies for sustainability efforts and using “green” materials and practices in construction of buildings. Free advertising as a result of some corporate good deeds is beneficial in terms of reputation and maybe even sales. Recruiting and retention of employees can be a benefit by having motivated and loyal employees that want to work for a company that’s recognized as “socially responsible.”
There is much support for the various parts in the article. There were many perspectives and definitions for CSR along with examples and illustrations. The reasons companies engage in CSR were enumerated and supported by practical examples from existing businesses. Measuring the costs and benefits of CSR were attached to measurements used in accounting. The measurements were explained in terms of identifying and estimating costs and benefits. These in turn had to be mapped to activities that incurred...
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