“If a business wants to maximize profit, it cannot be concerned with corporate social responsibility’. Critically discuss this statement.”
Corporate social responsibility is a significant issue in the current business environment. There is now a significant shift in businesses to become recognized as being socially responsible whilst achieving the primary business objective of profit maximization. Business now strive particularly to reach the triple bottom line as a key objective as it incorporates; people planet and profit objectives. Corporate social responsibility is often difficult to define, as there are many different definitions and understandings amongst academics and professionals. However corporate social responsibility can broadly be defined as a ‘‘concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’’ (Falkenberg and Brunsæl 2012). The relationship between socially responsible business actions and profit maximization is generally mixed and controversial. Generally the view is that in order for a business to undertake socially responsible practices there is often increased financial and non-financial costs in order to ensure this and thus leading to decreased profits in the short term. However it is also evident that socially responsible business actions and strong relationships with business stakeholders may lead to significant long-term profit maximization.
Corporate social responsibility is now an essential factor within business management. A firm’s corporate social responsibility must be evident throughout all its business functions, in which the ethics and values of the business must align to meet all stakeholder expectations. Including social, environmental and ethical factors of business. In the article “Is harm reduction profitable? An analytical framework for corporate social responsibility based on an epidemic model of addictive consumption” (Massin 2012) the corporate social responsibility of firms in the industry of addictive substances, most noteworthy, gambling, cigarettes, and alcohol. There is a significant paradox in relation to producers within these industries and their socially responsible claims. “These firms claim to be socially responsible while marketing a product clearly identified and harmful” (Massin 2012). The paper generally focuses on the substances of alcohol, cigarettes and gambling, as it is these products “whose consumption shares the dual characteristic of being at risk of leading the users to gradually lose control over their consumption and of generating health and social damage.” (Massin 2012) thus highlighting the contradiction of the producer’s claims of being socially responsible whilst selling these highly addictive products. Within the industries of addictive goods firms cannot be completely socially responsible, as this would involve the removal of these products from the market. Thus highlighting the inability for producers of addictive products to achieve corporate social responsibility. Therefore illustrating the inability of firms in these industries to be socially responsible whilst still achieving the primary business goal of profit maximization. Corporate social responsibility involves business firms aligning their values with those of their stakeholders. There are many significant stakeholders of business, including shareholders, managers, employees and society. Another significant business stakeholder is that of the environment. A socially responsible business is viewed to have open and accountable business actions based on respect for the community, society and the broader environment, and not just legal regulations. This therefore means a socially responsible business ensures it takes into account environmental stability and sustainability. In the article “Environmental corporate social responsibility and financial performance...
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