the Case against Corporate Social Responsibility
Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com
See a sample reprint in PDF format. Order a reprint of this article now
JR: EXEC ADVISER AUG 10
The Case Against Corporate Social Responsibility
The idea that companies have a duty to address social ills is not just flawed, argues
Aneel Karnani. It also makes it more likely that we'll ignore the real solutions to these problems.
By ANEEL KARNANI
August 23, 2010
Can companies do well by doing good? Yes—sometimes.
Journal Report
Read the complete WSJ Executive Adviser report .
But the idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed.
WSJ Podcast
Large companies now routinely claim that they aren't in business just for the profits, that they're also intent on serving some larger social purpose. They trumpet their efforts to produce healthier foods or more fuelefficient vehicles, conserve energy and other resources in their operations, or otherwise make the world a better place. Influential institutions like the Academy of Management and the United Nations, among many others, encourage companies to pursue such strategies.
Hear Aneel Karnani, Professor of Strategy at the
University of Michigan's Stephen M Ross School of
Business, discuss why the concept of Corporate
Social Responsibility is flawed .
It's not surprising that this idea has won over so many people—it's a very appealing proposition. You can have your cake and eat it too!
But it's an illusion, and a potentially dangerous one.
Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will
end
See a sample reprint in PDF format. Order a reprint of this article now
JR: EXEC ADVISER AUG 10
The Case Against Corporate Social Responsibility
The idea that companies have a duty to address social ills is not just flawed, argues
Aneel Karnani. It also makes it more likely that we'll ignore the real solutions to these problems.
By ANEEL KARNANI
August 23, 2010
Can companies do well by doing good? Yes—sometimes.
Journal Report
Read the complete WSJ Executive Adviser report .
But the idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed.
WSJ Podcast
Large companies now routinely claim that they aren't in business just for the profits, that they're also intent on serving some larger social purpose. They trumpet their efforts to produce healthier foods or more fuelefficient vehicles, conserve energy and other resources in their operations, or otherwise make the world a better place. Influential institutions like the Academy of Management and the United Nations, among many others, encourage companies to pursue such strategies.
Hear Aneel Karnani, Professor of Strategy at the
University of Michigan's Stephen M Ross School of
Business, discuss why the concept of Corporate
Social Responsibility is flawed .
It's not surprising that this idea has won over so many people—it's a very appealing proposition. You can have your cake and eat it too!
But it's an illusion, and a potentially dangerous one.
Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will
end