With reference to your own research and the item above, do you think that the ability of a business to act successfully in a socially responsible manner is mainly determined by the products it produces?
Corporate social responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
The level of corporate social responsibility that a firm upholds is determined, to an extent, by the nature of the businesses products. This is demonstrated by BP, despite the company actively engaging in some CSR policies, goods such as oil are inherently harmful for the environment and therefore society. In 2010 BP failed to act successfully in socially responsible manner as 210million gallons of oil was spilled into the Gulf of Mexico. It can be argued that the main reason the company failed to act in a socially responsible manner is due to the nature of the product it produces as oil extraction is a complex process and any problems during extraction can have catastrophic consequences for the environment. It is generally considered that people who buy oil from BP won’t be concerned with the environment as they are purchasing products that have notable negative externalities. This in turn limits the incentive for BP to engage in CSR as customers will purchase their goods regardless of CSR so significant CSR activities will only increase costs and reduce company profits. To the extent that the product determines whether a firm acts successfully in a socially responsible manner depends on how strong the demand is for the product and the customers and stakeholder’s views on CSR.
Similarly if a firm produces products for people who are concerned about the environment, the business may engage in a much higher level of corporate social responsibility as it is more important to their...
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