Thumbs Down CSR

As with all things, there are pros and cons. Some of the up points for CSR have already been mentioned in a previous post. It's the turn for the down points now.

CSR is unrelated to the primary aim of business which is to make a profit for its shareholders. This argument against CSR stems from the perception that social responsibility means being philanthropic - giving money to charity. Thus, it is tantamount to taking money from shareholders and giving it to others.

Another point of debate is that companies are in the business of producing and selling goods and services to satisfy needs and wants. Managers should therefore use all available resources to concentrate on this function. Welfare of society should best be left to the government. Managers are not trained nor do they have the expertise to manage society's problems.

There ain't no free lunch in this world. Implementing social responsibility initiatives involves costs which someone would have to bear. Critics of CSR contend that these costs are passed on to consumers in the form of higher prices. On top of this, the higher costs also become a source of competitive disadvantage to businesses.

CSR is often seen as a public relations exercise. The aim is project a good image for the company and to keep the government at arm's length. It is therefore not a sincere act on the part of the company caring for society's welfare. CSR is merely a tool to serve the self-interest of the company.