What Are The Disadvantages Corporate Social Responsibility?

August 19, 2010

Question: I want to know what are the disadvantages corporate social responsibility?

Answer: The cost to the company and stakeholders. But overall, social responsibility should be viewed as a good thing. It fosters a good corporate image.

Commercial organisations – especially big businesses tend to argue for self-regulation. They want to be free to police themselves – but there is no evidence that this ever works. The imperative of a company is overwhelmingly a shareholder driven imperative – indeed the law states that it must be. So for a corporation to suggest that it follows self-imposed “Corporate Social Responsibility” rules is so much poppycock. When faced with the choice between profits and principles they will choose profits 99% of the time! So government HAS to legislate to curb the powers of business and ensure that they serve more than the narrow self-interest of their shareholders. Nobody else will do it!