When companies engage in socially responsible practices, the first concern is that managers will misappropriate corporate resources by diverting them from their rightful claimants, whether those are the firm's owners or, sometimes, employees.

A second concern is misallocation or inefficiency. Engaging in activities deemed "socially responsible," critics argue, entails diverting resources best used for economic purposes to advance purposes for which those resources are poorly suited. From this perspective, managers' social initiatives are akin to using a dishwasher to wash clothes. Corporations can contribute best to society if they do what they do best: employ a workforce to provide goods and services to the marketplace and, in so doing, fulfill people's needs and create wealth. Engaging in socially responsible activities is not what companies do best and, according to critics, is thus a poor allocation of corporate resources.

The third criticism has to do with due process and democratic institutions. Even laudable and noble actions taken by companies on behalf of society need to be taken in accord with procedures that respect rights and afford subsequent accountability. Some critics fear that socially responsible corporate activity encroaches upon the role of government and usurps authority reserved for elected officials and bodies answerable to the public.

Finally, critics worry about the psychological implications of asking managers to focus on dual objectives. Having to advance economic performance and be socially responsible, some argue, destines managers to do neither. Some fear it is a recipe for distraction, frustrating managers' efforts to advance either objective and, worse yet, providing managers with a convenient excuse when they fail to achieve economic objectives. Mismanagement can be attributed to efforts to be "socially responsible."

.....but the world is turning to corporations to do more than meet financial demands.

Why? Largely because people see the tremendous capabilities that companies have. How can companies respond effectively? Searching for ways that organizations can deliver value to society along multiple dimensions is the challenge before researchers and business leaders.

.... read the rest of the interesting thoughts in http://www.hbsworkingknowledge.hbs.edu/item.jhtml?id=4129&t=nonprofit