We discern four central
criticisms of corporate social responsibility.
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