Walmart and CSR?

Corporate Social Responsibility (or CSR) is an important factor in business where companies are believed to have a responsibility to create a positive impact to the society. However, sometimes businesses are not ‘socially responsible,’ for example, Walmart.

As stated in¬†Mahesh’s blog post,¬†Walmart has been forced to pay millions of dollars to the government for violating air and water pollution legislation. Not only this, but they have also been unethical in ways where they have not paid overtime workers and discriminating female workers.

On one hand, I do agree that Walmart has been acting unethically and they should stop doing so. On the other hand, it is also true that paying workers their extra time would be costly. Not to be cynical, but the two situations show a business’ opportunity cost for doing one over the other. As a business becomes more ‘socially responsible,’ they increase costs of the business. This would go against the business’ goal of aiming for getting a higher profit (assuming that the business’ revenues stay the same).

However, becoming more socially responsible will create a better image for the business. It can be predicted that as a firm gains a better image in the market, this can contribute to a possible increase in sales and hence an increase in profits (assuming that costs stay the same).

I personally believe that as Walmart aims to become more socially responsible, they can aim to earn profits in the long run, as which is similar to what Mahesh stated in the blog.

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