A combination of the October 25th class on CSR & Sustainability and a passage in my Microeconomics textbook on the behaviour of firms sparked curiosity in me about the concept of corporate social responsibility. What I began to realize was that between two theories I had learned in the span of three days, there lay subtle but compelling contradictions. The idea behind the CSR theme in class was that in order to maintain a socially responsible business model, companies should act a manner that will benefit society. Conversely, my textbook stressed that in order to benefit society, companies should act in a manner that benefitted themselves. Naturally, the textbook forced me to take a step back and consider the implications. Would it be responsible to take capital invested by shareholders and use it towards purposes that wouldn’t increase the return on their investments? Or would it be responsible to charge customers a particular price for a product in which a portion of that price will be spent on social causes – without our knowing? In my opinion, the answer is no. As much as shareholders expect the highest possible return on their investment, consumers expect that the price they’re paying is going towards the purchase, and not towards a cause in which they may or may not support.
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References:
http://en.wikipedia.org/wiki/Corporate_social_responsibility
http://online.wsj.com/article/SB10001424052748703338004575230112664504890.html
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