Corporate Social Responsibility Essay Example | Topics and Well Written Essays - 2500 words

Corporate Social Responsibility - Essay Example Corporate social responsibility, though very important, may rarely come without serious concern for better financial performance or increased market share. In other words, studies reveal that managers are more likely to opt for investment in social ventures if they are certain of monetary gains. Since in most cases social responsibility is closely linked with better financial performance, thus managers are willing to invest in ventures for the public good. Lydenberg et al. (1986) maintain that "Companies fight hard for even a small percentage gain in market share for their products. If and when corporate managers become convinced that their company's social record affects market share, they will be forced to take social initiatives seriously." Social responsibility has also become a buzzword because of the availability of a large variety of similar goods. When a product comes into the market, it has to fight very hard for consumer's attention because there are several other rival goods competing for the same. A marketing and design consultant (Neuborne, 1991) states: "There was a time when you bought a product just for its price or performance...but with the number of products available, it is increasingly difficult to differentiate one product from another." In this situation, a consumer may base his buying decision on a company's image and its commitment to public good. This is clearly indicated by a book, 'Shopping for a Better World' that has been selling millions of copies since it first came out in the market. the book rates and ranks companies according to their social responsibility performance. As a result of this in 1989 alone, 78% of buyers switched brands. (Davids1990). World Bank defines CSR as: "Corporate So cial Responsibility is a term describing a company's obligations to be accountable to all of its stakeholders in all its operations and activities." While it is now true that corporate social responsibility is highly desired, it has not always been the accepted practice for corporations. In 2004, for example, Henry Miller in The Miami Herald, Henry Miller wrote, "Businesses do not have social responsibilities; only people do." (Miller, 2004). Similarly 'The Economist' failed to see why corporations must be forced to adopt a socially responsible framework. Thus in its 2005, issue The Economist skeptically reviewed the firms that were contributing to tsunami relief effort: "All things considered, there is much to be said for leaving social and economic policy to governments."(The Economist) Milton Friedman was probably the first theorist and economic expert to reject the theory of "social conscience of business" when in 1970 essay, he declared: "There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits."