Does CSR Work? Essays -- Business Essays

Does CSR Work? Adam Smith founded the modern study of economics on the premise that all businesses are driven by the invisible hand to seek as much profit as possible while society will take care of itself. However, as the public’s opinion of big business has steadily declined in the recent decades, big business has developed a social conscience to improve all aspects of society from worker compensation to protecting the environment to helping the needy. As Stephen Cook indicates in the January 2003 edition of Management Today: â€Å"Everyone cares these days. You can hardly walk through the door of a major company in the western world without tripping over stacks of glossy reports telling you how they care for the environment, their community, their stakeholders.† John G. Ruggie believes that the increase in corporate social responsibility (CSR) stems from three reasons: 1) companies have made themselves targets by doing â€Å"bad† things in the past (Shell in Nigeria; N ike in Indonesia), 2)public perception that the global marketplace is more police-able and international rules and standards are more enforceable, 3) companies large growth as made them the only ones capable of policing themselves in a global capacity. However, two questions arise from this new branch of the corporate hierarchy: 1) does CSR produce results? And 2) does the public care about CSR. Gereffi et al. and John G. Ruggie both indicate that the social pressure has pushed corporations to act: Under increasing pressure from environmental and labor activists, multilateral organizations, and regulatory agencies in their home countries, multinational firms are implementing â€Å"certification† arrangements—codes of conduct, production guidelines, and monit... ...ally responsible, only a minority will punish socially irresponsible companies. Cook indicates similar trends in the UK where only 20% of the people would be prepared to boycott a product on social grounds. Cook, goes on to indicate, however, that the number of people who care is steadily increasing: â€Å"there’s been a 40% surge in UK purchases of ‘fair trade’ products giving a better deal to third world farmers.† As more and more of the world’s population becomes aware of the growing need for corporations to maintain a strong sense of social responsibility, corporations are adopting self-regulatory policies to please the public and enhance their own reputation. All this benefits both the consumers and corporations until a company makes another Enron-like blunder. Then all the good credentials these pacesetting companies have accumulated disappears instantly.