The debate on corporate social responsibility has mainly focused on whether corporations need to pay more attention to profit maximization or need to focus on the needs of the society. Corporate social responsibility requires companies to focus on the needs of the society from which they derive their profits. It challenges the companies to participate in the increased welfare of the society not only through the production of quality products but also involvement in other activities that increase the living standards of the people within the society.
Consequently, companies have to participate in projects that are not related to their business and as such, there are no profits expected for such projects. Several reasons have been brought forward for and against corporate social responsibility. Therefore, it is important for corporate executives to strike a balance between profit maximization objectives of companies and the corporate social responsibility.
Innumerable reasons have been given in support of CSR. To start with, corporate social responsibility has been associated with the recruitment of highly talented and experienced employees (Schwartz, 2011). Such employees look for companies that engage in corporate social responsibility. Secondly, companies that engage in CSR often obtain a competitive edge over their counterparts that do not. For instance, prospective clients are already involved in CSR opt for companies that have CSR programmes. Thirdly, a company that participates in CSR highly creates an awareness of its brand to the customers. By participating in corporate social responsibility, a company obtains the best form of brand advertising from the media without incurring any expense. Consequently, the company’s brand is most likely to rise to levels of prominence due to the ethical values attached to it.
Another propensity for the increased call for companies to participate in CSR has to do with the attention towards caring for the environment. Many consumers, decision makers and business entities consider programmes towards conservation of the environment and reduction of pollution a noble undertaking (Schwartz, 2011). Consequently, when companies create their CSR based on environmental conservation, there is a high likelihood that cost of raw materials and business operational costs will be greatly reduced. Additionally, the number of legislations towards ethical practice in business and environmental conservation are increasing making it mandatory for companies to participate in CSR. Moreover, companies that are seen to spearhead CSR programmes are likely to enjoy generous leverage levels from legislators. Finally, an organization known to participate in CSR heavily is likely to be forgiven by the society for little mistakes made in its business activities.
In spite of the many arguments for CSR, several reasons against it have been put forward (Schwartz, 2011). Firstly, there is a high likelihood for the level of social welfare to be increased if companies are left to purely engage in profit maximization. Secondly, many people against CSR concept argue that companies are formed with the sole goal of making profits and not charity organizations. As such, CSR programmes are better addressed by non-profit making organizations and the government.
Thirdly, CSR programmes require so much time to implement apart from the cost incurred by companies. Therefore, the time spent in implementing CSR programmes can be invested in creating more profits. Moreover, corporate executives are trained to purely maximize profits as opposed to making social policies. As such, CSR programmes should be undertaken by organizations formed purely for such undertakings and manned by the rightful people. In a nutshell, CSR has, is and will continue to elicit intense debate among diverse groups of people. A company needs to analyze itself well before deciding on whether or not to engage in CSR.