First, read The Case Against Corporate Social Responsibility.doc in this week's Required Resource folder. Then note what follows below before attempting to post.
The author argues that managers who sacrifice profit for the common good are in effect imposing a tax on their shareholders and arbitrarily deciding how that money should be spent. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they did so in a meaningful (i.e.,high cost to profits) manner. They are, after all, paid to achieve business objectives, not use shareholder money to engineer the public good (assuming there is agreement on what, exactly, that is.)
Before responding to the questions below ask yourself the following: 1) is it true that "...doing what's best for society necessarily means sacrificing profits," 2)are shareholders the only important and influential stakeholders in deciding how best to pursue corporate objectives, and 3) is government regulation,supplemented by self-regulation and civil society, the most effective way to strike a balance between profits and the public good?
Based on your individual conclusions regarding the above, answer the following questions:
Are profits and the general welfare basically incompatible? Why or why not?
If you believe CSR requires the sacrifice of some amount of profit, what amount is appropriate? Is that amount the same for all firms in all industries? How should the CEO decide?