Examination 2
PROS AND CONS OF CSR
Schnitzer, Chiara
7641632ETHC 3P82
Chiara Schnitzer
ETHC 3P82
7641632
Part 1 - The Case Against CSR From The “Right”
The case against Corporate Social Responsibility (CSR) from the "right" side argues that CSR
imposes an excessive burden on businesses. This viewpoint finds a prominent advocate in Milton
Friedman who emphasizes his perspecNve in his influenNal essay “The Social Responsibility Of
Business Is to Increase Its Profits”. Friedman’s central argument revolves around the idea that a
business should have a single focus: to increase its profits as well as protecNng and serving the
interests of their owner rather than taking on social responsibiliNes.
According to Friedman, businesses should not be expected to take on social responsibility roles
like to provide employment, to reduce polluNon, and to fight discriminaNon. In this arNcle he
criNcizes the concept of a business having to promote social objecNves, which is according to
Friedman a form of socialism. In his perspecNve, businesses should rather be accountable to their
owners than to the society and act in alignment with their desires and profit-driven objecNves.
Friedman’s criNque extends to the noNon that businesses should engage in acNviNes that are not
in the best interests of their stakeholders. He argues that such acNons involve spending money
without the consent or knowledge of the business’s owners.
The core of his argument suggests that CSR places unnecessary pressure on businesses, which
requires them to allocate resources and make decisions that may not align with their core
purpose of maximizing profits. Instead, it advocates for businesses to operate within the
framework of free-market compeNNon and adhere to the rules of the game, without being
burdened by addiNonal social obligaNons.
In conclusion, Friedman’s perspecNve supports businesses to work and operate in their own
framework. It suggests that a business should be able to pursue its goals and conduct its affairs
Chiara Schnitzer
ETHC 3P82
7641632
without having to bear the burden of fulfilling societal obligaNons. Friedman makes the argument
that companies may best advance socieNes welfare by achieving their main economic objecNves
and creaNng wealth, which then can result in social advancement and an overall well-being.
Part 2 - The Case For CSR
In the following secNon we will explore the argument supporNng CSR, emphasizing the noNon
that it seeks a reasonable level of commitment from businesses while yielding substanNal
outcomes. To support this statement we will explore the insights presented in the second chapter
of the textbook, which is Ntled “Corporate CiNzenship: Social Responsibility, Responsiveness, and
Performance” wri^en by Carroll & Buchholtz. This chapter concentrates on the concept of CSR
and its diverse facets.
CSR has plenty of potenNal benefits, but the four major ones outlined in this chapter are an
improved reputaNon, an enhanced compeNNveness, a fostered innovaNon, and a posiNve
financial performance.
Businesses o`en have vast resources and experNse which uniquely posiNons them to address
social problems. This approach is very proacNve which allows businesses to anNcipate and
miNgate social problems before they escalate. Therefore a proacNve CSR is considered to not only
be more pracNcal but also more cost-effecNve when compared to reacNve measures.
Moreover CSR has a very strong and robust public support, with a majority of supporters believing
that businesses should be responsible to their workers and communiNes, even if it requires
sacrificing some profits. This alignment between the public support for CSR and the Business
Chiara Schnitzer
ETHC 3P82
7641632
Responsibility helps to pursue CSR in a long-term self-interest of those businesses which then can
ensure their viability and reputaNon.
Another aspect that needs to be menNoned is that CSR can support businesses in avoiding
government regulaNons and maintaining a posiNve relaNonship with the society. Besides that, it
also aligns with the concern for sustainability which is currently growing immensely in our society
as well as the need for businesses to address and deal with social and environmental issues.
By engaging in CSR, business can be led to an improvement in stakeholder relaNonships and
enhance social performance, which further strengthens its importance in the business landscape.
Overall, CSR offers a balanced approach that acknowledges the importance of economic
objecNves while addressing the broader responsibiliNes businesses have towards society.
Part 3 - The Case Against CSR From The “Le;”
In the third arNcle given for this assignment, Thomas Ferrea argues that while CSR is o`en seen
as something posiNve, it may not always be the most effecNve way to promote the common good.
First of all, corporaNons lack democraNc legiNmacy to actually be able to define the common good
and might prioriNze their own interests over joint prioriNes. Another point made in this arNcle is
that governments are way be^er equipped to understand and realize common goals effecNvely
for example through policies and coordinaNon. Businesses on the other hand lack the needed
informaNon and financial means to do so. Moreover, governments possess systems that
guarantee the long-term implementaNon of policies, whereas business iniNaNves are more
arbitrary and vulnerable to market fluctuaNons. Nevertheless, governments are not perfect
Chiara Schnitzer
ETHC 3P82
7641632
especially on the internaNonal level. Businesses can therefore support the common good by
following internaNonal guidelines and rules to coordinate with other local actors.
Overall Ferrea states that CSR will always only be the second-best opNon and will always fail to
do the most good. The best approach according to him would be to help governments implement
be^er laws and policies. By reinforcing governments and engaging in ethical lobbying,
corporaNons can contribute to building legiNmate, uncorrupted, and efficient governments,
ulNmately doing more good than a^empNng to take over in limited cases.
To depart from the right-winged view it is to say that the role of businesses in our society is not
natural or necessary or inevitable, but only made up and chosen by ourselves. A business should
also not interfere with other social actors like governments or internaNonal insNtuNons and
especially should not work against the government’s legiNmacy. If a firm wants to take on further
responsibiliNes, it should empower other social actors instead of doing things alone. This means
supporNng and reinforcing other centers of power in society, even if it means going against the
firm's own interests.
Part 4 - Comparison and Personal Opinion
In conclusion it is to say that the first part emphasises that businesses should focus on their main
goal to make profits and the need for personal acNons to bring change. It highlights how
important it is for individuals to make their own conscious choices and to take steps towards a
be^er future.
Chiara Schnitzer
ETHC 3P82
7641632
The second part suggests that businesses should take the lead in adopNng sustainable pracNces
and implemenNng environmentally friendly policies. This can then influence consumer behaviour
and contribute to a more sustainable society.
In the third part it is about the best approach being to help the government implement be^er
laws and policies which recognizes the significance of systemic change and the need for
collaboraNon between various stakeholders. By enhancing rules and regulaNons, we can deal with
the underlying causes of problems and create long-lasNng change.
Personally I agree most with part three. Although all parts offer valuable perspecNves, the idea
of helping governments implement be^er laws and policies resonates with me the most because
it acknowledges the importance of systemic change. It shows that we can foster an environment
that encourages posiNve outcomes and gives governments the ability to act effecNve by
strengthening the legal and policy frameworks. It just makes the most sense to me that working
alone in individually acNons or business iniNaNves by itself are just not sufficient to address such
a complex challenge. I think it is extremely important in our society to work together to achieve
something, which in this context means to collaborate with governments which then can lead us
to more comprehensive and impaceul soluNons.
Word count: 1270 words