we have just discussed the issue of corporate social responsibility,this issue has increasingly become a main concern especially after the financial crisis in 2007-2008 and its aftermath. Some of the big corporations were involved in unethical transactions and they were pursuing profits and money without paying any attention to the society.However,as a result , most of the companies have renewed and changed their code of ethics to be more socially responsible and top show that they care about the community and they do good.
I found an interesting article which was written and published on Forbes website by Dr. David Vogel (David Vogel is a professor at the Haas School of Business at the University of California, Berkeley and the author of The Market for Virtue: The Potential and Limits of Corporate Social Responsibility (Brookings, 2005).
In his article he argued that behaving responsibly can be debated as its not going to be rewarded and would likely not result in real benefits as a returns on those who do so. Although, he supported this idea and called on keep doing so.
He included these companies which have been involved in such activities and tried to show that there was no real benefits from their activities.,
Starbucks
Yet since the beginning of 2008, its shares have recently declined nearly 50% (at last glance the S&P 500 is down "only" 36%). The stock's disappointing performance has absolutely nothing to do with CSR: It is entirely due to the firm's overexpansion and, most recently, the increasing unwillingness of consumers to pay as much for a cup of coffee as for a gallon of gasoline.
Other CSR icons, such as Levi Strauss, Gap
General Electric
Before the recent market chaos, GE's share price had been stagnant for nearly six years. Whatever GE's current or projected earnings from Ecomagination, as well as from the firm's substantial investments in alternative energy, they have been overshadowed by Wall Street's disappointment with GE's overall earnings. In fact, GE performed much better under Jack Welch, who was not known for his interest in environmental responsibility. Moreover, GE also continues to make substantial, and highly profitable, investments in the financing and construction of coal-fired power plants, indicating that there is still money to be made by less environmentally responsible behavior.
The firm with possibly the world's poorest environmental reputation is Exxon Mobil
The contrast between Exxon-Mobil and BP reveals another limitation of the business case for corporate responsibility. It is often difficult to distinguish responsible and irresponsible firms. While BP may have a more responsible record than Exxon-Mobil when it comes to the issue of global climate change, Exxon-Mobil has recently been far more successful in preventing accidents and avoiding oil spills. It is thus not obvious which firm is more 'responsible.'
To take another well-known example: Merck
These examples are not unusual: Few firms are consistently responsible--or irresponsible--across all their business operations.
One can find examples of successful firms for whom CSR has been a core element of their business strategy. Patagonia and Seventh Generation come readily to mind. Other firms such asDupont
But it is important not to generalize from these examples. To assume that the business environment has fundamentally changed and that we are entering a new world in which CSR has become critical to the success of all or even most firms is misinformed. The market has many virtues, but reconciling corporate goals and public purposes is unfortunately not among them. Managers should try to act more responsibly. But they should not expect the market to necessarily reward them--or punish their less responsible competitors.
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