To what extent is Corporate Social Responsibility (CSR) beneficial to a company’s performance?
CSR—A double-edged sword for company’s performance
Starting from the refined corporate social responsibility (CSR) strategies issued by the European Commission in 2011, a stinging debate is being aroused on the influence of CSR to the whole society. The most influential critic is Noble Prize winner Milton Friedman, who regards CSR as a waste of stockholders’ money (1970). However, many other articles claim, opposite Friedman, that CSR actually improves companies’ financial performance in the long run (Bagnoli and Watts, 2003; McWilliams and Siegel, 2001). There are plenty of arguments on CSR’s influence on company’s performance. As far as I am concerned, CSR plays as a double-edged sword in company performance.
The definition of CSR is quite easy to understand. According to Business for Social Responsibility (BSR), CSR is defined as “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment.” McWilliams and Siegel (2001:117) describe CSR as “actions that appear to further some social good, beyond the interest of the firm and that which is required by law.” These suggest that a socially responsible corporation should take a step forward and adopt strategies and business practices that go beyond the profit requirements and contribute to some social-friendly activities. However, when companies choose to engage in CSR activities, what they are taking into account is not simply moral responsibility. There are still other drivers including benefits CSR brings as well as the development sustainability enterprise, etc. That’s the reason why we should analyze the benefits and harms of CSR to corporate financial performance.
For the benefits of CSR, it is claimed that corporations must be engaged in CSR