Corporate social responsibility (CSR) is increasingly practiced by most companies worldwide. This is because it gives a sense of fulfillment and satisfaction when firms are able to develop socially with the community apart from its economic aspect. However, there are certain false claims about CSR. Let us identify these allegories and understand why they are not completely true about the CSR concept.
Doane’s Four Key Myths of CSR
Deborah Doane has identified four key myths revolving around the concept of corporate social responsibility.
The first myth says that “the market can deliver both short-term financial returns and long-term social benefits.” It is assumed that the results of business activities and its social objectives are of about the same level. Since people would want a society that is stable and thriving as well as an environment that is healthy and prosperous, people would eventually invest and capitalize in companies both for profitable goals and socially responsible intentions. Ideally, we want the market to balance itself this way but this is not even a possibility. Companies may be providing social obligations but it is not a complete guarantee that these activities help a company increase their bottom line. Especially during economic downfall, a company will less likely engage in social causes and community programs as it can hardly deliver long-term social benefits when the short-term financial returns or profit is not doing well.
The second myth states that “the ethical consumer will drive change.” Although consumers would like to deal with companies or businesses that follow proper business ethics, it is still not a major factor of profit increase and revenue. Customers are, in fact, more concerned about the price, preferences, and sell-by date of products. A certain company cannot guarantee a change in the preferences and purchasing decisions of the buying public despite its efforts to demonstrate social responsibility.
The third myth according to Doane is “there will be a competitive ‘race to the top’ over ethics among businesses.” While it is true that corporate social responsibility is improving business ethics and behavior toward the society, some businesses are still able to capitalize with sincere intentions more than offering good PR.
Lastly, Doane’s fourth allegorical claim on CSR is that “in the global economy, countries will compete to have the best ethical practices.” May companies in developing countries would often claim that they have contributed in the improvement of health, labor, and environmental conditions of the people but these companies are not consistent in upholding voluntary ethical standards in developing countries. Instead, they argue that they operate only based on the laws and regulations imposed by the country they are in.
Other Myths about CSR
Apart from the four key myths mentioned above, there are other existing fallacies about the CSR approach. One myth false claim mentions that economic growth is not compatible with CSR which is not completely true since a growth in the economic aspect of a business is affected by its social development as well. Another myth says that the multinationals are the biggest sinners of CSR. On the other hand, these multinationals have greatly contributed in the creation of jobs and the economic and social stability of a country. It is also said that CSR is the same concept or revolve around the uniform models and theories. True as it may be, it must be known that change is inevitable. Although CSR rests on universally observed principles and processes, there are clear possibilities of changes and modifications especially that this concept is not pretty clear to other companies.
What to Do?
If your organization or business practices corporate social responsibility, you need to understand fully the goal of becoming socially and environmentally responsible and weigh the importance of doing these things from your main and primary goal of maximizing profit. Although socio-economic aspect can hardly become balanced, the important thing is, observing CSR practices is mutually beneficial for your organization and the society you are serving.
These myths arise because of the increasing importance and observance of CSR in many companies of various levels. Up until now CSR still remains to be a topic of argument and debates among many corporations. But an organization must remember that the essence of CSR is to bring a satisfaction to the social, economic, and environmental aspects of a business.