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The Myth Of CSR
(World) From those very clever people at Stanford comes this paper: The Myth of CSR The problem with assuming that companies can do well while also doing good is that markets don't really work that way, by Deborah Doane. (.pdf)
The unprecedented growth of CSR may lead some to feel a sense of optimism about the power of market mechanisms to deliver social and environmental change. But markets often fail, especially when it comes to delivering public goods; there-fore, we have to be concerned that CSR activities are subject to the same limitations of markets that prompted the movement in the first place.
The paper gives a great crtitcal overview of the whole CSR landscape from birth to adoption, with a focus on the power and limitations the marketplace has on CSR activities/strategies.
The paper identifies four myths relating to CSR:
—Myth 1: The market can deliver both short-term financial returns and long-term social benefits: this will not always be the case, as people are rational actors who are motivated to maximise their self-interest
—Myth 2: The ethical consumer will drive change: yet, most surveys show that consumers are more concerned about things like price, taste, or sell-by date than ethics
—Myth 3: There will be a competitive "race to the top" over ethics amongst businesses: yet, while companies are vying to be seen as socially responsible to the outside world, they also become more effective at hiding socially irresponsible behaviour, such as lobbying activities or tax avoidance measures
—Myth 4: In the global economy, countries will compete to have the best ethical practices: yet, companies often fail to uphold voluntary standards of behaviour in developing countries, arguing instead that they operate within the law of the countries in which they are working; at the same time, however, competitive pressure for foreign investment among developing countries has actually led to governments limiting their insistence on stringent compliance with human rights or environmental standards, in order to attract investment.
Definitely food for thought…
Stanford Social Innovation ReviewFiled by DK on November 23 2005
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