What to Make of Unprofitable Corporate Social Responsibility

International Journal of Corporate Strategy and Social Responsibility, vol 1., no. 1, pp. 65 - 85, 2016

13 Pages Posted: 20 Jul 2020

See all articles by Reagan Seidler

Reagan Seidler

Law Society of Upper Canada - Smart & Biggar

Date Written: 2016

Abstract

Many companies lose money by acting responsibly. So why do they do it?

Because in a favourable business climate, companies act generously.

Decades of empirical tests have yet to confirm that corporate social responsibility is and has been a financially responsible business strategy. This paper addresses why firms may choose to adopt a CSR strategy notwithstanding its bottom line effect. It is argued that a purely rational, enlightened self-interest understanding of the CSR movement is incomplete, and rather, that the insights of prospect theory allow for a fuller account of socially responsible behaviour. Analysing the business and political climate in which CSR has emerged, the paper concludes that a boundedly-rational approach to risk is inclining businesses to adopt CSR. The paper challenges business leaders and scholars to re-examine their assumptions of how risk is incorporated into CSR strategies, as well as suggesting a new path out of the social-financial performance controversy.

Keywords: corporate social responsibility, CSR, corporate social performance, CSP, prospect theory, history, risk, business strategy, bounded rationality, political economy

JEL Classification: N92, N62, N42, N32, N12, N22, N00, M14

Suggested Citation

Seidler, Reagan, What to Make of Unprofitable Corporate Social Responsibility (2016). International Journal of Corporate Strategy and Social Responsibility, vol 1., no. 1, pp. 65 - 85, 2016, Available at SSRN: https://ssrn.com/abstract=3599197

Reagan Seidler (Contact Author)

Law Society of Upper Canada - Smart & Biggar ( email )

Ottawa, Ontario
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
27
Abstract Views
287
PlumX Metrics