Corporate Social Responsibility

Today I was very intrigued about the idea of CSR (Corporate Social Responsibility). The needs of society and the needs of shareholders sometimes contradict each other. Usually, a responsibility towards society is seen by some managers as an economic burden with no financial return. For them, it’s a lose-win situation, them being the losers. On the other hand, a company might be tempted to do things that economically are sound but that deteriorate society or the environment. For example, manufacturing of certain products can cause serious environmental or health issues. In this case, society loses while shareholders win.

Is there a way in which both benefits to shareholders and benefits to the rest of the stakeholders can coexist? That is what CSR is all about; it calls for a win-win outcome. For example, managers can better make use of natural resources like water. If they become more efficient in water use the outcome is good for the company in terms of savings and great for the environment. Hotels do this when they ask you to “recycle” their towels. If you use the same towel during your whole stay then you will saved them and the environment some water. 

Companies also are very involved in humanitarian and social causes, like supporting campaigns against cancer, or giving money to fund orphanages. They will usually do things that can better the image of the company as well as provide additional sources of income. For example, Microsoft will give free computers equipped with Microsoft Office to school with limited resources, or Bayer (where I worked before) will fund a global campaign against Pulmonary Hypertension (blue lips) to increase awareness of the illness while improving their image and commitment to treating rare diseases. This will not only be good for society but in the future it can increase Microsoft and Bayer’s sales.