Corporate Social Responsibility Versus Profit Maximization

Corporate Social Responsibility versus Profit Maximization Introduction Nowadays, many large multinational corporations which occupy increasing shares in the market and high statues in the society are usually powerful in having both positive and negative effects on the public to a great extent. As a consequence, today, the concept of Corporate Social Responsibilities (CSR) draws much more public attention. Social responsibility goes beyond profit making and social obligation. CSR is a business intention focusing on minimizing the harmful effects and maximizing the benefit for the society (Mohr, Webb and Harris, 2001, p. 47). According to the Triple Bottom Line Concept of Elkington (1997), a company should be responsible for its social,†¦show more content†¦The reason is that the only way for managers to be social responsible is to use the company’s resources in doing the right things which should be the activities intended to rise profits as long as it remains within the rules of competition. However, social responsible activities are reg arded as deception or fraud, which may, by contrast, destroy the commercial order of the society. (2) Views supporting that CSR Makes Profit. Mellahi, Frynas and Finlay (2005, p.107) state that a company should not only regard maximizing profit for shareholders as their single goal, but also satisfies all its stakeholders’ aspirations. Michael E., from Harvard Business School, presented his point of view against Friedman’s principle. Porter promotes his â€Å"shared value† concept, which involves â€Å"creating economic value also creates value for society by learning its needs and challenges† (M. E. Porter, M. R. Kramer, 2011). The same as the â€Å"triple bottom line principle† mentioned above, shared value is not a new idea addressing the opinion that â€Å"companies can do well by doing good†. However, the strategy needs the ability to discourse and solve the societal issues which includes natural-resource exhaustion, pollution, needs of the poor and public health. Today, more and more companies follow the business strategies fitting the shared-value model. 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