Today, August 23 2010, there is a very provocative op-ed piece in the Wall Street Journal by Prof. Aneel Karnani, an associate professor of strategy at the University of Michigan's Stephen M. Ross School of Business. Click here for the Podcast
In a nutshell, Karnani argues that when corporate profits and public interests are aligned, the idea of corporate social responsibility is irrelevant, because the driving force is not a commitment to social welfare but to maximization of profits. And when profits and social welfare conflict, an appeal to social responsibility will be ineffective, because executives will not act in the public interest and against shareholder interests. In addition, by taking about corporate social responsibility we target the wrong actor and look for solutions where we should not. Government regulation, watchdogs, and self-regulation are the real solutions to social welfare, he suggests.
Let me select a quote and test your reactions:
"Still, the fact is that while companies sometimes can do well by doing good, more often they can't. Because in most cases, doing what's best for society means sacrificing profits (...) So now what? Should executives in these situations heed the call for corporate social responsibility even without the allure of profiting from it? You can argue that they should. But you shouldn't expect that they will."
You can click here to access the whole article, together with comments from the readers. The man in the video is Nobel-Prize winning Milton Friedman, the most serious advocate of the case against corporate social responsibility.