CSR Practices

CSR's sound good and in an ideal worldcanbe good, however, if a company isn't sincere in their social responsibility practice or they don't show a willingness to really care about, then there can be negative consequences for consumers, but other stakeholders like community members. Ramanna calls out Amazon who has been able to avoid paying taxes in multiple states or other companies who put gains into offshore bank accounts (2020). This hurts the communities those taxes would go towards. Another specific example is you have companies now that are run on ideals and use ideology as marketing instead of actual product. One of these companies that comes to mind is MyPillow, run by the conservative extremist Mike Lindell, who essentially markets themselves as the pillow of conservatives and closely aligns himself with alt-right supporters and far-right provocateurs. This company, because they engage in political policies on the basis of CSR has hurt themselves and any shareholders financially due to the beliefs. The owner had a lawsuit against him for spreading misinformation and the product being dropped from multiple retailers costing the company $100 million, according to the owner. This of course then affects workers when they need to be laid off to keep the company afloat. When companies and company CEOs can go unhindered on the basis of corporate social responsibility, it can hurt the company's bottom line and the workers or communities that depend on companies coming in.

Another example is Amazon and its proposed hub in NYC. Amazon, who is notorious for greenwashing, claiming they're environmentally friendly and community friendly, sets up hubs and gains huge subsidies and tax credits for opening up. However, they do little to change their impact. This company received all these tax credits and money to open up and then pulled out. Though this didn't hurt the company's bottom line, it hurt the city, communities, and people who were potentially looking for jobs once that rug got pulled out from under them.

Risks and Benefits of CSR Practices

One benefit of CSR practices is improved reputation and brand image (Ramanna, 2020). When a company engages in CSR initiatives that align with its values and resonate with its target audience, it can enhance its reputation as a socially responsible and ethical organization. This can lead to increased customer loyalty, positive media coverage, and a competitive advantage in the marketplace. Additionally, it can attract socially conscious investors and talent, contributing to the long-term success of the company.

If CSR is done inappropriately or with no follow through you can have a loss of trust from consumers and communities (Ramanna, 2020). This can then hurt company profits and pose a big risk.

IF CSR is done right the benefits can far outweigh the risks. However, it takes dedication and follow-through.

Adhering to Ethical Standards and Positive Social Change

Adherence to ethical standards and a commitment to positive social change can play a significant role in helping managers overcome negative outcomes in several ways. One of these ways is that you can receive positive public relations. For instance, in the Amazon hub issue in New York, if Amazon had follow through and dedication to their CSR business model, they might have been more welcomed than they were by local politicians and the community. Instead, Amazon used their influence to work to bleed the community as dry as they could and then left, and now there is a permanent negative stigma for Amazon.

Another benefit to adhering to ethical standards and positive social change is enhanced reputation and trust. For most people Mike Lindell is now considered an alt-right conspiracy theorist due to him pushing his beliefs and therefore he and the company have lost much of any reputation they might have had to begin with.

Resources

Ramanna, K. (2020).Friedman at 50: Is it still the social responsibility of business to increase profits?California Management Review, 62(3), 28-41. https://doi.org/10.1177/0008125620914994

QUESTIONS:

• Ask a question about or provide an additional perspective for the examples of CSR practices that your colleague provided.
• Provide an additional perspective to your colleague's analysis of the risks and benefits of instituting CSR practices, including whether the risks or benefits outweigh each other.
• Offer an insight you gained from your colleague's proposal to help managers overcome negative outcomes by adhering to ethical standards and/or a drive toward positive social change.