Marketing Papers
Document Type
Technical Report
Date of this Version
10-2013
Publication Source
Journal of Business Research
Volume
66
Issue
10
Start Page
1922
Last Page
1927
DOI
10.1016/j.jbusres.2013.02.014
Abstract
This article reviews experimental evidence on the effects of policies intended to promote behavior by firms that is more socially responsible and less socially irresponsible. Corporate social responsibility (CSR) can provide firms with opportunities for profit, but changes are likely to increase total welfare only if firms adopt them freely and without taxpayer subsidies. Mandated CSR circumvents people's own plans and preferences, distorts the allocation of resources, and increases the likelihood of irresponsible decisions. Evidence that government policies will increase welfare and a compelling argument that proven benefits outweigh reductions in freedom are necessary in order to justify CSR mandates. To date, this has apparently not been achieved. Corporate social irresponsibility (CSI) is concerned with whether firms undertake harmful actions that managers would be unwilling to undertake acting for themselves, or that a reasonable person would expect to cause substantive net harm when all parties are considered. Markets in which stakeholders are free to make decisions in their own interests provide some protection against CSI. Tort and contract law provide additional protection. Nevertheless, managers sometimes act irresponsibly. Codes of ethics that require fair treatment of stakeholders while pursuing long-term profit can reduce the risk of irresponsible decisions. Management support and stakeholder accounting are important for successful implementation. Firms may wish to consider these measures; many already have.
Copyright/Permission Statement
Originally published in the Journal of Business Research © 2013 Elsevier
This is a pre-publication version. The final version is available at http://dx.doi.org/10.1016/j.jbusres.2013.02.014
Keywords
accountability, affirmative action, decision making, ethics, externalities, free markets, minimum wage, paternalism, principle-agent problem, regulation, seer-sucker theory, stakeholder accounting, stakeholder theory, sustainability
Recommended Citation
Armstrong, J. S., & Green, K. C. (2013). Effects of Corporate Social Responsibility and Irresponsibility Policies: Conclusions from Evidence-Based Research. Journal of Business Research, 66 (10), 1922-1927. http://dx.doi.org/10.1016/j.jbusres.2013.02.014
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Date Posted: 15 June 2018
This document has been peer reviewed.