What to make of unprofitable corporate social responsibility

Reagan Reese Seidler
2016 International Journal of Corporate Strategy and Social Responsibility  
Decades of empirical tests have yet to confirm that corporate social responsibility is and has been a financially responsible business strategy. This paper addresses why firms may choose to adopt a CSR strategy notwithstanding its bottom line effect. It is argued that a purely rational, enlightened self-interest understanding of the CSR movement is incomplete, and rather, that the insights of prospect theory allow for a fuller account of socially responsible behaviour. Analysing the business
more » ... political climate in which CSR has emerged, the paper concludes that a boundedly-rational approach to risk is inclining businesses to adopt CSR. The paper challenges business leaders and scholars to re-examine their assumptions of how risk is incorporated into CSR strategies, as well as suggesting a new path out of the social-financial performance controversy.
doi:10.1504/ijcssr.2016.077545 fatcat:rvj5ufpi2fdiri6bjs5r4mzc2u