Flaws of CSR investment

CSR is growing and trending in today’s business world. For several decades it has evolved from something relatively unknown to a popular managerial marketing practice in organizations. While CSR in workplace hade good feedbacks from its practitioners, there were many flaws encountered from establishing CSR policies into their strategies. First of all, CSR is widely accepted as a firm performance boost or in simplest terms, it has the power of increasing a firm’s profits by improving their reputation. One major flaw of CSR involvement is the cost for small firms. Companies that doing well financially are able to invest in CSR regularly and in higher quality, so it is much harder for smaller companies to compete with them.

Another one of the noticeable flaws of CSR is the fact that there are other areas that could be invested in. What I  and the author Isaksson agree on is that it is not guaranteed that performing CSR activities would definitely maximize profits. For example, there is a chance that investing money in commercials, new products, and others can be better than CSR engagement for the firm performance. In conclusion, investing in CSR doesn’t automatically mean more profits; a skilled and knowledgeable team is needed to utilize CSR at an optimal level.

Reference: Isaksson, Kiessling, & Harvey. (2014). Corporate social responsibility: Why bother? Organizational Dynamics, 43(1), 64-72.

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