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Article

23 Aug 2010

Author:
Dr. Aneel Karnani, associate professor of strategy, University of Michigan's Stephen M. Ross School of Business, in Wall Street Journal

The Case Against Corporate Social Responsibility

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...[T]he idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed...Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests...But it's worse than that...As society looks to companies to address these problems, the real solutions may be ignored.