IDEAS home Printed from https://ideas.repec.org/a/spr/amsrev/v12y2022i1d10.1007_s13162-022-00224-4.html
   My bibliography  Save this article

A critique of corporate social responsibility in light of classical economics

Author

Listed:
  • Saurabh Ahluwalia

    (University of New Mexico)

Abstract

Classical economics maintains that managers of corporations are agents of the shareholders. The managers should make decisions in accordance with the wishes of the shareholders. For a corporation, it is typically assumed that shareholders want to maximize their wealth, and hence profit maximization is considered the goal of a corporation. On the other hand, the proponents of corporate social responsibility (CSR) maintain that corporations have a responsibility to all stakeholders beyond the shareholders. Corporations should make decisions while taking into account the effects of those decisions on different stakeholders. This commentary explores the concepts of market orientation and stakeholder orientation. Based on the writings of classical economists such as Adam Smith, Theodore Levitt, and Milton Friedman, I analyze how blind adherence to CSR runs counter to the foundations of classical economics. The effect of CSR on the liberal economics system and structure of corporations in terms of property rights, individual freedom, separation of government and business, and accountability is explored to support Gaski’s (AMS Review, 2022) position on these issues.

Suggested Citation

  • Saurabh Ahluwalia, 2022. "A critique of corporate social responsibility in light of classical economics," AMS Review, Springer;Academy of Marketing Science, vol. 12(1), pages 25-29, June.
    • Handle: RePEc:spr:amsrev:v:12:y:2022:i:1:d:10.1007_s13162-022-00224-4
    DOI: 10.1007/s13162-022-00224-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13162-022-00224-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13162-022-00224-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carroll, Archie B., 1991. "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders," Business Horizons, Elsevier, vol. 34(4), pages 39-48.
    2. Youn Kue Na & Sungmin Kang & Hye Yeon Jeong, 2019. "The Effect of Market Orientation on Performance of Sharing Economy Business: Focusing on Marketing Innovation and Sustainable Competitive Advantage," Sustainability, MDPI, vol. 11(3), pages 1-19, January.
    3. Park, Eunil & Kim, Ki Joon & Kwon, Sang Jib, 2017. "Corporate social responsibility as a determinant of consumer loyalty: An examination of ethical standard, satisfaction, and trust," Journal of Business Research, Elsevier, vol. 76(C), pages 8-13.
    4. John F. Gaski, 2022. "Toward social responsibility, not the social responsibility semblance: marketing does not need a conscience," AMS Review, Springer;Academy of Marketing Science, vol. 12(1), pages 7-24, June.
    5. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, January.
    6. Campbell, Katherine & Helleloid, Duane, 2016. "Starbucks: Social responsibility and tax avoidance," Journal of Accounting Education, Elsevier, vol. 37(C), pages 38-60.
    7. Freeman, R. Edward & Liedtka, Jeanne, 1991. "Corporate social responsibility: A critical approach," Business Horizons, Elsevier, vol. 34(4), pages 92-98.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J. Joseph Cronin, 2022. "Marketing’s new myopia: Expanding the social responsibilities of marketing managers," AMS Review, Springer;Academy of Marketing Science, vol. 12(1), pages 30-37, June.
    2. John F. Gaski, 2023. "Replies to comments on “Toward social responsibility,” also incorporating a focus on ESG," AMS Review, Springer;Academy of Marketing Science, vol. 13(1), pages 5-11, June.
    3. O. C. Ferrell, 2022. "Perspectives on socially responsible marketing: the chasm widens," AMS Review, Springer;Academy of Marketing Science, vol. 12(1), pages 1-6, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Henri Kuokkanen & William Sun, 2020. "Companies, Meet Ethical Consumers: Strategic CSR Management to Impact Consumer Choice," Journal of Business Ethics, Springer, vol. 166(2), pages 403-423, October.
    2. Tao Zhang & Lishi Gu & Jenny Jing Wang, 2023. "State‐owned capital and corporate social responsibility of private‐holding companies: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1101-1120, April.
    3. Md. Rabiul Islam & Syed Zabid Hossain, 2019. "Conceptual mapping of shared value creation by the private commercial banks in Bangladesh," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 4(1), pages 1-20, December.
    4. Meyer, Margit & Waßmann, Jan, 2011. "Strategische Corporate Social Responsibility. Konzeptionelle Entwicklung und Implementierung in der Praxis am Beispiel 'dm-drogerie markt'," Research Papers on Marketing Strategy 3/2011, Julius-Maximilians-Universität Würzburg, Lehrstuhl für BWL und Marketing.
    5. Lei Wang & Heikki Juslin, 2011. "The effects of value on the perception of corporate social responsibility implementation: A study of Chinese youth," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 18(4), pages 246-262, July.
    6. Ovidiu-Ioan Moisescu, 2015. "Adopting and Implementing CSR Policies in Travel Agency Business: The Case of Romania," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 27(2), pages 203-220.
    7. Cameron Sabadoz, 2011. "Between Profit-Seeking and Prosociality: Corporate Social Responsibility as Derridean Supplement," Journal of Business Ethics, Springer, vol. 104(1), pages 77-91, November.
    8. Deepa Sharma & Suman Chakraborty & Ashwath Ananda Rao & Lumen Shawn Lobo, 2023. "The Relationship of Corporate Social Responsibility and Firm Performance: A Bibliometric Overview," SAGE Open, , vol. 13(1), pages 21582440231, March.
    9. Manuel Branco & Lúcia Rodrigues, 2006. "Corporate Social Responsibility and Resource-Based Perspectives," Journal of Business Ethics, Springer, vol. 69(2), pages 111-132, December.
    10. Elasrag, Hussein, 2011. "تفعيل دور المسؤولية الاجتماعية للشركات فى التنمية الاقتصادية والاجتماعية فى الدول العربية [activation of the corporate social responsibility role in the economic and social development of Arab coun," MPRA Paper 34422, University Library of Munich, Germany.
    11. Zaheer Alam & Yasir Bin Tariq, 2023. "Corporate Sustainability Performance Evaluation and Firm Financial Performance: Evidence from Pakistan," SAGE Open, , vol. 13(3), pages 21582440231, July.
    12. Camilla Salvatore & Silvia Biffignandi & Annamaria Bianchi, 2022. "Corporate Social Responsibility Activities Through Twitter: From Topic Model Analysis to Indexes Measuring Communication Characteristics," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1217-1248, December.
    13. Lis, Bettina, 2012. "The Relevance of Corporate Social Responsibility for a Sustainable Human Resource Management: An Analysis of Organizational Attractiveness as a Determinant in Employees’ Selection of a (Potential) Emp," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 23(3), pages 279-295.
    14. Dorian Aliu & Ayten Akatay & Armando Aliu & Umut Eroglu, 2017. "Public Policy Influences on Academia in the European Union," SAGE Open, , vol. 7(1), pages 21582440176, February.
    15. Meng‐Feng Yen & Yung‐Ming Shiu & Chi‐Feng Wang, 2019. "Socially responsible investment returns and news: Evidence from Asia," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1565-1578, November.
    16. Khaled Mohammed Alqahtani & Pingping Song, 2016. "Corporate Social Responsibility of Chinese SMEs: Implementation and Challenges (Spoleczna odpowiedzialnosc chinskich MSP: wdrozenie, realizacja i wyzwania)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(20), pages 65-79.
    17. Seo, Kwanglim & Moon, Joonho & Lee, Seoki, 2015. "Synergy of corporate social responsibility and service quality for airlines: The moderating role of carrier type," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 126-134.
    18. Francesco Gangi & Jérôme Méric & Rémi Jardat & Lucia Michela Daniele, 2019. "Business for society," Post-Print hal-02382307, HAL.
    19. Gangi, Francesco & Meles, Antonio & Monferrà, Stefano & Mustilli, Mario, 2020. "Does corporate social responsibility help the survivorship of SMEs and large firms?," Global Finance Journal, Elsevier, vol. 43(C).
    20. Nguyen Minh Ha & Le Quoc Phong & Tran Kiem Viet Thang & Huynh Luong Tam & Tran Hai Dang & Nguyen Thi Mai Hoa, 2023. "Mediating role of corporate reputation in the relationship between corporate social responsibility and repurchase intention: A case study of McDonald’s fast food restaurant chain," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 13(2), pages 19-38.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:amsrev:v:12:y:2022:i:1:d:10.1007_s13162-022-00224-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.