Arguments for CSR: Rational Argument

CSR is a rational argument that focuses on the benefits to performance of avoiding external constraints. Adopting the path of least resistance with regard to issues of concern makes common and business sense. In today’s globalized world, where individuals and organizations are empowered to enact change, CSR represents a means of anticipating and reflecting societal concerns to minimize operational and financial sanctions.

The loss of moral legitimacy can lead to the countervailing power of social activism, restrictive legislation, or other constraints on the firm’s freedom to pursue its economic and other interests. Violations of ethical and discretionary standards are not just inappropriate; they present a rational argument for CSR. Because societal sanctions—such as laws, fines, prohibitions, boycotts, or social activism—impact the firm’s strategic goals, efforts to comply with societal expectations are rational, regardless of moral arguments. Where compliance with moral expectations is based on highly subjective values, the rational argument rests on sanction avoidance.

Ultimately, the Iron Law of Social Responsibility suggests that in a free society discretionary abuse of societal responsibilities leads, eventually, to mandated solutions. That is, in a democratic society, power is taken away from those who abuse it.