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The research paper named “Corporate Social Responsibility (CSR) through an Economic Lens” tries to explore the responsibility of any business organization trying to make profits through their daily chores. The paper authored by Reinhardt and co-authored by Stavins and Veitor highlights that in every nation the term CSR has been gaining importance amongst the academicians, business leaders and even within the government sector. The crux of this paper has been to find out the exact definition of CSR that should be used by the government and business organization. Usually it has been observed that the sole motive of any business firm is to make profit while obeying the law of the organization and the nation where the business has been set up. The question that arises is if at all the firm looks after the environmental degradation and uses resources optimally to avoid scarcity in near future. According to Elhauge (2005) the primary CSR is sacrificing turnover for communal interest. The concept got great importance amongst the research scholars and amongst the environmentalists with the help of Milton Friedman’s paper published in 1970.
The paper tries to find out the basics of CSR by concentrating on 4 major questions starting with if at all the firms sacrifice their profits while maintaining their promise to the stakeholders. The other question pertains to that of sustainability issue whereby the author tried to see if the firm can sacrifice their profits to save the environment on a sustainable basis. In fact the author tries to find out if at all the firms do any of these things. The last issue which the paper tries to look into is whether this type of activity leads to efficient use of resources. According to some economists, maximising the profit for shareholder is the dole duty of the firm. It has been seen that in U.S. sacrificing profit has no value and the firm work on the shareholder primacy model which has been guided by Corporate Law. In most of the cases where firms try to involve themselves into CSR activities, they are left with lesser amount of dividends for their shareholders. Amidst the tough competition that exists within the economy such a step would be dreadful and the firm might get out of business. There is dearth of statistical data showing the firms sacrificing their profit for the cause of CSR. The firms strategically set up their traditional business activities in such a way that it looks like they are indulging themselves in social activities. Most of the time the firms tries to built up a sustainable business goals such that in the long-term they can remain in busy and successfully earn their profits. It can be wrapped up by stating that observations suggests that taking up environment friendly corporate strategies has been beneficial for the firms operating in U.S. It is seen that by increasing the volume of corporate investment in the channels of CSR, long term profit can be ensured along with sustainability in business and improved social welfare.
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