Title: What to make of unprofitable corporate social responsibility

Authors: Reagan Reese Seidler

Addresses: Office of the Minister of Justice & Attorney General of Saskatchewan, 355 – 2405 Legislative Drive, Regina, SK, S4S 0B3, Canada

Abstract: Decades of empirical tests have yet to confirm that corporate social responsibility is and has been a financially responsible business strategy. This paper addresses why firms may choose to adopt a CSR strategy notwithstanding its bottom line effect. It is argued that a purely rational, enlightened self-interest understanding of the CSR movement is incomplete, and rather, that the insights of prospect theory allow for a fuller account of socially responsible behaviour. Analysing the business and political climate in which CSR has emerged, the paper concludes that a boundedly-rational approach to risk is inclining businesses to adopt CSR. The paper challenges business leaders and scholars to re-examine their assumptions of how risk is incorporated into CSR strategies, as well as suggesting a new path out of the social-financial performance controversy.

Keywords: corporate social responsibility; CSR; prospect theory; corporate social performance; CSP; corporate financial performance; CFP; history; politics; political economy; unprofitability; business case; risk; movement; profit; business strategy; bottom line effect.

DOI: 10.1504/IJCSSR.2016.077545

International Journal of Corporate Strategy and Social Responsibility, 2016 Vol.1 No.1, pp.65 - 85

Received: 05 Feb 2015
Accepted: 03 Aug 2015
Published online: 05 Jul 2016 *