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Minimizing corporate social irresponsibility to maximize social welfare

  • This paper turns traditional ideas about the responsibility of corporations upside down by arguing that it is not conducive to aim to maximize corporate social responsibility (CSR). Instead, corporations should embrace their social responsibility by working to minimize corporate social irresponsibility (CSI). It is more straightforward to minimize tangible sources of business and/or reputational risk, such as eironmental damage or child labor in the supply chain, than to maximize a construct for which a generally accepted definition is still pending. What’s more, this enables a corporation to use its core business competencies and expertise to maximize social welfare by protecting those societal resources which are relevant to its own value creation process. Thereby, the demand that corporations accept responsibility for a broad range of stakeholders is met but the importance of profits as the fundamental measure of a corporation’s capability to create value for society is not undermined. Failing to introduce this conception means maintaining the status-quo whereby the net societal benefit of corporations’ CSR activities is questionable and the opportunity costs are high as CSI issues and the detrimental effects thereof on corporations’ core business and societal stakeholders will remain unmanaged.

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Document Type:Article
Author:Christina Kleinau, Christian W. Kretzmann, Henning ZülchORCiD
Chairs and Professorships:Chair of Accounting and Auditing
Chair of Economic and Business Ethics
Year of Completion:2016
In: Global Journal of Business Research, 10 (2016) 1, 71-91