{"id":2931,"date":"2023-02-19T16:11:09","date_gmt":"2023-02-19T16:11:09","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/corporate-social-responsibility\/"},"modified":"2025-05-20T23:05:50","modified_gmt":"2025-05-20T23:05:50","slug":"corporate-social-responsibility","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/corporate-social-responsibility\/","title":{"raw":"Learn It 6.3.1: Corporate Social Responsibility","rendered":"Learn It 6.3.1: Corporate Social Responsibility"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Define corporate social responsibility (CSR)&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Define corporate social responsibility (CSR)<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the impact of CSR on stakeholders&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the impact of CSR on stakeholders<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Recognize examples of CSR&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Recognize examples of CSR<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand controversies surrounding CSR&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand controversies surrounding CSR<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>What is CSR?<\/h2>\r\n<section class=\"textbox keyTakeaway\">\r\n<h3>corporate social responsibility<\/h3>\r\n<p><strong>Corporate social responsibility<\/strong> (CSR) can be defined as the ethical role of the corporation in society. The aim of CSR is to increase long-term profits and shareholder trust through positive public relations and high ethical standards. The goal is to reduce business and legal risk by taking responsibility for corporate actions.<\/p>\r\n<\/section>\r\n<p>It isn't enough for companies to generate a profit and merely meet the letter of the law in their business operations. Beneficial action required by law, such as cleaning up factories that are polluting air and water, is not voluntary. However, CSR is voluntary. Also, the obligations of corporate social responsibility are broad. They extend beyond investors in the company to include workers, suppliers, consumers, communities, and society at large. Today, many U.S. citizens expect business to generate a profit while conducting themselves in an ethical and socially responsible manner.<\/p>\r\n<p>CSR strategies encourage the company to make a positive impact on the environment and stakeholders\u2014that is, all of the parties with a stake in the performance and output of the corporation. Stakeholders include the company\u2019s employees, unions, investors, suppliers, consumers, local and national governments, and co6mmunities that may be affected by corporate activities such as construction, manufacturing, and pollut<span style=\"color: #333333;\">ion.\u00a0For some companies, CSR means manufacturing their products in a way that doesn't harm the environment and protects the consumer from potentially hazardous materials.\u00a0<\/span><\/p>\r\n<section class=\"textbox example\" aria-label=\"Example\">\r\n<h4>All-One with Dr. Bronner's<\/h4>\r\n<p>Dr. Bronner\u2019s is a strong example of how a company can align profit with ethical purpose. Founded in 1948, this soap and personal care brand goes beyond legal requirements by embedding social and environmental values into its core business. Dr. Bronner\u2019s defines its mission around the motto, \"All-One\" which emphasizes unity, fairness, and sustainability across its operations.[footnote]Dr. Bronner's. 2024. \u201c75 Years of ALL-ONE!\u201d ALL-ONE REPORT. 2024. https:\/\/www.allone.report\/2024[\/footnote]<\/p>\r\n<p>A major part of Dr. Bronner\u2019s CSR efforts involves sourcing ingredients like coconut and palm oil from farms that are certified fair trade and organic.[footnote]\u2014\u2014\u2014. n.d. \u201cConstructive Capital, Activism, and Giving.\u201d Dr. Bronner\u2019s. Accessed May 20, 2025. https:\/\/www.drbronner.com\/blogs\/our-community\/constructive-capital-activism-and-giving[\/footnote] These certifications mean the farms follow strict standards to protect the environment and treat workers fairly. For example, fair trade ensures that farmers are paid decent wages and work under safe conditions, while organic farming avoids harmful chemicals that can pollute soil and water. By choosing these suppliers, Dr. Bronner\u2019s helps improve lives in farming communities and reduce environmental harm, both important goals of CSR.<\/p>\r\n<p>Dr. Bronner\u2019s extends its CSR through philanthropy and employee care. In 2022, it donated over $8.6 million to causes such as climate action and drug policy reform. Internally, it provides generous benefits, profit-sharing, and a minimum wage nearly double the federal level.[footnote]WholeFoods . 2023. \u201cDr. Bronner\u2019s Releases 2023 All-One! Report: \u2018Take Care of Spaceship Earth!\u2019\u201d Wholefoodsmagazine.com. WholeFoods Magazine. August 16, 2023. https:\/\/www.wholefoodsmagazine.com\/articles\/16350-dr-bronners-releases-2023-all-one-report-take-care-of-spaceship-earth[\/footnote] It has also committed to cap the salary of top executives at no more than five times the salary of the lowest paid worker.[footnote]\u2014\u2014\u2014. n.d. \u201cProgressive Business Practices.\u201d Dr. Bronner\u2019s. Accessed May 20, 2025. https:\/\/www.drbronner.com\/blogs\/our-employees\/progressive-business-practices[\/footnote] These practices show how CSR can guide ethical decision-making, create long-term trust, and benefit a wide range of stakeholders.<\/p>\r\n<\/section>\r\n<h3>Friedman Doctrine<\/h3>\r\n<p>A counterpoint to CSR comes from the <strong>Friedman Doctrine<\/strong>, which argues that a corporation's sole responsibility is to maximize shareholder value within legal and ethical boundaries. Economist Milton Friedman contended that CSR diverts resources from a company\u2019s core mission, reducing efficiency and interfering with market forces. He viewed social and environmental initiatives as responsibilities of governments, not businesses. Instead, he believed companies best serve society by driving economic growth, creating jobs, and delivering value to consumers, ultimately leading to broader prosperity. However, critics of the Friedman Doctrine point out that this approach can lead to income inequality and and harm to the broader economy, as seen in cases like the [pb_glossary id=\"9048\"]2008 global financial crisis[\/pb_glossary].<\/p>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"300\"]4312[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Define corporate social responsibility (CSR)&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Define corporate social responsibility (CSR)<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the impact of CSR on stakeholders&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the impact of CSR on stakeholders<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Recognize examples of CSR&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Recognize examples of CSR<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand controversies surrounding CSR&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand controversies surrounding CSR<\/span><\/li>\n<\/ul>\n<\/section>\n<h2>What is CSR?<\/h2>\n<section class=\"textbox keyTakeaway\">\n<h3>corporate social responsibility<\/h3>\n<p><strong>Corporate social responsibility<\/strong> (CSR) can be defined as the ethical role of the corporation in society. The aim of CSR is to increase long-term profits and shareholder trust through positive public relations and high ethical standards. The goal is to reduce business and legal risk by taking responsibility for corporate actions.<\/p>\n<\/section>\n<p>It isn&#8217;t enough for companies to generate a profit and merely meet the letter of the law in their business operations. Beneficial action required by law, such as cleaning up factories that are polluting air and water, is not voluntary. However, CSR is voluntary. Also, the obligations of corporate social responsibility are broad. They extend beyond investors in the company to include workers, suppliers, consumers, communities, and society at large. Today, many U.S. citizens expect business to generate a profit while conducting themselves in an ethical and socially responsible manner.<\/p>\n<p>CSR strategies encourage the company to make a positive impact on the environment and stakeholders\u2014that is, all of the parties with a stake in the performance and output of the corporation. Stakeholders include the company\u2019s employees, unions, investors, suppliers, consumers, local and national governments, and co6mmunities that may be affected by corporate activities such as construction, manufacturing, and pollut<span style=\"color: #333333;\">ion.\u00a0For some companies, CSR means manufacturing their products in a way that doesn&#8217;t harm the environment and protects the consumer from potentially hazardous materials.\u00a0<\/span><\/p>\n<section class=\"textbox example\" aria-label=\"Example\">\n<h4>All-One with Dr. Bronner&#8217;s<\/h4>\n<p>Dr. Bronner\u2019s is a strong example of how a company can align profit with ethical purpose. Founded in 1948, this soap and personal care brand goes beyond legal requirements by embedding social and environmental values into its core business. Dr. Bronner\u2019s defines its mission around the motto, &#8220;All-One&#8221; which emphasizes unity, fairness, and sustainability across its operations.<a class=\"footnote\" title=\"Dr. Bronner's. 2024. \u201c75 Years of ALL-ONE!\u201d ALL-ONE REPORT. 2024. https:\/\/www.allone.report\/2024\" id=\"return-footnote-2931-1\" href=\"#footnote-2931-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p>A major part of Dr. Bronner\u2019s CSR efforts involves sourcing ingredients like coconut and palm oil from farms that are certified fair trade and organic.<a class=\"footnote\" title=\"\u2014\u2014\u2014. n.d. \u201cConstructive Capital, Activism, and Giving.\u201d Dr. Bronner\u2019s. Accessed May 20, 2025. https:\/\/www.drbronner.com\/blogs\/our-community\/constructive-capital-activism-and-giving\" id=\"return-footnote-2931-2\" href=\"#footnote-2931-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a> These certifications mean the farms follow strict standards to protect the environment and treat workers fairly. For example, fair trade ensures that farmers are paid decent wages and work under safe conditions, while organic farming avoids harmful chemicals that can pollute soil and water. By choosing these suppliers, Dr. Bronner\u2019s helps improve lives in farming communities and reduce environmental harm, both important goals of CSR.<\/p>\n<p>Dr. Bronner\u2019s extends its CSR through philanthropy and employee care. In 2022, it donated over $8.6 million to causes such as climate action and drug policy reform. Internally, it provides generous benefits, profit-sharing, and a minimum wage nearly double the federal level.<a class=\"footnote\" title=\"WholeFoods . 2023. \u201cDr. Bronner\u2019s Releases 2023 All-One! Report: \u2018Take Care of Spaceship Earth!\u2019\u201d Wholefoodsmagazine.com. WholeFoods Magazine. August 16, 2023. https:\/\/www.wholefoodsmagazine.com\/articles\/16350-dr-bronners-releases-2023-all-one-report-take-care-of-spaceship-earth\" id=\"return-footnote-2931-3\" href=\"#footnote-2931-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a> It has also committed to cap the salary of top executives at no more than five times the salary of the lowest paid worker.<a class=\"footnote\" title=\"\u2014\u2014\u2014. n.d. \u201cProgressive Business Practices.\u201d Dr. Bronner\u2019s. Accessed May 20, 2025. https:\/\/www.drbronner.com\/blogs\/our-employees\/progressive-business-practices\" id=\"return-footnote-2931-4\" href=\"#footnote-2931-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a> These practices show how CSR can guide ethical decision-making, create long-term trust, and benefit a wide range of stakeholders.<\/p>\n<\/section>\n<h3>Friedman Doctrine<\/h3>\n<p>A counterpoint to CSR comes from the <strong>Friedman Doctrine<\/strong>, which argues that a corporation&#8217;s sole responsibility is to maximize shareholder value within legal and ethical boundaries. Economist Milton Friedman contended that CSR diverts resources from a company\u2019s core mission, reducing efficiency and interfering with market forces. He viewed social and environmental initiatives as responsibilities of governments, not businesses. Instead, he believed companies best serve society by driving economic growth, creating jobs, and delivering value to consumers, ultimately leading to broader prosperity. However, critics of the Friedman Doctrine point out that this approach can lead to income inequality and and harm to the broader economy, as seen in cases like the <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_2931_9048\">2008 global financial crisis<\/a>.<\/p>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm4312\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=4312&theme=lumen&iframe_resize_id=ohm4312&source=tnh&show_question_numbers\" width=\"100%\" height=\"300\"><\/iframe><\/section>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-2931-1\">Dr. Bronner's. 2024. \u201c75 Years of ALL-ONE!\u201d ALL-ONE REPORT. 2024. https:\/\/www.allone.report\/2024 <a href=\"#return-footnote-2931-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-2931-2\">\u2014\u2014\u2014. n.d. \u201cConstructive Capital, Activism, and Giving.\u201d Dr. Bronner\u2019s. Accessed May 20, 2025. https:\/\/www.drbronner.com\/blogs\/our-community\/constructive-capital-activism-and-giving <a href=\"#return-footnote-2931-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-2931-3\">WholeFoods . 2023. \u201cDr. Bronner\u2019s Releases 2023 All-One! Report: \u2018Take Care of Spaceship Earth!\u2019\u201d Wholefoodsmagazine.com. WholeFoods Magazine. August 16, 2023. https:\/\/www.wholefoodsmagazine.com\/articles\/16350-dr-bronners-releases-2023-all-one-report-take-care-of-spaceship-earth <a href=\"#return-footnote-2931-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-2931-4\">\u2014\u2014\u2014. n.d. \u201cProgressive Business Practices.\u201d Dr. Bronner\u2019s. Accessed May 20, 2025. https:\/\/www.drbronner.com\/blogs\/our-employees\/progressive-business-practices <a href=\"#return-footnote-2931-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><\/ol><\/div><div class=\"glossary\"><span class=\"screen-reader-text\" id=\"definition\">definition<\/span><template id=\"term_2931_9048\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_2931_9048\"><div tabindex=\"-1\"><p>The 2008 financial crisis was a global economic collapse triggered by excessive risk-taking in the financial sector, particularly through subprime mortgage lending, complex derivatives, and inadequate regulation, leading to the failure of major banks, a housing market crash, and a severe recession.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><\/div>","protected":false},"author":21,"menu_order":15,"template":"","meta":{"_candela_citation":"[{\"type\":\"pd\",\"description\":\"Corporate Social Responsibility in America\",\"author\":\"\",\"organization\":\"U.S. Embassy\",\"url\":\"http:\/\/iipdigital.usembassy.gov\/st\/english\/audio\/2011\/04\/20110412150705enilorac1.085407e-02.html#ixzz4Q0ZtVSdJ\",\"project\":\"\",\"license\":\"pd\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Corporate Social Responsibility\",\"author\":\"\",\"organization\":\"Wikipedia\",\"url\":\"https:\/\/en.wikipedia.org\/wiki\/Corporate_social_responsibility\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Revision and adaptation\",\"author\":\"Linda Williams and Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Corporate Social Responsibility in the United States And Europe: How Important Is It? 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