Disadvantages And Limitations Of The Business Of Business Is Business

713 Words3 Pages
Notwithstanding, CSR has created heated controversy among corporations, government and academicians because of both its benefits and costs. On one hand, many opponents criticized that CSR reporting has many limitations. Firstly, most corporations and managers are believed to not have the obligation to act morally as long as the operation is consistent with the set rules as “the business of business is business” (Friedman, 1962). For example, most Tobacco company still report high profit because financial accounting practices typical did not concern about social and environmental externalities related to the organization (Broomhill, 2007). Secondly, the fact that the lack of integration among parts (Argandona and Hoivik, 2009) and diverse available definitions over CSR in terms of content and application in different researches, company reports or political documents over time indicate the inherent weakness of CSR and the impossibility of creating one-size…show more content…
Thirdly, the huge substantial costs from disclosing environmental and socially related performance could potentially be a burden for managers and there is controversy about the uncertain benefits derived from those costs (TheEconomistIntelligenceUnit, 2005). According to a survey by The Economist Intelligence Unit, the executives and investors agreed that two biggest problems of corporate responsibility were implicated cost (42%) and unproven benefits (40%) (TheEconomistIntelligenceUnit, 2005). Fourthly, the adoption of CSR might also threaten the market economy in terms of competiveness and economic freedom as pressure groups would know the hardships of companies, put pressure on them and take advantage of the situation (Amaeshi et al., 2008). For instance, some corporations
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