Reich vs. CSR ~ Brand Mix

Monday, September 10, 2007

Reich vs. CSR

Can big companies be good corporate citizens? Should they even be trying? In his new book, Supercapitalism, Robert Reich, Bill Clinton's Labor Secretary calls CSR "a dangerous diversion that is undermining democracy" and that companies "cannot be socially responsible, at least not to any significant extent".

Reich argues that its governments not companies that must solve social problems, something they have not been doing adequately partly because CSR programs fool the public into believing that these problems are being taken care of.

Reich's argument is based on the assumption that companies are in business to make profits and CSR programs do not support this mission. While this might be true in the short term, it ignores the brand and reputation building effects of CSR programs. A strong CSR program will increase brand equity and therefore the company's value, very much in a company's self interest.

CSR programs can also help improve the quality and performance of the workforce because they increase a company's attractiveness to potential recruits and energize and motivate current employees.

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