Today’s regulation for corporations in the United States only encompasses the passive, internal operations of a company. But with an increase in the number of Corporate Social Responsibility (CSR) programs around the world, it is becoming more common for corporations to have CSR policies. In the United Kingdom, there are legal responsibilities that a corporation must uphold in relation to their employees and the environment, so a form of CSR is regulated in the UK.[1] In the United States these laws are more lax, so the CSR practices that are exhibited are voluntary initiatives launched to address economic or social problems.
Citations
1.Cynthia A. Williams and Ruth V. Aguilera, "Corporate Social Responsibility in a Comparative Perspective" (paper presented at University of Illinois at Urbana-Champaign), accessed December 3, 2014, http://business.illinois.edu/aguilera/pdf/Williams%20Aguilera%20OUPfinal%20dec%202006.pdf.
2.Rhys Jenkins, "Globalization, Corporate Social Responsibility and Poverty," International Affairs 81, no. 3 (2005): accessed December 3, 2014, http://earthmind.net/fdi/misc/ia-globalisation-csr-poverty.pdf.
3.Ibid
Regulation
Ybor Cigar Factory circa 1920
Regardless of the choice of CSR, many proponents of CSR regulation argue that a company with good CSR will actually be more profitable and sustainable.[2] This argument ties into the belief that a corporation's CSR can be used as a tool for advertisement, as customers are more likely to buy a product that is from a corporation with good CSR. Many corporations do not buy into that belief, and argue that CSR would harm their business model and thus fight against CSR regulation. Another interesting argument deals with social regulation instead of legal regulation. The idea is that if regulations were to be imposed on companies, companies would only have to meet those quantified CSR requirements in order to become a corporation that fully embraces the idea of CSR legally.[3] Without heavy regulations, corporations will have to exhibit CSR voluntarily and in such a way to attract business from their stakeholders. The regulation would then be based on public opinion of a company, so a company with good CSR would have people buying from them whereas a corporation with bad CSR would be avoided. This system puts an emphasis on the reputation of a corporation, so a corporation will then drive to the best reputation possible. In a nutshell, CSR is way for corporations to compete not only an economic level, but also on a social responsibility level, overall working towards a better society.