The engagement of firms with corporate social responsibility is better regulated by the free market than government involvement.
Nickerson, D., Lowe, M., Pattabhiramaiah, A., & Sorescu, A. (2021). The impact of corporate social responsibility on brand sales: An accountability perspective. Journal of Marketing, 86(2), 5-28.
The current research analyzed how various types of corporate social responsibility (CSR) that firms engage in affect customers’ purchase intention. The authors found that those firm actions that correct and compensate for the negative environmental and social impact of the company’s activities positively impact sales. Contrarily, philanthropic activities or those directed toward constructing a firm’s goodwill are negatively associated with customers’ purchasing intention. Moreover, the scholars discovered that the relationship between the type of CSR activity and sales volume is mediated by a company’s reputation.
Applying the C.R.A.A.P.O. test, it was determined that the current article is highly reliable as it scored 50 points. The article has been peer-reviewed and references numerous support materials, thus, providing strong evidence for the posited argument. Additionally, the academic background of the article’s authors, the journal’s high impact factor (9.462), and the usage of clear and logical language further prove the high reliability of the source.
The findings of the reviewed article support the argument that the market better regulates the firm’s extent of engagement with CSR activities than the government. Indeed, if more socially responsible behavior results in increased sales, it would imply that many organizations that ignore or are ineffective in CSR would have to cease their activity in the short term. Thus, it can be argued that engagement with CSR provides a greater competitive advantage and, for this reason, is better managed without governmental interference.
Jia, Y., Gao, X., & Billings, B. A. (2022). Corporate Social Responsibility and Technological Innovation. Journal of Management Accounting Research, 34(1), 163-186.
Similar to the previous study, the current research finds a positive relationship between CSR and a firm’s performance, but this time in terms of company innovativeness. The scholars argue that engagement in socially responsible behavior helps organizations to mobilize available resources, support employee development and creativity effectively, and positively affect a firm’s long-term orientation. However, these effects are mediated by active board monitoring, company leaders’ personal qualities, human capital, and organizational complexity.
The source is highly reliable as it scored 50 points on the C.R.A.A.P.O. test. The article has been recently published in a peer-reviewed academic journal by professionals and addresses the important issue of CSR’s role in company performance. Moreover, the authors supported their theoretical background, hypothesis, and chosen empirical model with previous studies. Last but not least, the paper presents several regression models and provides tests for result robustness which makes the results trustworthy.
The research results suggest that engagement with CSR activities positively influences the firm’s competitive advantage through innovativeness. Therefore, it becomes evident that socially responsible organizations would eventually outperform their competitors. This, in turn, suggests that the personal interests of a company would force it to improve its CSR practices to ensure better performance. Therefore, governmental interference is not necessary as the market would eventually move towards better CSR practices itself.
Tamvada, M. (2020). Corporate social responsibility and accountability: A new theoretical foundation for regulating CSR. International Journal of Corporate Social Responsibility, 5(1), 1-14.
The current paper asserts the importance of government regulation of CSR activities. Tamvada (2020) argues that unless the social responsibility practices are not mandatory, companies would solely initiate those projects that necessitate minimum investments without considering the actual needs of local communities. In this regard, the author intends to analyze what are the boundaries of CRS so that the determined framework guides governments’ legal efforts around the world.
The article under review is published in a reliable peer-reviewed journal by a professional in the sphere of corporate law and governance. The study establishes its arguments using numerous academic sources and uses clear and logical language. Additionally, it directly opposes the posited argument by claiming that governmental regulation of CSR activities is necessary compared to market self-regulation. For these reasons, the research scored 50 points on the C.R.A.A.P.O. test.
The chosen source opposes the argument that the free market can regulate itself in terms of CSR activities. Instead, the author claims that firms cannot address the needs of local communities and would prefer only those activities that require lesser investments. Although this argument sounds logical, it seems that the scholar misses the fact that many competing companies in the market would also seek to target various niches.
