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Pro and Con: Corporate Social Responsibility

Submitted by on February 19 – 2013No Comment

PRO: Corporate Social Responsibility & TOMS: Doing Well by Doing Good 

“With every pair you purchase, TOMS will give a pair of new shoes to a child in need. One for One.” TOMS Shoes, created in 2006, matches every pair of shoes purchased “One for One” with a pair of new shoes given to children in need in over 50 countries around the world. More than two million new shoes have been given to children in communities with economic, health and educational needs, and where local businesses will not be negatively affected. Recently, TOMS ventured into eyewear, expanding its One for One movement to match each pair of TOMS glasses purchased with either prescription glasses, sight-saving surgery, or medical treatment for people in more than 13 countries worldwide.

TOMS Shoes are fairly affordable, come in different styles and patterns (including a “Vegan” for you yogis and “Wedding” shoes, if you’re feeling fancy). They are made from recycled material and are available to everyone, infant to adult. Moreover, the shoes come with the added bonus of leaving consumers feeling that they are doing something good by wearing TOMS. The shoes are certainly not a fashion statement, but they are a statement about the concern consumers have for social responsibility and how Corporate Social Responsibility (CSR) serves to accelerate a company’s prospects for growth, good community relationships, satisfied employees, and higher profits.

The reason for TOMS’ success is directly attributable to its CSR framework and the rise of ethical consumerism. As stated on their website, “Corporate Responsibility at TOMS provides focus on the environmental and social impacts of our products and operations, responsible giving and employee life.”

CSR has long divided the business community, in large part, according to beliefs about the role that corporations should play in contributing to efforts to maximize social justice around the world. Those who oppose CSR have argued that attempting to mitigate social harm is not the business of private industry, and consider CSR a glorified public relations campaign that damages the health of the economy and halts industry growth and development. On the contrary, proponents of CSR argue that corporations should view social justice programs as a long-term capital investment that reinforces the productivity of the corporation’s inputs and outputs. At issue is the question of what role businesses should play in the community. TOMS is an example of a for-profit company that has made CSR the business of its business, and has benefitted from it (TOMS Shoes has become an estimated $100 million company).

While some may argue that the fundamental purpose and nature of business is to maximize returns to shareholders, not to delve into societal concerns, CSR and its ability to address societal issues, as TOMS’ has shown, is an integral part of profit maximization in today’s society.

–Aryan Hawkins, contributing writer

 

CON: CSR’s Poster Child Reveals Weaknesses in the Movement

Since its founding in 2006, the TOMS shoe company has become a poster child for Corporate Social Responsibility (CSR). The for-profit company operates on a novel “buy one, give one” principle, donating one pair of new shoes for every pair purchased.

Though TOMS was founded right before the 2007 financial crisis, it survived and grew to be a $100 million company by combining conspicuous consumption with conspicuous charity. It also appears to be successful in its charitable goals. By 2012, the company had donated approximately two million pairs of shoes to poor children abroad.

But is TOMS proof that a socially-conscious company can succeed? Or is it merely another example of shrewd marketing allowing a company to take advantage of a population’s desire to do good without doing much?

Many TOMS enthusiasts are surprised to learn that their feel-good shoes are manufactured not in the United States, but in China, a country hardly synonymous with ethical manufacturing processes. Even if, as TOMS insists, their manufacturing facilities “pay fair wages and follow local labor standards,” shipping over two million pairs of shoes from China to the U.S. has an enormous environmental impact (two million additional pairs of shoes were produced in China, Ethiopia and Argentina and shipped to various countries as donations). Is the environmental damage outweighed by the good the company is doing by donating shoes to children in need?

Furthermore, is the company even doing the good it intends? Critics have argued for years, even before TOMS existed, that donating products to communities in need rather than encouraging the infrastructure that would allow the members to provide for themselves hinders development and stunts employment. While it feels good to hand a shoeless child a new pair of shoes so she can go to school, it solves little if her parents do not have a viable means to provide for her when she outgrows that pair.

As more and more companies become interested in CSR, the public must be careful not to take such efforts at face value. Consumers must question whether a company’s CSR efforts are doing good, or simply making a show of it. They must also determine which other concerns are being compromised to achieve the CSR results. Critical thinking and thoughtful consumption is essential to prevent CSR from becoming another hollow marketing tool.

–Kari Kepple, contributing writer

2013 ELR symposium poster 11x17 2-page-001

The above article is the opinion of the author alone and does not necessarily reflect the views of Fordham Law nor the Record editorial board and staff.

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