The Pursuit of Malevolence – Minimizing Corporate Social Irresponsibility to Maximize Social Welfare

32 Pages Posted: 10 Sep 2014

See all articles by Christina Kleinau

Christina Kleinau

HHL Leipzig Graduate School of Management

Christian Kretzmann

Handelshochschule Leipzig (HHL)

Henning Zülch

HHL Leipzig Graduate School of Management

Date Written: September 8, 2014

Abstract

This paper turns traditional ideas about the responsibility of corporations upside down by arguing that it is not conducive to aim to maximize corporate social responsibility (CSR). Instead, corporations should embrace their social responsibility by working to minimize corporate social irresponsibility (CSI). It is more straightforward to minimize tangible sources of business and/or reputational risk, such as environmental damage or child labor in the supply chain, than to maximize a construct for which a generally accepted definition is still pending. What’s more, this enables a corporation to use its core business competencies and expertise to maximize social welfare by protecting those societal resources which are relevant to its own value creation process. Thereby, the demand that corporations accept responsibility for a broad range of stakeholders is met but the importance of profits as the fundamental measure of a corporation’s capability to create value for society is not undermined. Failing to introduce this conception means maintaining the status-quo whereby the net societal benefit of corporations’ CSR activities is questionable and the opportunity costs are high as CSI issues and the detrimental effects thereof on corporations’ core business and societal stakeholders will remain unmanaged.

Keywords: business ethics, corporate mission, corporate social irresponsibility, corporate social responsibility, incentives, risk management, shareholder value principle, sustainability

JEL Classification: M14, D60, G38

Suggested Citation

Kleinau, Christina and Kretzmann, Christian and Zülch, Henning, The Pursuit of Malevolence – Minimizing Corporate Social Irresponsibility to Maximize Social Welfare (September 8, 2014). Available at SSRN: https://ssrn.com/abstract=2493183 or http://dx.doi.org/10.2139/ssrn.2493183

Christina Kleinau

HHL Leipzig Graduate School of Management ( email )

Jahnallee 59
Leipzig, 04109
Germany

Christian Kretzmann (Contact Author)

Handelshochschule Leipzig (HHL) ( email )

Jahnallee 59
Leipzig, 04109
Germany

Henning Zülch

HHL Leipzig Graduate School of Management ( email )

Jahnallee 59
Leipzig, Saxony D-04109
Germany
+49(341)9851701 (Phone)
+49(341)9851702 (Fax)

HOME PAGE: http://www.hhl.de/faculty-research/faculty/accounting-auditing/

Register to save articles to
your library

Register

Paper statistics

Downloads
89
Abstract Views
1,046
rank
285,638
PlumX Metrics