The Market For Virtue: The Potential And Limits Of Corporate Social Responsibility

Activists often find it easier and faster to influence corporate behavior than craft legislation. But such company-focused efforts may be shortsighted and unlikely to stick, argues David Vogel. As he explains in his book, The Market for Virtue, lasting social change needs a combination of solid governmental support and committed corporate action.

Vogel, a professor of business ethics at the Haas School of Business and a professor of political science at the University of California, Berkeley, takes a comprehensive look at the movement for corporate social responsibility, highlighting strengths and weaknesses. He reviews CSR research and articles from the past decade, and makes a strong case that the “market for virtue” has led to improvements in child labor laws, a reduction in greenhouse gases, and fairer prices for agricultural products around the world.

According to Vogel, the following market forces often jumpstart CSR: consumer demand for responsibly made products; actual (or threatened) consumer boycotts; “naming and shaming” practices by non-governmental organizations; pressure from socially responsible investors; and values held by employees and management. Yet as he points out, there is no guarantee that a company will sustain its efforts past a marketing campaign if practices and standards are not enshrined in law. And corporations will only participate for the long-term in CSR if it is good for their bottom line.

Vogel raises a number of excellent points on the present and future of CSR and explains the balancing act governments and corporations must perform to enable social change.
– Manda Salls [HBS Working Knowledge Annotation]

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