When Principles Pay: Corporate and Social Responsibility and the Bottom Line

Although even a cursory glance at a newspaper reveals some new incident of corporate malfeasance—predatory lending, shady deals between private defense contractors and the government, industrial pollution—Columbia Business School professor Heal argues that “there is a cost to anti-social corporate behavior.” Heal points out that the most pernicious lenders have gone bankrupt; a defense contractor executive has been fired; and corporations can generate higher profits and more social good if they can align their interests with society The book presents case studies of corporations “doing well by doing good” (Toyota, British Petroleum, Starbucks) and surprisingly diverse and effective economic incentives for business people and organizations to act responsibly. Useful sections delineate the challenges—and rewards—of ethical outsourcing and clarify the important distinctions between genuine social responsibility and the public relations techniques that masquerade as philanthropy. Readers conversant in economics will find a wealth of fascinating analysis, whether or not they agree with the author’s optimistic middle ground between unfettered capitalism and intrusive regulation. (May)