Summary and analysis by Mark Katchen, CIH

On August 23 Dr. Aneel Karnani published an Op Ed in The Wall Street Journal titled "The Case Against Corporate Social Responsibility" in which he calls the belief that "businesses have a responsibility to act in the public interest and will profit from doing so" ineffective and flawed. Invoking the nearly 40-year-old argument of Milton Friedman that an executive's sole responsibility is to maximize shareholder profits, Dr. Karnani dismisses corporate social responsibility efforts as irrelevant and even dangerous. His article prompted a maelstrom of thoughtful responses from CSR professionals criticizing his argument and generated hundreds of comments on Twitter and elsewhere. The piece was also the topic of a panel on CSR at the Asian MBA's Annual Leadership Conference.

It is naive to expect businesses to pursue corporate social responsibility over profitability, Dr. Karnani argues, advocating for increased government regulation as the ultimate solution to protecting the public good. While he acknowledges roles for watchdog groups and self-regulation, Dr. Karnani touts government regulation as a "far more effective protector of the public good than any campaign for corporate social responsibility." However, one of the many problems with this approach is that government regulations are less about results and more about a command-and-control approach.

Karnani is associate professor of strategy at the Ross School of Management at the University of Michigan, which, ironically as some writers have noted, is hosting this year's Net Impact conference - an annual gathering of more than 2500 business students, educators and business leaders focused on CSR. Tim Mohin, Director of CSR at AMD and a board member of Net Impact, summed up Dr. Karnani's article best:

"While it may not have been his intent, Dr. Karnani's provocative opinion may have done more to promote CSR than to slow it. Having stirred up legions of impassioned objectors, he has added momentum to the movement."