The Impulse of Modern Cause Capitalism

The cause capitalism, or the Corporate Social Responsibility (CSR) movement, had a modern day revival in the 1980s when the anti-apartheid movement forced companies to withdraw investments from South Africa.  The 1990s found teens and adults boycotting retail chains in protest of supplier sweatshop labor conditions and companies realized they can’t disregard the tie that bound social issues to their bottom line.

The most comprehensive research on the topic examined 52 previous studies on corporate social responsibility over a 30-year-period. Data were collected from 34,000 firms worldwide. The 2004 study (conducted by Marc Orlitzky of the University of the Redlands, and Sara Rynes and Frank Schmidt of the University) found that well-lead, profitable businesses had excellent social and environmental records. Inversely, well-run companies with strong social or environmental missions exhibited solid profits.

Rynes says “It’s a virtuous cycle. As a company becomes more socially responsible, its reputation and financial performance go up, which causes them to become even more socially responsible.”

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