There is a widespread belief that firms must choose between profit and CSR (Corporate Social Responsibility). But how true is that?

Several management gurus among them Porter and Prahalad, tried to bridge the two coming up with ideas like strategic CSR and the profitable world’s poor.

The dilemma, however, comes up because our thinking fails to consider all the critical components of the case. We think of the end goals of profit or CSR ignoring preceding important principles like the founding purpose of the firm, that is why the firm was established meaning what society need it is there to serve (Business purpose—how to make it work for your business | LinkedIn ).

Markets have valued firms with society-based purposes – IKEA to create a better everyday life for the many people, Google to make information available to the wider society, SW Airlines to meet short-haul travel needs at lower costs than road transport, are but a few examples that a society-based purpose connects firms to profits.

So, through purpose, there is a natural association of Profit with CSR: The firm’s purpose serves society needs and is therefore CSR at its highest impact, and profit (proponent Milton Friedman) is the license (legitimacy) that society grants the firm to continue to operate or even grow.


Panikos Sardos is the Managing Director of P&E Sardos Business Solutions Int., a management consulting firm that offers advisory services, coaching and training. Email: psardos@sardossolutions.com or telephone: +357 99640912, or visit our site at www.sardossolutions.com