Corporate social responsibility and the bottom line

Purpose To clarify the relationship between corporate social responsibility (CSR) and profits. Design/methodology/approach Explicates CSR against the background of a larger thesis (Coase) about the role of firms in a market economy. Findings There are three different senses of CSR: negative – what not to do (illegal); positive – innovative products and services; and supplementary. There is a clear hierarchy or prioritization here: negative > positive > supplementary. Practical implications There are four areas in which supplementary obligations contribute directly to the bottom line: the environment, marketing, recruitment, and international. Originality/value This paper overcomes false dualisms between CSR and profits, avoids hidden political agendas, and offers persuasive arguments for firms to engage in relevant CSR activity.