Essay About Market Forces And Small Groups

Corporate Responsibility
Commentary Paper 3Hanzhou Yang hy454Do not fight out battle for us, just give us assistance when we need it.The development of consumer social responsibilityBased on the assumption that The role of consumer social responsibility in sustainable corporate responsibility development（understanding how to promote behavioral change by firms requires an understanding of how people respond, sometimes imperfectly to non-price factors）The introduction of the bank, no response from the consumersWhy companies want to involve in social responsibility? CSR programs, in which firms voluntarily try to reduce environmental and socialnegative impacts, are increasingly popular but the notion of CSR means different things todifferent people2. According to Crouch (2006) CSR is essentially ‘corporate externalityrecognition’. For a firm to reduce production of a negative externality requires it to takeaction that will cost it something, but for which it will not receive payment.How can a profit-maximizing firm be expected to take action of such a kind? Whatactually drives firms to engage in environmental CSR? Firms can adopt a CSR program and“over-comply” with environmental regulation for several reasons, two of which seemparticularly strong. The underlying idea is no company will invest in CSR for nothing( Market forces, in fact, include win/win opportunities to increase revenues with environmentally responsible consumers who are willing to pay a higher price as a premium for environment friendly products and to cut costs by improving the efficiency of resource use, labour market advantages with employees who have green preferences, opportunities to reduce cost of capital from green investors (Arora and Gangopadhyay, 1995; Lutz, Lyon and Maxwell, 2000).1). One is moving ahead of an expectable trend of both legislation and consumers preferences becoming stricter. This can be interpreted as risk management.2). Another is the use environmental reputation to gain market shares from less environmentally friendly competitors (Heal, 2005).The pure market effects emerge from a company that has done just what it was supposedto do.3) The company can pitch certain customer segmentation.Cerin (2006) reports that firms are usually reluctant to adopt a green technology due toits higher-than-average costs. However, small groups of environmentally-minded consumerswho are willing to pay higher prices for green products can provide a market niche for greenfirms with a small market share, eventually forcing overall adoption of the greener technologyin an industry. Consumer environmental preferences play an important role in the environmentprotection.Does it really has something to do with the consumers choicesIn contrast to the above arguments, we can find evidence suggesting an opposite view.