In his book, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility, Professor David Vogel of the Haas School of Business, UC Berkeley, studies the accomplishments of corporate social responsibility (CSR).
Vogel writes that while corporations have contributed to social and environmental improvements, CSR has not affected most companies' financial performance. The most effective strategy for improving both private and public goals is government regulation.
Firms in Vogel's research include: IBM, Johnson & Johnson, Boeing, Citicorp, Fannie Mae, Circuit City, Pitney Bowes, Walgreens, and Wells Fargo.
Though social responsibility may contribute to a firm's financial and share performance, it is unlikely to be critical to it. The exception would be firms, such as Starbucks, Patagonia, Ikea, that are built around visions, values, and goals other than profit maximization, where CSR contributes to the financial success.
One reason for why CSR is not a necessary condition for long term success is that there are few socially responsible firms that last. For instance, Merck, recognized for distributing without charge a drug for blindness, suffers financial difficulties for the withdrawal of Vioxx in 2004. The Body Shop International experienced financial difficulties in the 1990s, and eventually was acquired by L'Oreal.
Vogel concludes that the responsible firms, must survive in the competitive markets, just like the less responsible firms.
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