---
title: Vicious cycle of guilt
date: "2002-11-25T12:00:00Z"
categories:
  - links
wp_id: 1021
description: I explore the Economist's argument that corporate social responsibility creates a cycle of guilt. I agree, but question if manager incentives truly align with stakeholder interests when short-term performance dominates the modern job market.
keywords: [corporate social responsibility, business ethics, stakeholder theory, incentive alignment, short-termism, the economist]
---

The Economist argues that in making 'ethical practices' and 'social responsibility' prominent, [corporates create a vicious cycle of guilt-until-proven-innocent](http://www.economist.com/business/displayStory.cfm?story_id=1454728). I agree with that part. But I wonder if the incentives in companies are aligned to benefit all stakeholders. Sure, in the long-run, everything is factored into the stock price. But the short (not even the medium) run is what managers need worry about, given the dynamic job market.