Business Studies – 1.5.2 The role of stakeholder groups | e-Consult

The objective of expansion, which often involves entering new markets or increasing production, can frequently conflict with maintaining a strong corporate social responsibility (CSR) record. Expansion often requires significant investment and may lead to environmental concerns or ethical dilemmas. Increased production, for instance, can lead to higher pollution levels and resource depletion, directly contradicting CSR principles of environmental sustainability.

Expanding into new markets might involve exploiting cheaper labour in countries with weaker labour laws, raising ethical concerns about worker rights and fair treatment. This can damage the company's reputation and brand image, leading to boycotts and negative publicity. Furthermore, expansion could lead to displacement of local communities or damage to local ecosystems, further undermining CSR efforts.

A company might choose to expand into a region with lax environmental regulations to reduce costs, sacrificing its commitment to environmental protection. This short-term profit gain could have long-term negative consequences for the environment and the company's reputation. The conflict arises because expansion often prioritizes economic growth over social and environmental considerations.