Bachelor of General Studies (BGS) Degree Practice Exam

Who ultimately bears the costs associated with corporate social responsibility?

1. Shareholders

2. Employees

3. Consumers

4. Government

The correct answer is: Consumers

The costs associated with corporate social responsibility (CSR) are typically absorbed by consumers. When a company invests in responsible practices—such as environmentally friendly manufacturing, ethical labor practices, or community engagement—these efforts can lead to an increase in the company's operational expenses. To maintain profit margins, companies often pass these costs onto consumers through higher prices for their products or services. While shareholders, employees, and government might have indirect financial implications related to CSR initiatives, such as potential impacts on stock prices, employee morale, or public funding, the most direct effect tends to be on consumers who ultimately pay for the added costs of socially responsible practices.