earlycsr是什么

WHATISCSRPeoplecreateorganizationstoleveragetheircollectiveresourcesinpursuitofcommongoals.
Asorganizationspursuethesegoals,theyinteractwithothersinsidealargercontextcalledsociety.
Basedontheirpurpose,organizationscanbeclassifiedasfor-profits,govern-ments,ornonprofits.
Ataminimum,for-profitsseekgainfortheirowners;governmentsexisttodefinetherulesandstructuresofsocietywithinwhichallorganizationsmustoperate;andnonprofits(sometimescalledNGOs—nongovernmentalorganizations)emergetodosocialgoodwhenthepoliticalwillortheprofitmotiveisinsufficienttoaddresssociety'sneeds.
Aggregatedacrosssociety,eachofthesedifferentorganizationsrepresentsapowerfulmobi-lizationofresources.
IntheUnitedStates,forexample,morethan595,000socialworkersareemployedlargelyoutsidethepublicsector—manyinthenonprofitcommunityandmedicalorganizations—fillingneedsnotmetbyeithergovernmentortheprivatesector.
1Societyexists,therefore,asamixofthesedifferentorganizationalforms.
Eachperformsdifferentroles,buteachalsodependsontheotherstoprovidethecompletepatchworkofexchangeinteractions(productsandservices,financialandsocialcapital,etc.
)thatconstituteawell-functioningsociety.
Whethercalledcorporations,companies,businesses,proprietor-ships,orfirms,forexample,for-profitorganizationsalsointeractwithgovernment,tradeunions,suppliers,NGOs,andothergroupsinthecommunitiesinwhichtheyoperate,inbothpositiveandnegativeways.
Eachofthesegroupsoractors,therefore,canclaimtohaveastakeintheoperationsofthefirm.
Somebenefitmore,someareinvolvedmoredirectly,andotherscanbeharmedbythefirm'sactions,butallareconnectedinsomewaytowhatthefirmdoesonaday-to-daybasis.
R.
EdwardFreemandefinedtheseactorsorgroupsasafirm'sstakeholders.
Hisdefinitionreflectsthebroadreachoffor-profitactivityinoursocietyandincludesallthosewhoarerelatedinsomewaytothefirm'sgoals.
23CHAPTER1AFirm'sStakeholdersAstakeholderinanorganizationis(bydefinition)anygrouporindividualwhocanaffectorisaffectedbytheachievementoftheorganization'sobjectives.
3Simplyput,afirm'sstakeholdersincludethoseindividualsandgroupsthathaveastakeinthefirm'soperations.
Suchabroadviewhasnotalwaysbeenthenorm,however.
Overtime,astheimpactofbusinessonsocietyhasgrown,therangeofstakeholderswhoseconcernsacompanyneedstoaddresshasfluctuated—fromtheinitialviewofthecorporationasalegalentitythatisgrantedsocietalpermissiontoexistbycharter,toanarrowerfocusontherightsofowners,toabroaderrangeofconstituents(includingemployeesandcustomers),andbackagainandattheendofthe20thcentury,toadisproportionatefocusonshareholders.
Increasingly,however,companiesareagainadoptingabroaderstakeholderoutlook,extend-ingtheirperspectivetoincludeconstituentssuchasthecommunitiesinwhichtheyoperate.
Today,companiesaremorelikelytorecognizethedegreeofinterdependencebetweenthefirmandeachofthesegroups,leavinglessroomtoignorestakeholders'pressingconcerns.
Justbecauseanindividualororganizationmeetsthisdefinitionofan"interestedconstituent,"however,doesnotcompelafirm(eitherlegallyorlogically)tocomplywitheverystakeholderdemand.
Nevertheless,affectedpartieswhoareignoredlongenoughmaytakeactionagainstthefirm,suchasaproductboycott,4ortheymayturntogovernmentforredress.
Indemocraticsoci-eties,laws(suchasantidiscriminationstatutes),rulingsbygovernmentagencies(suchastheInternalRevenueService'stax-exemptregulationsfornonprofits),andjudicialinterpretations(suchascourtrulingsontheliabilitiesofboardmembers)provideaminimalframeworkforbusi-nessoperationsthatreflectsaroughconsensusofthegoverned.
Becausegovernmentcannotanticipateeverypossibleinteraction,however,legalactiontakestime,andageneralconsensusisoftenslowtoform.
Asaresult,regulatorypowersoftenlagbehindtheneedforaction.
Thisisparticularlysoincomplexareasofrapidchange,suchasinformationtechnologyandmedicalresearch.
Thus,wearriveatthediscretionaryareaofdecisionmakingthatbusinessleadersfaceonaday-to-daybasis,whichgeneratestwoquestionsfromwhichthestudyofCSRsprings:4—STRATEGICCORPORATESOCIALRESPONSIBILITYWhatistherelationshipbetweenabusinessandthesocietieswithinwhichitoperatesWhatresponsibilitiesdobusinessesowesocietytoself-regulatetheiractionsinpursuitofprofitCSR,therefore,isbothcriticalandcontroversial.
Itiscriticalbecausethefor-profitsectoristhelargestandmostinnovativepartofanyfreesociety'seconomy.
Companiesintertwinewiththesocietiesinwhichtheyoperateinmutuallybeneficialways,drivingsocialprogressandaffluence.
Infact,thetermcompanycomesfromacombinationoftheLatinwordscumandpanis,thelit-eraltranslationofwhichoriginallymeant"breakingbreadtogether.
"5Today,however,themean-ingofacompanyimpliesafargreaterdegreeofcomplexity.
Companiescreatemostofthejobs,wealth,andinnovationsthatenablethelargersocietytoprosper.
Theyaretheprimarydeliverysystemforfood,housing,medicines,medicalcare,andothernecessitiesoflife.
Withoutmoderndaycorporations,thejobs,taxes,donations,andotherresourcesthatsupportgovernmentsandnonprofitswoulddeclinesignificantly,negativelyaffectingthewealthandwell-beingofsocietyasawhole.
Businessesaretheenginesofsocietythatpropelustowardabetterfuture.
Atthesametime,however,CSRremainscontroversial.
Peoplewhohavethoughtdeeplyaboutwhybusinessesexistorwhatpurposetheyhavewithinsocietydonotagreeontheanswers.
DocompanieshaveobligationsbeyondthebenefitstheireconomicsuccessalreadyprovidesInspiteoftherisingimportanceofCSRtodayforcorporateleaders,academics,andbureaucratsalike,manystilldrawontheviewsoftheNobelprize–winningeconomistMiltonFriedman,whoarguedagainstCSRinthe1960sbecauseitdistractedleadersfromeconomicgoals.
Friedmanbelievedthattheonly"socialresponsibilityofbusinessistoincreaseitsprofits"6—thatsocietybenefitsmostwhenbusinessesfocusonmaximizingtheirfinancialsuccess.
7Thereareothers,however,wholooktotheviewsofbusinessleaderssuchasDavidPackard,acofounderofHewlett-Packard:Ithinkmanypeopleassume,wrongly,thatacompanyexistssimplytomakemoney.
Whilethisisanimportantresultofacompany'sexistence,wehavetogodeeperandfindtherealreasonsforourbeing.
Asweinvestigatethis,weinevitablyconcludethatagroupofpeo-plegettogetherandexistasaninstitutionthatwecallacompanysothattheyareabletoaccomplishsomethingcollectivelythattheycouldnotaccomplishseparately—theymakeacontributiontosociety,aphrasewhichsoundstritebutisfundamental.
8ThisbookwilltrytonavigatebetweenthesecompetingperspectivestooutlineaviewofCSRthatbothrecognizesitsstrategicvaluetofirmsandincorporatesthesocialvaluesuchaperspectivealsobringstoafirm'smanystakeholders.
ThegoalistopresentacomprehensiveperspectiveofCSR.
CORPORATESOCIALRESPONSIBILITYTheentiretyofCSRcanbediscernedfromthethreewordsthisphrasecontains:corporate,social,andresponsibility.
CSRcoverstherelationshipbetweencorporations(orotherlargeorganizations)andthesocietieswithwhichtheyinteract.
CSRalsoincludestheresponsibili-tiesthatareinherentonbothsidesoftheserelationships.
CSRdefinessocietyinitswidestsenseandonmanylevels,toincludeallstakeholderandconstituentgroupsthatmaintainanongoinginterestintheorganization'soperations.
Chapter1:WhatIsCSR—5Stakeholdergroupsrangefromclearlydefinedconsumers,employees,suppliers,creditors,andregulatingauthoritiestoothermoreamorphousconstituents,suchaslocalcommunitiesandeventheenvironment.
Forthefirm,tradeoffsmustbemadeamongthesecompetinginter-ests.
Issuesoflegitimacyandaccountabilityexist,withmanynonprofitorganizations,forexample,claimingexpertiseanddemandingrepresentativestatus,evenwhenitisunclearexactlyhowmanypeoplesupporttheirvisionorclaims.
Ultimately,however,eachfirmmustidentifythosestakeholdersthatconstituteitsoperatingenvironmentandthenprioritizetheirstrategicimportancetotheorganization.
Increasingly,companiesneedtoincorporatethecon-cernsofstakeholdergroupswithintheorganization'sstrategicoutlookorrisklosingsocietallegitimacy.
CSRprovidesaframeworkthathelpsfirmsembracethesedecisionsandadjustCSR9Aviewofthecorporationanditsroleinsocietythatassumesaresponsibilityamongfirmstopursuegoalsinadditiontoprofitmaximizationandaresponsibilityamongafirm'sstake-holderstoholdthefirmaccountableforitsactions.
theinternalstrategicplanningprocesstomaximizethelong-termviabilityoftheorganiza-tion.
Considersomedifferentviewpoints:Thenotionofcompanieslookingbeyondprofitstotheirroleinsocietyisgenerallytermedcorporatesocialresponsibility(CSR)Itreferstoacompanylinkingitselfwithethicalvalues,transparency,employeerelations,compliancewithlegalrequirementsandoverallrespectforthecommunitiesinwhichtheyoperate.
Itgoesbeyondtheoccasionalcommu-nityserviceaction,however,asCSRisacorporatephilosophythatdrivesstrategicdeci-sion-making,partnerselection,hiringpracticesand,ultimately,branddevelopment.
(SouthChinaMorningPost,2002)10CSRisaboutbusinessesandotherorganizationsgoingbeyondthelegalobligationstomanagetheimpacttheyhaveontheenvironmentandsociety.
Inparticular,thiscouldincludehoworganizationsinteractwiththeiremployees,suppliers,customers,andthecommunitiesinwhichtheyoperate,aswellastheextenttheyattempttoprotecttheenvi-ronment.
(TheInstituteofDirectors,UnitedKingdom,2002)11Thesocialresponsibilityofbusinessencompassestheeconomic,legal,ethical,anddis-cretionaryexpectationsthatsocietyhasoforganizationsatagivenpointintime.
(ArchieB.
Carroll,1979)12Figure1.
1elaboratesonArchieCarroll'sconceptualframework.
Thisusefultypologyisnotrigid,however;issuescananddoevolveovertime.
136—STRATEGICCORPORATESOCIALRESPONSIBILITYDiscretionaryResponsibilitiesEthicalResponsibilitiesLegalResponsibilitiesEconomicResponsibilitiesFigure1.
1TheCorporateSocialResponsibilityHierarchySource:ArchieB.
Carroll,'ThePyramidofCorporateSocialResponsibility:TowardtheMoralManagementofOrganizationalStakeholders,'BusinessHorizons,July–August,1991,p.
42.
Chapter1:WhatIsCSR—7CSR,therefore,isafluidconcept.
Itisbothameansandanend.
Anintegralelementofthefirm'sstrategy—thewaythefirmgoesaboutdeliveringitsproductsorservicestomarkets(means)—itisalsoawayofmaintainingthelegitimacyofitsactionsinthelargersocietybybring-ingstakeholderconcernstotheforeground(end).
Thesuccessofafirm'sCSRreflectshowwellithasbeenabletonavigatestakeholderconcernswhileimplementingitsbusinessmodel.
CSRmeansvaluingtheinterdependentrelationshipsthatexistamongbusinesses,theirstakeholdergroups,theeconomicsystem,andthecommunitieswithinwhichtheyexist.
CSRisavehiclefordiscussingtheobligationsabusinesshastoitsimmediatesociety,awayofproposingpolicyideasonhowthoseobligationscanbemet,andatoolforidentifyingthemutualbenefitsformeetingthoseobligations.
Simplyput,CSRaddressesacompany'srelationshipswithitsstakeholders.
Assuch,CSRcoversanunevenblendofissuesthatriseandfallinimportancefromfirmtofirmovertime.
Recently,ethicsandcorporategovernance,forexample,havebeenofgrow-ingsocietalconcern.
Thisisaresultofthelackofboardoversightandpoorexecutivedecisionmaking,whichledtotheaccounting-relatedscandalsexposedduringthefirstdecadeofthiscentury,followedshortlythereafterbythe2007–2009financialcrisis.
ThecorporateresponsetothisheightenedconcernisevidencedbytherapidgrowthoftheEthicsandComplianceOfficersAssociation(ECOA).
Figure1.
2showsthat,sinceitsfoundingin1992,theECOAhasgrowntomorethan1,300members(http://www.
theecoa.
org/).
15Inaddition,theECOATheCorporateSocialResponsibilityHierarchyArchieCarroll,UniversityofGeorgia,wasoneofthefirstacademicstomakeadistinc-tionbetweendifferentkindsoforganizationalresponsibilities.
Hereferredtothisdis-tinctionasafirm's"pyramidofcorporatesocialresponsibility.
"14Fundamentally,afirm'seconomicresponsibilityistoproduceanacceptablereturnonitsowners'investment.
Animportantcomponentofpursuingeconomicgainwithinalaw-basedsociety,however,islegalresponsibility—adutytoactwithinthelegalframeworkdrawnupbythegovernmentandjudiciary.
Takenonestepfurther,afirmhasanethicalresponsibilitytodonoharmtoitsstakeholdersandwithinitsoperatingenvironment.
Finally,firmshaveadiscretionaryresponsibility,whichrepresentsmoreproactive,strategicbehaviorsthatcanbenefitthefirmandsociety,orboth.
OneofthecentralthesesofthisbookisthatwhatwasethicalorevendiscretionaryinCarroll'smodelisbecomingincreasinglynecessarytodayduetothechangingenvi-ronmentwithinwhichbusinessesoperate.
Assuch,ethicalresponsibilitiesaremorelikelytoequatetoeconomicandlegalresponsibilitiesasthefoundationforbusinesssuc-cess.
Tofulfillitsfundamentaleconomicobligationstoownersintoday'sglobalizingandwiredworld,afirmshouldincorporateabroadstakeholderperspectivewithinitsstrate-gicoutlook.
Associetalexpectationsofthefirmrise,sothepenaltiesimposedbystake-holdersforperceivedCSRlapseswillbecomeprohibitive.
estimatesthat,in2008,85%oftheFortune500firmshadadoptedtheECOAposition,withmuchofthatexpansionoccurringsince2000.
Asaresultoftheblendofacademicstudyandmanagerialpractice,ourunderstandingofCSRandhowfirmsareintegratingitiscomplexandstillevolving.
AndbecauseCSRinflu-encesallaspectsofafirm'sstrategicoutlookandday-to-dayoperations,CSR'scuttingedgecanbecontroversial,especiallyamongthosestakeholderswhoseinterestsarenotconsideredprimarybydecisionmakers.
CORPORATESTRATEGYANDCSRCSR,therefore,embracestherangeofeconomic,legal,ethical,anddiscretionaryactionsthataffecttheeconomicperformanceofthefirm.
Asignificantpartofafirm'sfundamentalrespon-sibilitiesiscomplyingwiththelegalorregulatoryrequirementsthatrelatetoday-to-dayopera-tions.
Tobreaktheseregulationsistobreakthelaw,whichdoesnotconstitutesociallyresponsiblebehavior.
Clearly,adheringtothelawisanimportantcomponentofanyethicalorganization.
But,legalcomplianceismerelyaminimumconditionofCSR.
16Ratherthanfocusonfirms'legalandregulatoryobligations,StrategicCSRfocusesmoreontheethicalanddiscretionaryconcernsthatarelesspreciselydefinedandforwhichthereisoftennoclearsocietalconsensus.
CSRisakeyelementofbusinessstrategy.
InthewordsofTheEconomist,itis"justgoodbusiness.
"17Strategystrivestoprovidethebusinesswithasourceofsustainablecompetitiveadvantage.
Foranycompetitiveadvantagetobesustainable,however,thestrategymustbeacceptabletothewiderenvironmentinwhichthefirmcompetes.
CSRdoneincorrectly—or,worse,completelyignored—maythreatenwhatevercomparativeadvantagethefirmholdswithinitsindustry.
Onehundredandtwentyyearsago,forexample,StandardOilTrustpres-suredindustrysupplierstotreatitscompetitorsunfairlyintheeyesofsociety.
Theresultwasa8—STRATEGICCORPORATESOCIALRESPONSIBILITY020040060080010001200140016001992199319941995199619971998199920002001200220032004200520062007Figure1.
2TheGrowthinMembershipoftheEthicsandComplianceOfficersAssociation(1992–2007)seriesofantitrustlawsintroducedbygovernmentthateventuallyforcedStandardOiltobreakintoseparatecompanies.
Today,activistorganizationssuchasGreenpeaceandtheRainforestActionNetworktargetcorporateactionstheydeemtobesociallyirresponsible.
Theresultoftheseprotestsandboycottscanbedramaticshiftsincorporatepoliciesanddamagetothebrand,suchasShell'schangeofcourseregardingthebreakupoftheBrentSparoilplatform,18orCitigroup'sadoptionofwide-rangingenvironmentalmetricsinthecriteriaitusestograntloans—actionthatultimatelyresultedinCitigroupplayingaleadingroleinthecreationoftheEquatorPrinciples.
19However,leadersshouldaddressstakeholderconcernsliketheseinwaysthatcarrystrate-gicbenefitforthefirm.
CSRisnotaboutsavingthewhalesorendingpovertyorotherworth-whilegoalsthatareunrelatedtoafirm'soperationsandarebetterlefttogovernmentornonprofits.
Instead,CSRisabouttheeconomic,legal,ethical,anddiscretionaryissuesthatstakeholdersviewasdirectlyrelatedtothefirm'splansandactions.
Thesolutiontotheseissues,theoverlapwhereeconomicandsocialvalueintersect,isattheheartofanysuccess-fulCSRpolicy.
MichaelPorterandMarkKrameroutlinethisapproachindefining"strategiccorporatephilanthropy,"butthesameapproachcanbeappliedtothewiderissueofCSR:Theacidtestofgoodcorporatephilanthropyiswhetherthedesiredsocialchangeissoben-eficialtothecompanythattheorganizationwouldpursuethechangeevenifnooneeverknewaboutit.
20Beyondthedesiredchanges,however,aretheapproachesemployedtoachievethosechanges.
Toooften,theend(buildingshareholderwealth,forexample)hasbeenusedtojus-tifythemeans(pollutingtheenvironment).
AfirmthatseekstoimplementaCSRpolicythatcarriesstrategicbenefitsisconcernedwithboththeendsofeconomicviabilityandthemeansofbeingsociallyresponsible.
Assuch,theconnectionbetweenthesemeansandendsisanimportantcomponentofstrategicCSRandsomethingthatsetsitapartfromotherareasofsocialresponsibility.
Thisdistinctionbecomesapparentwhendiscussinganissuesuchasethics,whichiscon-cernedaboutthehonesty,judgment,andintegritywithwhichvariousstakeholdersaretreated.
Thereisnodebate:EthicalbehaviorisaprerequisiteassumptionforstrategicCSR.
Itishardtoseehowafirm'sactionscouldbebothsociallyresponsibleandunethical.
Ethics,however,isnotthecentralfocusforstrategicCSR,exceptinsofarasconstituentsareaffectedorsoci-etydefinesafirm'sactionsasunethical,thusharmingthefirm'slegitimacyandprofitpoten-tial.
Likewise,othersociallyimportantissuesalsoexistoutsidethedirectfocusofstrategicCSR.
Concernsoverdomesticandinternationalincomedisparity,genderissues,discrimina-tion,humanrights,spiritualityandworkplacereligiosity,technologicalimpactsonindigenouspopulations,andotherissuesaffectsocietalwell-being.
Unlessfirmstakeactionsthatdirectlyaffectstakeholdersintheseareas,however,thestudyofthesetopicsmightbetterfallunderethics,publicpolicy,sociology,ordevelopmentaleconomicscourses,whicharebettersuitedtoexplorethesecomplexandsociallyimportanttopicsingreaterdepth.
THEEVOLUTIONOFCSRTheneedforsocialresponsibilityamongbusinessesisnotanewconcept.
AncientChinese,Egyptian,andSumerianwritingsoftendelineatedrulesforcommercetofacilitatetradeandChapter1:WhatIsCSR—9ensurethatthewiderpublic'sinterestswereconsidered.
Eversince,publicconcernabouttheinteractionbetweenbusinessandsocietyhasgrowninproportiontothegrowthofcor-porateactivity:ConcernsabouttheexcessesoftheEastIndiaCompanywerecommonlyexpressedintheseventeenthcentury.
TherehasbeenatraditionofbenevolentcapitalismintheUKforover150years.
Quakers,suchasBarclaysandCadbury,aswellassocialists,suchasEngelsandMorris,experimentedwithsociallyresponsibleandvalues-basedformsofbusiness.
AndVictorianphilanthropycouldbesaidtoberesponsibleforconsiderableportionsoftheurbanlandscapeofoldertowncentrestoday.
21Evidenceofsocialactivisminresponsetoorganizationalactionsalsostretchesbackacrossthecenturies,mirroringthelegalandcommercialdevelopmentofcompaniesastheyestab-lishedthemselvesasthedrivingforceofmarket-basedsocieties:Thefirstlarge-scaleconsumerboycottEnglandinthe1790soverslave-harvestedsugar.
22Withinafewyears,morethan300,000Britonswereboycottingsugar,themajorproductoftheBritishWestIndianslaveplantations.
Nearly400,000signedpetitionstoParliamentdemandinganendtotheslavetrade.
.
.
.
In1792,theHouseofCommonsbecamethefirstnationallegislativebodyintheworldtovotetoendtheslavetrade.
23Althoughwealthyindustrialistshavelongsoughttobalancethemercantileactionsoftheirfirmswithpersonalorcorporatephilanthropyasaresponsetosocialactivismorotherdemands,CSRultimatelyoriginateswithleaderswhoviewtheirroleasstewardsofresourcesownedbyothers(e.
g.
,shareholders,theenvironment).
ThewordsofRayAnderson,founderandchairmanofInterfaceCarpets,areinstructive:Cananyproductbemadesustainably.
.
.
OnedayearlyinthisjourneyitdawnedonmethatthewayIhadbeenrunningInterfaceisthewayoftheplunderer,plunderingsome-thingthatisnotmine;somethingthatbelongstoeverycreatureonearth.
AndIsaidtomyself,mygoodness,thedaymustcomewhenthisisillegal,whenplunderingisnotallowed[and].
.
.
peoplelikemewillendupinjail.
Thelargestinstitutiononearth,thewealthiest,mostpowerful,themostpervasive,themostinfluential,istheinstitutionofbusinessandindustry—thecorporation,whichalsoisthecurrentpresentdayinstrumentofdestruction.
Itmustchange.
24LeaderssuchasAnderson25faceabalancingactthataddressesthetradeoffsbetweentheowners(shareholders)thatemploythem,thesocietythatenablestheirfirmstoprosper,andtheenvironmentthatprovidesthemwiththerawmaterialstoproduceproductsandservicesofvalue.
Whenspecificelementsofsocietyviewleadersandtheirfirmsasfailingtomeetsocietalneeds,activismresults.
Thatisastrueof18th-centuryEnglandasitistoday.
CurrentexamplesofsocialactivisminresponsetoaperceivedlackofCSRbyorganizationsareinthismorning'snewspapers,onTVnews,andinchatroomsandWebsitesallovertheInternet.
WhethertheresponseiscivildisobedienceinSeattle,Turin,orCancunprotestingtheimpactofglobalcorporationsondevelopingsocieties,consumerboycottsofproductsthatarehazardoustohealth,orNGO-ledcampaignstoeradicatesweatshopconditionsinthefactories10—STRATEGICCORPORATESOCIALRESPONSIBILITYofbranded-clothingfirms,CSRhasbecomeanincreasinglyrelevanttopicinrecentdecadesincorporateboardrooms,inbusinessschoolclassrooms,online,andinfamilylivingrooms.
Inadditiontopublicrelationsfiascosthatdamageafirm'ssalesandimage,thedirectfinancialimpactofCSRfailuresinalitigioussocietyisneverfarbehind.
Widespread,long-termindustrypractices,whichmayhavepreviouslybeendeemeddiscretionaryorethicalcon-cerns,canbedeemedillegalorsociallyunacceptableunderaggressivelegalprosecutionornovelsocialactivism.
SuchviolationsarelesslikelyinfirmswithastrongcommitmenttoCSR.
Forexample,theuncoveringofthewidespreadpracticeofbackdatingemployeestockoptionsbyfirms,firstpublicizedwidelybytheWallStreetJournal,26indicatesthedangersofassumingthatyesterday'sacceptedbusinesspracticeswillnecessarilybeacceptabletooth-erstoday.
Businessesoperateagainstanever-changingbackgroundofwhatisconsideredsociallyresponsible.
CSRisnotastagnantconcept.
Itisdynamicandcontinuestoevolveasculturalexpectationschange.
Ontheonehand,theseever-changingstandardsandexpectationscompoundthecomplex-ityfacedbycorporatedecisionmakers.
Worse,thesestandardsvaryfromsocietytosociety;evenamongcultureswithinagivensociety.
Worsestill,theyalsoevolveovertime.
Facedwithakaleidoscopicbackgroundofevolvingstandards,businessdecisionmakersmustconsideravarietyoffactorsonthewaytoimplementation.
IntheearlyhistoryoftheUnitedStates,forexample,theAlienTortClaimsAct"wasorig-inallyintendedtoreassureEuropethatthefledglingU.
S.
wouldn'tharborpiratesorassassins.
ItpermitsforeignerstosueinU.
S.
courtsforviolationsofthelawof'nations.
'"27Today,this1789lawisbeingusedinanattempttoholdU.
S.
firmsaccountablefortheiractionsoverseas,aswellastheactionsoftheirpartners(whetherotherbusinessesorgovernments).
Thus,whatmaybelegal,orevenencouraged,inonecountrymaybringlegalrepercussionsinanother.
Andthisisnotjustanisolatedexample.
FirmssuchasCitibank,Coca-Cola,IBM,JCPenny,LeviStrauss,Pfizer,Gap,Limited,Texaco,andUnocalhaveallfacedpossiblesuitsunderthissamelaw,whichmayextendtohundredsofothernationalandinternationalfirms.
28Unocal,oneofthecompaniesinthislistwhosecasehadadvancedthefurthestinU.
S.
courts,announcedinDecember2004,ontheeveofhavingitscaseheardonappeal,thatitwouldset-tleforanundisclosedsum:Lawsuitsfiledby15villagersfromMyanmar.
.
.
saidthecompany"turnedablindeye"toatrocitiesallegedlycommittedbysoldiersguardinganaturalgaspipelinebuiltbythecompanyanditspartnersinthe1990s.
.
.
.
AjointstatementbythetwosidessaidUnocalwouldpaytheplaintiffsanunspecifiedsumandfundprogrammestoimprovelivingcon-ditionsforpeoplelivingnearthepipeline.
29In2008,inthefirstmajorcasetobebroughttotrialundertheAlienTortClaimsAct,TexacowasclearedofanyresponsibilityfortheshootingdeathoftwoNigerianvillagerswhowereprotestingononeofthecompany'soilplatformsin1998.
Thevillagerswerekilledbypoliceandsecurityofficerswhowerebroughtinbythefirmtodiffusethesituation.
TheTexacocasesetsanimportantprecedentforfutureprosecutionsagainstfirmsoperatinginforeigncountriestobebroughttotrial:Despitetheoutcome,.
.
.
thetrialwasasuccessforthehumanrightscommunitybecausethelawyerssucceededinbringingacasetotrialundertheAlienTortslaw.
30Chapter1:WhatIsCSR—1112—STRATEGICCORPORATESOCIALRESPONSIBILITYNike,morecommonly,reactedtostakeholdercriticismofsweatshopconditionsinitsfac-toriesbydemandingthatitssuppliersprovidetheiremployeeswithwagesandworkingcon-ditionsthatmeettheexpectationsofconsumersindevelopedsocieties—consumerswhomightboycottNikeproductsiftheyperceivethecompanytobeactinginanunfairorirre-sponsiblemanner.
Today,mediaandNGOactivistsaremorelikelytocriticizethepoortreat-mentofworkersindevelopingeconomiesbyholdingcorporationstostandardsfoundintheirhomemarkets,especiallytheUnitedStatesandtheEuropeanUnion(EU).
TheresultisincreasedcomplexityandriskthatcanharmeconomicoutcomeswhenCSRislacking.
Ontheotherhand,however,thepursuitofeconomicgainremainsanabsolutenecessity.
CSRdoesnotrepealthelawsofeconomicsunderwhichfor-profitorganizationsmustoper-ate(tosociety'sbenefit).
TheexampleofMaldenMills,below,demonstratesthat,unlessafirmiseconomicallyviable,eventhebestofintentionswillnotenablestakeholderstoachievetheirgoalsandmaximizesocialvalue.
MaldenMills31AaronFeuerstein,CEOofMaldenMills(foundedin1906,familyowned),wasanexcel-lentmantoworkfor:HerewasaCEOwithaunionizedplantthatwasstrike-free,abosswhosawhiswork-ersasakeytohiscompany'ssuccess.
32In1995,however,hisapproachtobusinesswasputtothetestwhenafiredestroyedMaldenMills'textileplantinLawrence,aneconomicallydepressedtowninnortheasternMassachusetts.
Withaninsurancesettlementofcloseto$300mil-lioninhand,Feuersteincouldhave,forexample,movedoperationstoacountrywithalowerwagebase,orhecouldhaveretired.
Instead,herebuiltinLawrenceandcon-tinuedtopayhisemployeeswhilethenewplantwasunderconstruction.
"33Asaresult,"hewasidolizedthroughoutthemedia.
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.
.
ThenationalattentiontoFeuerstein'sactbroughtmorethantheadulationofbusinessethicsprofessors—itbroughtincreaseddemandforhisproduct,Polartec,thelightweightfleecethecatalogueindustrylovestosell.
"34Inadditiontofullpay,Feuersteinalsocontinuedallhisemployeesonfullmedicalbenefitsandguaranteedthemajobwhenthefactorywasreadytorestartproduction.
Inspiteofthecost,thedecisionforFeuersteinwasaneasyone:RebuildinginLawrencewouldcostover$300millionwhilekeeping1,400laid-offworkersonfullsalariesforaperiodofupto3monthswouldcostanadditional$20million.
"Ihavearesponsibilitytotheworker,bothblue-collarandwhitecollar,"Feuersteinlatersaid.
"Ihaveanequalresponsibilitytothecommunity.
Itwouldhavebeenunconscionabletoput3,000peopleonthestreets[twoweeksbeforeChristmas]anddeliveradeathblowtothecitiesofLawrenceandMethuen.
Maybeonpaperourcompanyis[now]worthlesstoWallStreet,butIcantellyouit's[really]worthmore.
"35CSRisanimportantcomponentofacompany'sstrategicandoperatingperspective;however,alone,itisnotenough.
Itcertainlydoesnotreplacetheneedforaneffectivebusinessmodel,andnocompany,whateverthemotivation,canorshouldspendindefi-nitelymoneythatitdoesnothave.
Manufacturingoffshoreinalow-costenvironment,forexample,remainsavalidstrategicdecision,particularlyinanincreasinglyglobalizingbusinessworld.
WhereCSRconsiderationsplayamajorroleisinhowsuchdecisionsaremadeandimplemented.
And,asTheEconomistnotes,thereisstillplentyofroomleftforimprovement:Corporatesocialresponsibility,onceado-goodingsideshow,isnowseenasmainstream.
Butasyet,toofewcompaniesaredoingitwell.
38Associetiesrethinkthebalancebetweensocietalneedsandeconomicprogress,CSRwillcontinuetoevolveinimportanceandcomplexity.
Andalthoughthiscomplexitymuddiesthewealth-creatingwaters,anawarenessoftheseevolvingexpectationsholdsthepotentialforincreasedcompetitiveadvantage.
TheexamplesaboveindicatethattheculturalcontextwithinwhichCSRisperceivedandevaluatediscrucial.
THECULTUREANDCONTEXTFirmsoperatewithinthecontextofbroadersociety.
TheresultinginteractionrequiresaCSRperspectiveinorderforfirmstomaintaintheirsociallegitimacy.
Yet,societiesdifferandso,therefore,doeswhattheyconsideracceptable.
Althoughdifferencesrangefromtheanthro-pologicalandsociologicaltothehistoricalanddemographic,twodimensionsconsistentlyinfluencethevisibilityofCSR:democracyandeconomics.
Differentsocietiesdefinetherelationshipbetweenbusinessandsocietyindifferentways.
Uniqueexpectationsspringfrommanyfactors,withwealthysocietieshavinggreaterresourcesand,perhaps,moredemandingexpectationsthatemergefromthegreateroptionswealthbrings.
Thereasoningisstraightforward:Inpoordemocracies,thegeneralsocialwell-beingisfocusedonthenecessitiesoflife—food,shelter,trans-portation,education,medicine,socialorder,jobs,andthelike.
Governmentalorself-imposedCSRrestrictionsaddcoststhatpoorsocietiescanillafford.
Associetiesadvance,however,expectationschange,andthegeneralsocialwell-beingisredefined.
ThisongoingredefinitionandevolutionofsocietalexpectationscausestheCSRresponsealsotoevolve,asthisexampleofairpollutionandpublictransportationinChileindicates.
Chapter1:WhatIsCSR—13ButtheincreaseddemandforPolartec(http://www.
polartec.
com/)Feuerstein'sactionsgeneratedwasn'tenoughtooffsetthedebthehadbuiltupwaitingfortheplanttoberebuilt:$100million.
36Thissituationwascompoundedbythedownturninthemarket,aswellascheaperfleecealternativesfloodingthemarket.
MaldenMillsfiledforbank-ruptcyprotectioninNovember2001.
3714—STRATEGICCORPORATESOCIALRESPONSIBILITYSantiago,ChileInthe1980s,airpollutionindowntownSantiago,Chile,wasanimportantissue,justasitwasinLosAngeles,California.
Theproblem,however,wasaddresseddifferentlyinrelationtothelevelofeconomicdevelopmentfoundinthesetwopollution-retainingbasins.
StringentlawswentintoeffectintheLosAngelesbasinduringthe1980s.
AtthesametimeinChile,necessities(includinglow-costtransportation)gotahigherprioritybecauseofwidespreadpoverty.
Aftermorethanadecadeofrobusteconomicgrowth,however,Chileanseventuallyuseddemocraticprocessestoputlimitationsonthenum-berofcarsenteringSantiagoandrequiredincreasinglystringentpollutionstandards.
Thisshiftinprioritiesreflectedtheirchangingsocietalneedsandexpectations,alongwiththegrowingwealthtoaffordthenewrulesandlegalactions.
DifferencesinCSRexpectationsamongrichandpoorsocietiesareamatterofpriorities.
Theneedfortransportation,forexample,evolvesintoaneedfornonpollutingformsoftrans-portationassocietybecomesmoreaffluent.
Althoughpoorsocietiesvaluecleanairjustasadvancedonesdo,competingneedsmaytakepriority—oneofwhichwillbetheneedforlow-costtransportation.
Asasocietyprosperseconomically,newexpectationscompelproducerstomakevehiclesthatpolluteless—ashiftinemphasis.
Intime,theseexpectationsmayevolvefromdiscretionarytomandatory(legal).
Thisexamplereinforcestheideathatitisinanyorganization'sbestinterest(for-profit,nonprofit,orgovernmental)toanticipate,reflect,andstrivetomeetthechangingneedsofitsstakeholderstoremainsuccessful.
Inthecaseoffor-profits,theprimarystakeholdergroupsareitsowners(itsshareholders),customers,andemployees,withoutwhichthebusinessfails.
Otherconstituents,however,fromsupplierstothelocalcommunity,alsomatter.
Businessesmustsatisfytheprimarygroupsamongtheseconstituents,therefore,iftheyhopetoremainviableoverthelongterm.
Whentheexpectationsofdifferentstakeholdersconflict,CSRentersagrayarea,andmanagementhastobalancecompetinginterests.
CSRrepresentsanargumentforafirm'seconomicinterests,wheresatisfyingstakeholderneedsbecomescentraltoretainingsocietallegitimacy(and,therefore,financialviability)overthelongterm.
Muchdebate(andcriticism)intheCSRcommunityspringsfromwell-meaningpartieswhoarguethesamefactsfromdifferentperspectives,breakingdownalongpartisanandideologicallines.
Understandingthesedifferentperspectives,therefore,isanimportantcomponentofunderstandingthebreadthanddepthofCSR.
Anintroductiontotheunderlyingmoral,rational,andeconomicargumentsforCSRfollows.
AMORALARGUMENTFORCSRAlthoughrecognizingthatprofitsarenecessaryforanybusinesstosurvive,for-profitorga-nizationsareabletoobtainthoseprofitsonlybecauseofthesocietyinwhichtheyoperate.
CSRemergesfromthisinteractionandtheinterdependentrelationshipbetweenfor-profitsandsociety.
Itisshapedbyindividualandsocietalstandardsofmorality,ethics,andvaluesthatdefinecontemporaryviewsofhumanrightsandsocialjustice.
Thus,towhatextentisabusinessobligedtorepaythedebtitowessocietyforitscontinuedbusinesssuccessThatis,whatmoralresponsibilitiesdobusinesseshaveinreturnforthebene-fitssocietygrantsAndalso,towhatextentdotheprofitsthebusinessgenerates,thejobsitpro-vides,andthetaxesitpaysalreadymeetthoseobligationsAsanacademicstudy,CSRrepresentsanorganizedapproachtoansweringthesequestions.
Asanapplieddiscipline,itrepresentstheextenttowhichbusinessesneedtodeliverontheirsocietalobligationsasdefinedbysociety.
Chapter1:WhatIsCSR—15AMoralArgumentforCSRCSRbroadlyrepresentstherelationshipbetweenacompanyandtheprinciplesexpectedbythewidersocietywithinwhichitoperates.
Itassumesbusinessesrecognizethatfor-profitentitiesdonotexistinavacuumandthatalargepartoftheirsuccesscomesasmuchfromactionsthatarecongruentwithsocietalvaluesasfromfactorsinternaltothecompany.
CharlesHandyconstructsacompellingargumentthatbusinesseshaveamoralobligationtomovebeyondthegoalsofmaximizingprofitandsatisfyingshareholdersaboveallotherstakeholders:Thepurposeofabusiness.
.
.
isnottomakeaprofit,fullstop.
Itistomakeaprofitsothatthebusinesscandosomethingmoreorbetter.
That"something"becomestherealjustifi-cationforthebusiness.
.
.
.
Itisamoralissue.
Tomistakethemeansfortheendistobeturnedinononeself,whichSaintAugustinecalledoneofthegreatestsins.
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Itissalu-tarytoaskaboutanyorganization,"Ifitdidnotexist,wouldweinventit""Onlyifitcoulddosomethingbetterormoreusefulthananyoneelse"wouldhavetobetheanswer,andprofitwouldbethemeanstothatlargerend.
39AsimilarsentimentisexpressedinaquoteattributedtoPeterDrucker:Profitforacompanyislikeoxygenforaperson.
Ifyoudon'thaveenoughofit,you'reoutofthegame.
Butifyouthinkyourlifeisaboutbreathing,you'rereallymissingsomething.
40Atonelevel,themoralargumentforCSRreflectsagive-and-takeapproach,basedonamesh-ingofthefirm'svaluesandthoseofsociety.
Societymakesbusinesspossibleandprovidesitdirectlyorindirectlywithwhatfor-profitsneedtosucceed,rangingfromeducatedandhealthyworkerstoasafeandstablephysicalandlegalinfrastructure,nottomentionaconsumermarketfortheirproducts.
Becausesociety'scontributionsmakebusinessespossible,thosebusinesseshaveareciprocalobligationtosocietytooperateinwaysthataredeemedsociallyresponsibleandbeneficial.
Andbecausebusinessesoperatewithinthelargercontextofsociety,societyhastherightandthepowertodefineexpectationsforthosewhooperatewithinitsboundaries:ConservativesandRepublicansmayliketoportray"wealth-producing"businessesaspre-cariousaffairsthatbestowtheirgiftsindependentlyofthesocietyinwhichtheytrade.
Theoppositeisthecase.
Theintellectual,human,andphysicalinfrastructurethatcreatessuc-cessfulcompanies,alongsidetheirmarkets,isasocialproductandthat,inturn,isshapedbythecharacterofthatsociety'spublicconversationandthecapacitytobuildeffectivesocialinstitutionsandprocesses.
41Atadeeperlevel,however,societiesrestonaculturalheritagethatgrowsoutofaconflu-enceofreligion,mores,andfolkways.
Thisheritagegivesrisetoabeliefsystemthatdefinestheboundariesofsociallyandmorallyacceptablebehaviorbypeopleandorganizations.
Formany,afocusonmoneyaloneisdispiriting—"asvitalasprofitis,itseemsinsufficienttogivepeoplethefulfillmenttheycrave.
"42Althoughnotalwayscodifiedintodogmaorlaws,thecul-turalheritageleadstoanevolvingdefinitionofsocialjustice,humanrights,andenviron-mentalstewardship,theviolationofwhichisdeemedmorallywrongandsociallyirresponsible.
Toviolatetheseimplicitmoralboundariescanleadtoalossoflegitimacythatthreatensthelong-termviabilityoftheorganization.
ARATIONALARGUMENTFORCSRThelossofsocietallegitimacycanleadtothecountervailingpowerofsocialactivism,restric-tivelegislation,orotherconstraintsonthefirm'sfreedomtopursueitseconomicandotherinterests.
Violationsofethicalanddiscretionarystandardsarenotjustinappropriate,theypre-sentarationalargumentforCSR.
Becausesocietalsanctions(suchaslaws,fines,prohibitions,boycotts,orsocialactivism)affectthefirm'sstrategicgoals,effortstocomplywithsocietalexpectationsarerational,regard-lessofmoralarguments.
Whencompliancewithmoralexpectationsisbasedonhighlysubjec-tivevalues,therationalargumentrestsonsanctionavoidance:Itmaybemorecost-effective,forexample,toaddressissuesvoluntarily,ratherthanwaitforamandatoryrequirementbasedongovernmentorjudicialaction.
Oneargumentisthatbusinessescanwaitforthelegallymandatedrequirementsandthenreacttothem.
43Thisreactiveapproachmaypermitfor-profitstoignoretheirmoralobligationsandconcentrateonmaximizingprofitsorotherbusinessgoals;however,italsoinevitablyleadstostricturesbeingimposedthatnotonlyforcemandatorycompliancebutoftenforcecomplianceinwaysthatareneitherpreferablenorefficientforthefirm.
Byignoringtheopportunitytoinfluencethedebateintheshorttermthroughproactivebehaviors,anorgani-zationismorelikelytofinditsbusinessoperationsandstrategyhamperedoverthelongterm.
OneneedonlyconsidertheevolutionofaffirmativeactionintheUnitedStates.
16—STRATEGICCORPORATESOCIALRESPONSIBILITYAffirmativeActionPriortothe1960s,businessescoulddiscriminateagainstcurrentorpotentialemployeesonthebasisofrace,sex,religion,age,nationalorigin,veteran'sstatus,pregnancy,dis-ability,sexualpreference,andothernon-merit-basedcriteria.
Puttingasidethemoralconcerns,doingsowasadiscretionaryrightthatwaslegal,iffarfromethical.
Socialactivismmovedtheseethicalanddiscretionarydecisionsintothearenaofpublicdebateand,intime,intolegalprohibitions.
Theresultformanybusinessesthatwereguiltyofpastorpresentdiscriminationmeantaffirmativeactionplanstoredressracialorotherimbalancesintheirworkforce.
Thoseorganizationsthatlaggedquicklyfoundthemselvesthetestcaseinlitigationfocusedoninstitutionalizingthenewlegislation.
AsRobertKennedysaidduringthecivilrightsmovementtothosefirmsthatwerereluctanttochange:"Ifyouwon'tenddiscriminatorypracticesbecauseit'stherightthingtodo;thendoitbecauseit'sgoodforbusiness.
"44Wearenotsuggestingfirmsshouldhavebeenproactivetoensurediscriminationremainedlegal.
Thatwouldbeamoralorethicallapseandwouldhaveinvolvedfightingtheevolvingsoci-etalconsensus,riskingthesocietallegitimacyofthefirm.
Instead,therationalargumentadvo-catesself-interestinavoidingtheinevitableconfrontation.
Bynotadoptingaproactive(oratleastaccommodative)approachtofairtreatment,manybusinessesfoundtheirbehaviorsuddenly(andexpensively)curtailedthroughlegislation,judicialandagencyinterpretations,andpenaltiesbecauseofafailuretointerpretcorrectlytheevolvingsocialandbusinessenvironment.
Chapter1:WhatIsCSR—17ARationalArgumentforCSRCSRisarationalargumentforbusinessesseekingtomaximizetheirperformancebyminimizingrestrictionsonoperations.
Intoday'sglobalizingworld,whereindividualsandactivistorganizationsfeelempoweredtoenactchange,CSRrepresentsameansofanticipatingandreflectingsocietalconcernstominimizeoperationalandfinancialconstraintsonbusiness.
TherationalargumentforCSRissummarizedbytheironlawofsocialresponsibility,whichstates:Inafreesociety,discretionaryabuseofsocietalresponsibilitiesleads,eventu-ally,tomandatedsolutions.
45Restated:Inademocraticsociety,poweristakenawayfromthosewhoabuseit.
Thehistoryofsocialandpoliticaluprisings—fromCromwellinEngland,totheAmericanandFrenchrevolutions,totheoverthrowoftheshahofIranorthecommu-nistgovernmentoftheSovietUnion—underscorestheconclusionthatthosewhoabusepowerorprivilegesowtheseedsfortheirowndestruction.
Parallelsexistinthebusinessarena.
FinancialscandalsaroundtheturnofthiscenturyatEnron,WorldCom,Adelphia,HealthSouth,andothericonsofU.
S.
businesscauseddiscretion-limitinglawsandrulings,suchastheSarbanes-Oxleylegislationof2002,thatmovepreviouslydiscretionaryandethicalissuesintothelegalarena.
Similarly,firmsthatpaytheirCEOsandotherexecutivesamountsofmoneythatareperceivedtobeexcessive,evenfollowingpoorper-formance,faceunwelcomeoversightfromregulatoryagenciesandpoliticianswhohavetoanswertotheirelectorates:Publiccorporationsarepoliticalinstitutions:Theydependonthegoodwillofthepublictooperatesuccessfully.
TheabsenceofthatgoodwillleavesthemopentoattacksfromCongress,regulators,ambitiousattorneysgeneral,pensionfunds,hedgefunds,unions,nongovernmentalorganizationsandjustaboutanyoneelsewhowantsasayinacorpora-tion'saffairs.
46ByadoptingarationalargumentforCSR,however,firmsareabletointerpretchangingsoci-etalvaluesandstakeholderexpectationsandacttoavoidfuturesanctions.
SensingthatthetideofpublicopinionintheUnitedStatesismovinginfavorofregulatingcarbonemissions,forexample,firmshaveformedgroupstolobbythegovernmentforchange.
ThegroupBICEP(BusinessforInnovativeClimateandEnergyPolicy,http://www.
ceres.
org/bicep)wasestablishedbyfivefirmswithproactiveCSRtrackrecords—LeviStrauss,Nike,Starbucks,SunMicrosystems,andTimberland.
Perhapsmoresurprisingly,however,USCAP(UnitedStatesClimateActionPartnership,http://www.
us-cap.
org/),which"supportstheintroductionofcarbon18—STRATEGICCORPORATESOCIALRESPONSIBILITYlimitsandtrading.
.
.
.
wassetupbyenergycompaniesandindustrialmanufacturers"thatmightotherwisehaveopposedgovernmentactioninthisarea.
47GeneralMotors,forexample,becamethefirstU.
S.
automobilemanufacturertojoinUSCAP,"whichseekseconomy-widegreenhousegasemissionreductionsof60to80percentby2050.
"48Similarmotivesresultinnewspaperheadlines,suchas,"ExxonCEOAdvocatesEmissionsTax.
"49Implementingarationalperspective,thesefirmsrealizethatitisintheirintereststoengagewithregulators,ratherthanopposelegislationthatisinevitable.
Assuch,actingproac-tivelyinasociallyresponsiblemannertoavoidunwelcomeintrusionorhelpshapeprospec-tivelegislationisanactofrationalbusiness—particularlysoinlightoftheoverwhelminganecdotalevidencethatdiscretionaryabusesleadtoalossofdecision-makingfreedomsandfinancialrepercussionsforfor-profitorganizations.
ANECONOMICARGUMENTFORCSRSummingthemoralandrationalargumentsforCSRleadstoaneconomicargument.
Inaddi-tiontoavoidingmoral,legal,andothersocietalsanctions,incorporatingCSRintoafirm'soperationsoffersapotentialpointofdifferentiationandcompetitivemarketadvantageonwhichfuturesuccesscanbebuilt.
50AnEconomicArgumentforCSRCSRisanargumentofeconomicself-interestforbusiness.
CSRaddsvaluebecauseitallowscompaniestoreflecttheneedsandconcernsoftheirvariousstakeholdergroups.
Bydoingso,acompanyismorelikelytoretainitssocietallegitimacyandmaximizeitsfinancialviabilityoverthemediumtolongterm.
Simplyput,CSRisawayofmatchingcorporateoperationswithsocietalvaluesandexpectationsthatareconstantlyevolving.
CSRinfluencesallaspectsofabusiness'sday-to-dayoperations.
Everythinganorganiza-tiondoescausesittointeractwithoneormoreofitsstakeholdergroups.
Asaresult,compa-niesneedtobuildawatertightimagewithrespecttoasbroadanarrayofkeystakeholdersaspossible.
Whetherasanemployer,producer,buyer,supplier,orasaninvestment,afirm'sattractivenessandsuccessareincreasinglylinkedtothestrengthsofitsimageandbrand(s).
Concerningsociallyresponsibleinvestments(SRI),51forexample,"fundsthatinvestwithaconsciencehavemorethandoubledinsizeoverthelast10years.
"52Certainly,evenforthosewhobelievethattheonlypurposeofabusinessistoincreasethewealthoftheowners,beingperceivedassociallyirresponsibleriskslosingaccesstoanalreadysignificant(andgrowing)segmentofinvestorsandtheircapital.
SRIfundsamountedto$202billionin2007and,bysomemeasures,outperformedbroadermarketfunds,suchastheS&P500.
53CSRaffectsoperationswithinacorporationbecauseoftheneedtoconsiderconstituentgroups.
Eachareabuildsonalltheotherstocreateacompositeofthecorporationintheeyesofitsstakehold-ers.
Businessesmustsatisfykeygroupsamongtheseconstituentsiftheyhopetoremainviableoverthelongterm.
However,thesemessages[firmssendtostakeholders]arenotincompatiblewithpursuingshare-holdervalue.
Rather,theygivethecompaniesalicensetooperateinordertopursueit.
54StrategicCSRexpoundstheeconomicargumentinfavorofCSR.
Webelieveitistheclear-estofthethree(moral,rational,andeconomic)argumentssupportingCSRandemphasizestheimportanceofCSRforbusinessestoday.
Importantly,however,theeconomicargumentforCSRoperatesattheintersectionoftheeconomicself-interestofthefirmandthebroaderwell-beingofsociety.
Assuch,thisperspectiveoffersaplanofactionthathasasitsgoalthemaximizationofbotheconomicandsocialvalue.
Animportantdistinctionisbetweenaneffectivebusinessmodelandabroader,moresus-tainablemodelfor(all)businesses.
TheBodyShop,forexample,hasimplementedasuc-cessfulbusinessmodel,whichsubscribestoamoralargumentforCSR.
Anactivistorganization,itisabletodrawonsupportfromthesmallpercentageofthepopulationthatisawareandsufficientlyresponsivetoaprogressivesocialagendaandtranslateitintoeconomicsuccess.
Incontrast,however,aneconomicargumentforCSRspeakstoabroadmodelforbusinesses,whichrecognizesthelimitedapplicationofmoralactivismand,instead,searchesforastandardtowhichallorganizationscansubscribe.
TheresultisanapproachtobusinessthatidentifiesthestrategicbenefitsofaCSRandstakeholderperspectiveinawaythatsus-tainsthefirmandmaximizestheaddedtotalvalueofitsoperations.
WHYISCSRIMPORTANTCSRisimportant,therefore,becauseitinfluencesallaspectsofacompany'soperations.
Increasingly,consumerswanttobuyproductsfromcompaniestheytrust,supplierswanttoformbusinesspartnershipswithcompaniestheycanrelyon,employeeswanttoworkforcompaniestheyrespect,largeinvestmentfundswanttosupportfirmsthattheyperceivetobesociallyresponsible,andnonprofitsandNGOswanttoworktogetherwithcompaniesseek-ingpracticalsolutionstocommongoals.
Satisfyingeachofthesestakeholdergroups(andothers)allowscompaniestomaximizetheircommitmenttotheirowners(theirultimatestake-holders),whobenefitmostwhenallofthesegroups'needsarebeingmet.
AsCarlyFiorina,formerchairandchiefexecutiveofficerofHewlett-Packard,hasargued:Ihonestlybelievethatthewinningcompaniesofthiscenturywillbethosewhoprovewiththeiractionsthattheycanbeprofitableandincreasesocialvalue—companiesthatbothdowellanddogood.
.
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.
And,increasingly,shareowners,customers,partnersandemployeesaregoingtovotewiththeirfeet—rewardingthosecompaniesthatfuelsocialchangethroughbusiness.
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.
Thisissimplythenewrealityofbusiness—onethatweshouldandmustembrace.
55CSRisincreasinglycrucialtosuccessbecauseitgivescompaniesamissionandstrategyaroundwhichmultipleconstituentscanrally.
Thebusinessesmostlikelytosucceedintoday'srapidlyevolvingglobalenvironmentwillbethosebestabletobalancetheoftenconflictinginterestsoftheirmultiplestakeholders.
Lifestylebrandfirms,inparticular,needtolivetheidealstheyconveytotheirconsumers.
WHYISCSRINCREASINGLYRELEVANTTODAYCSRasanelementofstrategyisbecomingincreasinglyrelevantforbusinessestodaybecauseoffiveidentifiabletrends—trendsthatseemlikelytocontinueandgrowinimportancethroughoutthe21stcentury.
56Chapter1:WhatIsCSR—19GrowingAffluenceApoorsociety,inneedofworkandinwardinvestment,islesslikelytoenforcestrictreg-ulationsandpenalizeorganizationsthatmightotherwisetaketheirbusinessandmoneyelse-where.
Consumersindevelopedsocieties,ontheotherhand,canaffordtochoosetheproductstheybuyand,asaconsequence,expectmorefromthecompaniesthatmakethoseproducts.
Thissensehasincreasedinthewakeofthecorporatescandalsattheturnofthiscenturyandthe2007–2009financialcrisis,bothofwhichreducedpublictrustincorporationsandpublicconfidenceintheabilityofregulatoryagenciestocontrolcorporateexcess.
Affluencemat-tersandleadstochangingsocialexpectations.
Firmsoperatinginaffluentsocieties,therefore,faceahigherburdentodemonstratetheyaresociallyresponsible.
Asaresult,increasingafflu-enceonaglobalbasiswillcontinuetopushCSRuptheagendasofcorporationsworldwide.
EcologicalSustainabilityAnincreaseingeneralaffluenceandchangingsocietalexpectationsisenhancedbyagrowingconcernfortheenvironment.
WhentheAlaskanpipelinewasbuiltinthe1970s,crewscoulddriveonthehardenedpermafrost200daysayear.
Today,climatechangesleavethepermafrostsolidforonly100dayseachyear,whileNASAphotographsrevealthatthearc-ticicecap"hasshrunkmorethan20percent"since197957andthattherateofdecreaseisaccelerating.
58Increasingpricesforrawmaterials,risingmutationratesamongamphibianpopulations,andothergrowinganecdotalevidenceallsuggestthattheEarthhasecologicallimits.
ThespeedatwhichweareapproachingtheEarth'slimitsandthepotentialconse-quencesofouractionsarecomplicatedissues,aboutwhichexpertsdonotagree.
Whatisnotindoubt,however,isthathumaneconomicactivityisdepletingtheworld'sresourcesandcausingdramaticchangestothemixofgassesintheEarth'satmosphere—changesthatcouldbecomeirreversibleinthenearfuture.
Asaresult,firmsthatareperceivedtobeindifferenttotheirenvironmentalresponsibilitiesarelikelytobecriticizedandpenalized.
Examplesinclude:court-imposedfines(ExxonValdez),59negativepublicity(Monsanto'sgeneticallymodifiedfoods),60orconfrontationsbyactivistgroups(FriendsoftheEarth).
61GlobalizationIncreasingly,corporationsoperateinaglobalbusinessenvironment.
Operatinginmultiplecountriesandculturesmagnifiesthecomplexityofbusinessexponentially.
Notonlyaretheremorelawsandregulationstounderstand,butmanymoresocialnormsandculturalsubtletiestonavigate.
Inaddition,therangeofstakeholderstowhommultinationalfirmsareheldaccountableincreases,asdoesthepotentialforconflictamongcompetingstakeholderdemands.
Whileglobalizationhasincreasedthepotentialforefficienciesgainedfrompro-ductionacrossborders,ithasalsoincreasedthepotentialtobeexposedtoaglobalaudienceifafirm'sactionsfailtomeettheneedsandexpectationsofthelocalcommunity.
TheFreeFlowofInformationThegrowinginfluenceofglobalmediaconglomeratesmakessurethatanyCSRlapsesbycompaniesarebroughtrapidlytotheattentionoftheworldwidepublic,ofteninstantaneously.
Scandalisnews,andyesterday'seyewitnessesaretodayarmedwithpocket-sizevideocameras20—STRATEGICCORPORATESOCIALRESPONSIBILITYorpicturestakenbymobilephonesthatprovidealltheevidencenecessarytoconvictbyTV.
Inaddition,theInternetfuelscommunicationamongactivistgroupsandlike-mindedindividuals,empoweringthemtospreadtheirmessagewhilegivingthemthemeanstocoordinatecollec-tiveaction.
Suchtechnologiesarereachingbeyondthecontrolofautocraticgovernmentsandallowingpeopletofindnewwaystomobilizeandprotest.
ThomasFriedman,forexample,explainshowthiscommunicationrevolutionisaffectingtherelationshipbetweenthegovern-mentandpeopleofIran:WhatisfascinatingtomeisthedegreetowhichinIrantoday—andinLebanon—themoresecularforcesofmoderationhaveusedtechnologieslikeFacebook,Flickr,Twitter,blog-gingandtext-messagingastheirvirtualmosque,astheplacetheycannowgather,mobi-lize,plan,informandenergizetheirsupporters,outsidethegripofthestate.
62Googleisonecompanythatisincreasinglyfindingnewwaystoapplythesenewcommu-nicationtechnologies.
Chapter1:WhatIsCSR—21CSRNewsletters:GoogleTheInternethasenormouspowertoreshapethewayinformationiscommunicatedaroundtheglobe.
Thisphenomenonwillcontinuetoevolveinwaysthatwehavenotyetevenbeguntoimagine(atleast,thoseofuswhodonotworkforGoogle).
AsarecentarticleintheWallStreetJournalpointedout,"YoucanGoogletogetahotel,findaflightandbuyabook.
NowyoumaybeabletouseGoogletoavoidtheflu.
"63ThephilanthropicarmoftheInternetsearchcompany(http://www.
google.
org/)hasreleasedanewservice(http://www.
google.
org/flutrends/)thatwilltrackInternetsearchtermsrelatedtotheflunationally(e.
g.
,coughorfever)andusethisinformationtohelpidentifypotentialoutbreaksoftheillness:ItdisplaystheresultsonamapoftheU.
S.
andshowsachartofchangesinfluactiv-ityaroundthecountry.
ThedataismeaningfulbecausetheGooglearmthatcreatedFluTrendsfoundastrongcorrelationbetweenthenumberofInternetsearchesrelatedtothefluandthenumberofpeoplereportingflusymptoms.
Thisinformationispowerfulbecauseofthespeedwithwhichitidentifiesearlytrendstowhichgovernmentagenciesandhealthproviderscanthenreact:TestsofthenewWebtoolfromGoogle.
org,thecompany'sphilanthropicunit,suggestthatitmaybeabletodetectregionaloutbreaksofthefluaweekto10daysbeforetheyarereportedbytheCentersforDiseaseControlandPrevention.
Firmsarejustbeginningtoappreciatethewaysinwhichthesecommunicationtoolswillaffecttheiroperationsandreputations.
Whatseemsapparent,however,isthattheaffectwillbedramaticandthatfirmsthatarenottransparentandaccountabletotheirstakeholderswillsufferasaresult.
22—STRATEGICCORPORATESOCIALRESPONSIBILITYBrandsAllofthesetrendsthataredrivingtheimportanceofCSRoverlapintermsoftheimpor-tanceofafirm'sreputationandbrand.
Brandstodayareoftenafocalpointofcorporatesuc-cess.
Companiestrytoestablishpopularbrandsinconsumers'mindsbecauseitincreasesanycompetitiveadvantagetheyhold,whichthenresultsinhighersalesandrevenue.
Inaddi-tion,consumersaremorelikelytopayapremiumforabrandtheyknowandtrust.
Duetogrowingdemandsfromincreasingnumbersofstakeholders,however,combinedwiththeincreasedcomplexityofbusinessinaglobalenvironmentandtheabilityofactivistsandmediaorganizationstospreadmisstepsinstantaneouslytoaglobalaudience,today,morethaneverbefore,afirm'sreputationisprecarious—hardtoestablishandeasytolose.
Asaresult,asBusinessWeek'sannualbrandsurveydemonstrates,64brandsaremorevaluablethanever,andfirmsneedtotakeevergreaterstepstoprotectaninvestmentthatisessentialtotheircontinuedsuccess.
BEYONDTRENDSBeyondthetrendsinCSRthatweidentifyinthischapter,CSRmustalsoworkinpractice.
Itmustallowfirmstoprosperaswellasactasaconduitforstakeholderconcerns.
Buthowarefirmssupposedtoidentifytheirkeystakeholdersandprioritizeamongtheircompetinginter-estsDoesCSRmattertostakeholdersArestakeholderswillingtoenterthedebateandimposetheirviewsoncorporationsDotheysharesomeoftheresponsibilityforshapingcor-porateactionsHowshouldfirmsbeginintegratingaCSRperspectiveintotheirstrategicplanningandday-to-dayoperationsTheimportanceofthestakeholdermodeltotheargumentspresentedinStrategicCSRwillbeexploredfurtherinChapter2.
ArgumentsagainstCSR(andtheoftenunintendedimplicationsofprogressiveCSRapplications)existandwillbeexploredinChapter3.
Chapter4putsCSRintostrategicperspectiveandexpandsonthegrowingimportanceofCSRanditsimpactoncorporatestrategy.
And,issuesthatinfluencetheimplementationofCSRwithinastrategicdecision-makingframeworkprovidethebasisforChapter5,whichwillconcludePartIofStrategicCorporateSocialResponsibility.
QuestionsforDiscussionandReview1.
WhydofirmsexistWhatvaluedobusinessesserveforsociety2.
Definecorporatesocialresponsibility.
WhatargumentsinfavorofCSRseemmostimportanttoyouHowisCSRdifferentfromstrategicCSR3.
NamethefourresponsibilitiesofafirmoutlinedinArchieCarroll'spyramidofCSRmodel.
Illustrateyourdefinitionsofeachlevelwithcorporateexamples.
4.
MiltonFriedmanarguedthat,"Fewtrendscouldsothoroughlyunderminetheveryfoundationsofourfreesocietyastheacceptancebycorporateofficialsofasocialresponsibilityotherthantomakeasmuchmoneyfortheirstockholdersaspossible.
"65GivetwoargumentsinsupportofFriedman'sassertionandtwoagainst.
5.
Defineanddiscussbrieflytheprimarymoral,rational,andeconomicargumentsforCSR6.
WhatfivedrivingforcesmakeCSRmorerelevanttoday7.
Ofthesefivefactors,isthereanyonethatyoufeelismoreimportantthantheothersDefendyourchoicewithexamplesfromyourownexperiencesandknowledge.
NOTESANDREFERENCES1.
U.
S.
DepartmentofLabor,BureauofLaborStatistics,"OccupationalOutlookHandbook,2008–09Edition,"http://stats.
bls.
gov/oco/ocos060.
htm#emply2.
Post,Preston,andSachsprovideanalternative,narrower,definitionofafirm'sstakeholderthattiesthegrouporactormoredirectlytothefirm'soperations:"Thestakeholdersinafirmareindividu-alsandconstituenciesthatcontribute,eithervoluntarilyorinvoluntarily,toitswealth-creatingcapacityandactivities,andwhoarethereforeitspotentialbeneficiariesand/orriskbearers.
"In"ManagingtheExtendedEnterprise:TheNewStakeholderView,"CaliforniaManagementReview,Vol.
45,No.
1,Fall2002,p.
8.
3.
R.
EdwardFreeman,StrategicManagement:AStakeholderApproach,Pitman,1984,p.
46.
4.
LibbyBrooks,"PowertothePeople,"TheGuardian,December20,2002,http://www.
guardian.
co.
uk/world/2002/dec/20/debtrelief.
development5.
JohnMicklethwait&AdrianWooldridge,TheCompany:AShortHistoryofaRevolutionaryIdea,ModernLibrary,2003,p.
8.
6.
MiltonFriedman,"TheSocialResponsibilityofBusinessistoIncreaseitsProfits,"NewYorkTimesMagazine,September13,1970.
7.
Ofcourse,thisdebatecontinuestoday.
Foroneexampleofadebatethatwashostedbyaskepti-calsourcebutincludesdifferentperspectivesfromtheRainforestActionNetworktoG.
E.
,see"CorporateSocialResponsibility:GoodCitizenshiporInvestorRip-off"BigIssues:TheJournalReport,WallStreetJournal,January9,2006,p.
R6.
8.
CharlesHandy,"What'saBusinessFor"HarvardBusinessReview,December2002,p.
54.
9.
ForacomprehensivereviewoftheevolutionofCSRasanacademicdisciplineseeArchieB.
Carroll,"CorporateSocialResponsibility:EvolutionofaDefinitionalConstruct,"BusinessandSociety,Vol.
38,No.
3,September1999,pp.
268–295.
Also,traditionaltextbookselaborateontheseissues:seeJamesE.
Postetal.
,BusinessandSociety:CorporateStrategy,PublicPolicy,Ethics,10thedition,McGraw-Hill,2002.
Finally,WilliamC.
Frederick,CorporationBeGood!
TheStoryofCorporateSocialResponsibility,DogEarPublishing,2006,offersacomprehensivetimelineanddiscussionabouttheevo-lutionofCSR.
10.
MichaelMcComb,"ProfittoBeFoundinCompaniesThatCare,"SouthChinaMorningPost,April14,2002,p.
5.
11.
RuthLea,"CorporateSocialResponsibility:IoDMemberOpinionSurvey,"TheInstituteofDirectors,UK,November2002,p.
10.
12.
ArchieB.
Carroll,"AThree-DimensionalConceptualModelofCorporatePerformance,"AcademyofManagementReview,Vol.
4,No.
4,1979,p.
500.
13.
SeeMarkS.
SchwartzandArchieB.
Carroll,"CorporateSocialResponsibility:AThree-domainApproach,"BusinessEthicsQuarterly,Vol.
13,2003,pp.
503–530foranupdateonCarroll'spyramidofCSR.
Insteadoffourlevelsofresponsibility,SchwartzandCarrolldivideafirm'sresponsibilitiesintothreedomains—economic,legal,andethical.
Thesethreeoverlappingdomainsresultinseven"CSRcategories,"orfirmprofiles,withtheappropriatecategorydeterminedbythefirm'sorientation(i.
e.
,thedifferentemphasesplacedoneachdomain).
Chapter1:WhatIsCSR—2314.
ArchieB.
Carroll,"ThePyramidofCorporateSocialResponsibility:TowardtheMoralManagementofOrganizationalStakeholders,"BusinessHorizons,July–August1991.
15.
InMarch2007,theECOAhad1,388individualmembersandapproximately750organizationalmembers.
IndividualmembersaredefinedbytheECOAas"ethicsandcomplianceprofessionals.
"16.
Itisworthnoting,however,thatactionsthatappeartobelegallypermissiblemaystillresultinlawsuitsfiledagainstfirms,underobscuretreatiesandstatutes,byinnovativeactivistsseekingtorightactualorperceivedwrongs.
17.
"JustGoodBusiness:ASpecialReportonCorporateSocialResponsibility,"TheEconomist,January19,2008.
18.
http://archive.
greenpeace.
org/comms/brent/brent.
html.
SeealsoAlexKirby,"BrentSpar'slongsaga,"BBCNews,November25,1998,http://news.
bbc.
co.
uk/1/hi/sci/tech/218527.
stm19.
MarcGunther,"TheMosquitointheTent:APeskyEnvironmentalGroupCalledtheRainforestActionNetworkisGettingUndertheSkinofCorporateAmerica,"FortuneMagazine,May31,2004,http://money.
cnn.
com/magazines/fortune/fortune_archive/2004/05/31/370717/index.
htm20.
MichaelPorterandMarkKramer,"TheCompetitiveAdvantageofCorporatePhilanthropy,"HarvardBusinessReview,Vol.
80,Issue12,December2002,p.
67.
21.
AdrianHenriques,"TenThingsYouAlwaysWantedtoKnowAboutCSR(ButWereAfraidtoAsk);PartOne:ABriefHistoryofCorporateSocialResponsibility(CSR),"EthicalCorporationMagazine,May26,2003,http://www.
ethicalcorp.
com/content.
aspContentID=59422.
MichaelArndt,"AnOdeto'TheMoney-Spinner,'"BusinessWeek,March24,2003,pp.
22–23;reviewofTheCompany:AShortHistoryofaRevolutionaryIdea,byJohnMicklethwaitandAdrianWooldridge,ModernLibrary,2003.
23.
AdamHochschild,"HowtheBritishInspiredDr.
King'sDream,"NewYorkTimes,January17,2005,p.
A21.
24.
http://www.
triplepundit.
com/pages/ray-anderson-ex.
php.
ExcerptfromaninterviewwithRayAndersonthatappearedinTheCorporation,http://www.
thecorporation.
com/25.
ForavideoupdateonInterface'sprogresstowardits"MissionZero"project(http://www.
interfaceflor.
eu/internet/web.
nsf/webpages/528_EN.
html)andgoalof"leavingzerofootprint,bytheyear2020,"seehttp://www.
interfaceflor.
eu/internet/web.
nsf/webpages/58150_EN.
html26.
MarkMaremont,"AuthoritiesProbeImproperBackdatingofOptions—PracticeAllowsExecutivestoBolsterTheirStockGains;AHighlyBeneficialPattern,"WallStreetJournal,November11,2005,p.
A1,http://www.
biz.
uiowa.
edu/faculty/elie/wsj1.
htmandCharlesForelleandJamesBandler,"ThePerfectPayday—SomeCEOsReapMillionsbyLandingStockOptionsWhenTheyAreMostValuable;Luck—OrSomethingElse"WallStreetJournal,March18–19,2006,p.
A1,http://www.
jpl.
nasa.
gov/news/news.
cfmrelease=2009-10727.
PaulMagnusson,"MakingaFederalCaseOutofOverseasAbuses,"BusinessWeek,November25,2002,p.
78.
28.
Ibid.
29.
LisaRoner,"UnocalSettlesLandmarkHumanRightsSuits,"EthicalCorporationMagazine,December20,2004,http://www.
ethicalcorp.
com/content.
aspContentID=331230.
RichardC.
Paddock,"ChevronClearedinNigeriaShootings,"LosAngelesTimes,December2,2008,http://articles.
latimes.
com/2008/dec/02/local/me-chevron231.
ForadditionalbackgroundinformationonMaldenMills,seeRebeccaLeung,"TheMenschofMaldenMills,"60Minutes,CBS,July6,2003,http://www.
cbsnews.
com/stories/2003/07/03/60minutes/main561656.
shtml.
SeealsoGretchenMorgenson,"GECapitalvs.
theSmall-TownFolkHero,"NewYorkTimes,October24,2004,p.
BU5.
32.
MarianneJennings,"SeekCorporateBalance,"MiamiHerald,September1,2002,p11L.
33.
RogerMartin,"TheVirtueMatrix,"HarvardBusinessReview,Vol.
80,No.
3,March2002,pp.
68–75.
34.
MarianneJennings,"SeekCorporateBalance,"MiamiHerald,September1,2002,p.
11L.
24—STRATEGICCORPORATESOCIALRESPONSIBILITY35.
ManuelG.
Velasquez,BusinessEthics:ConceptsandCases,5thedition,PrenticeHall,2002,pp.
122–123.
36.
MitchellPacelle,"CanMr.
FeuersteinSaveHisBusinessOneLastTime"WallStreetJournal,May9,2003,pp.
A1andA6.
37.
Inspiteofemergingfrombankruptcyprotectionin2004,thefirmcontinuedtostruggleandfiledforbankruptcyagainin2007.
Today,thecompanycontinuestomakeitsclothingunderthebrandnamePolartec(http://www.
polartec.
com/).
38.
"JustGoodBusiness:ASpecialReportonCorporateSocialResponsibility,"TheEconomist,January19,2008,p.
3.
39.
CharlesHandy,"What'saBusinessFor"HarvardBusinessReview,December2002,p.
54.
40.
DesignThinking,"PeterSenge'sNecessaryRevolution,"BusinessWeek,June11,2008,http://www.
businessweek.
com/innovate/content/jun2008/id20080611_566195.
htm41.
WillHutton,"TheBodyPoliticLiesBleeding,"TheObserver,May13,2001,http://www.
guardian.
co.
uk/politics/2001/may/13/election2001.
uk642.
MichaelSkapinker,"HowtoFillthePhilanthropy-ShapedHole,"FinancialTimes,January27,2009,p.
13.
43.
ArchieB.
Carroll,"AThree-DimensionalConceptualModelofCorporatePerformance,"AcademyofManagementReview,Vol.
4,No.
4,1979,p.
500.
44.
EliotSpitzer,"StrongLawEnforcementIsGoodfortheEconomy,"WallStreetJournal,April5,2005,p.
A18.
45.
KeithDavisandRobertBlomstrom,BusinessandItsEnvironment,McGraw-Hill,1966.
SeealsoKeithDavis,"TheCaseforandAgainstBusinessAssumptionofSocialResponsibilities,"AcademyofManagementJournal,Vol.
16,Issue2,1973,pp.
312–322.
46.
AlanMurray,"TwelveAngryCEOs—TheIdealEnronJury,"WallStreetJournal,February15,2006,p.
A2.
47.
JonathanBirchall,"BusinessFightsforTougherRulesonEmissions,"FinancialTimes,November20,2008,p.
4.
48.
JohnReed,"GMJoins'Green'CoalitionintheUS,"FinancialTimes,May9,2007,p.
18.
49.
RussellGoldandIanTalley,"ExxonCEOAdvocatesEmissionsTax,"WallStreetJournal,January9,2009,p.
B3.
50.
Someofthemostimportantresearchinthebusinessmanagementliteratureontherelation-shipbetweenCSRandfirmperformanceisbeingdonebyJoshuaMargolisofHarvardBusinessSchool(seeJoshuaMargolisandJamesWalsh,"MiseryLovesCompanies:RethinkingSocialInitiativesbyBusiness,"AdministrativeScienceQuarterly,Vol.
48,IssueNo.
2,2003,pp.
268–305;JoshuaMargolis,HillaryElfenbein,andJamesWalsh,"DoesItPaytoBeGoodWhataMeta-analysisofCSPandCFPCan(andCannot)TellUs,"AcademyofManagementAnnualMeeting.
Philadelphia,PA,2007;andJoshuaMargolisandHillaryElfenbein,"DoWellbyDoingGoodDon'tCountonIt,"HarvardBusinessReview,Vol.
86,No.
1,2008,pp.
19–20).
Margolis'smainconclusionfromhisresearchisthat,whilethereislittleevidencethatCSRpredictsfirmperformance,theredoesseemtobeevidenceofthereverserelationship—firmperformancepredictingCSR.
Inotherwords,whileCSRdoesnotincreaseprofits,higherprofitsleadtogreaterCSR.
Oneexplanationforthisfail-uretoestablishaconclusivelinkbetweenCSRandfirmperformanceisthatthetoolswecurrentlyusetomeasureCSRarenotverygood.
Whiledataandmethodsareimprovingallthetime,weareyettoidentifyasufficientlycomprehensivemeansofestablishingafirm'sCSRprofile.
Intheabsenceofsuchameasure,continuingtoresearchwhetherornotsuchactivitieshavepositive(orneg-ative)correlationswithfirmperformance(creatingahugeblackboxintheprocess)seemsdifficulttojustify.
Margolis'sresponseistocallonresearcherstomovebeyondinvestigatingtherelationshipbetweenCSRandfirmperformance(orvice-versa)and,instead,focusonunderstandinghowandwhyfirmsdecidetoactinrelationtoCSR—"understandingthemechanismsthatconnectCFPtoCSP,ratherthanthereverse.
"Chapter1:WhatIsCSR—2551.
RitchieLowry,"CapitalismwithaConscience:AboutSociallyResponsibleInvesting,"http://www.
goodmoney.
com/qna.
htm52.
TaraKalwarski,"Numbers:Do-GoodInvestmentsAreHoldingupBetter,'BusinessWeek,July14and21,2008,p.
15.
53.
Ibid.
54.
AndrewLikierman,"StakeholderDreamsandShareholderRealities,"MasteringFinancialManagement,FinancialTimes,June16,2006,p.
10.
55.
CarlyFiorina,"AWorldofChange.
"QuotedfromaspeechtotheAPECCEOSummitinShanghai,China,October19,2001,http://www.
hp.
com/hpinfo/execteam/speeches/fiorina/apec_01.
html56.
ForamoredetaileddiscussionofthesetrendsthataredrivingtherelevanceofCSR,seeChapter5.
57.
"GlobalWarmingPutstheArcticonThinIce,"NaturalResourcesDefenseCouncil,November22,2005,http://www.
nrdc.
org/globalwarming/qthinice.
asp58.
"NewNASASatelliteSurveyRevealsDramaticArcticSeaIceThinning,"JetPropulsionLaboratory,NASA,July7,2009,http://www.
jpl.
nasa.
gov/news/news.
cfmrelease=2009–10759.
"ImagesFromtheExxonValdezOilSpill,"NationalOceanicandAtmosphericAdministration,March7,2001,http://response.
restoration.
noaa.
gov/photos/exxon/exxon.
html60.
"Farmers&ConsumersProtestatMonsanto'sHeadquartersinSt.
Louis,"OrganicConsumersAssociation,August19,2000,http://www.
organicconsumers.
org/corp/monprotest.
cfm61.
"CorporateCampaigns:CaseStudies,"http://www.
foe.
co.
uk/campaigns/economy/case_studies/index.
html,and"SuccessStories,"http://www.
foe.
co.
uk/campaigns/economy/success_stories/index.
html62.
ThomasL.
Friedman,"TheVirtualMosque,"NewYorkTimes,June17,2009,p.
A21.
63.
RobertA.
Guth,"SnifflySurfing:GoogleUnveilsFlu-BugTracker,"WallStreetJournal,November12,2008,pD1,http://sec.
online.
wsj.
com/article/SB122644309498518615.
html;MiguelHelft,"Aches,aSneeze,aGoogleSearch,"NewYorkTimes,November12,2008,p.
A1,http://www.
nytimes.
com/2008/11/12/technology/internet/12flu.
html64.
BurtHelm,"BestGlobalBrands,"BusinessWeek,September18,2008,http://www.
businessweek.
com/magazine/content/08_39/b4101052097769.
htm65.
MiltonFriedman,CapitalismandFreedom,UniversityofChicagoPress,1962,p.
133.
26—STRATEGICCORPORATESOCIALRESPONSIBILITY