Heath and Ni offer their reactions to comments by Robert B. Reich (Goldman School of Public Policy, University of California, Berkeley) in his paper, “The Case Against Corporate Responsibility.”
In a long and thoughtful statement on CSR, Robert B. Reich noted that the topic is widely taught and discussed in business schools. It is a top of the list topic recruiters look for when interviewing job candidates. He even notes the continuing effort by “social auditors” to measure progress and success in achieving higher CSR standards. And, he observed that NGO’s and their websites often feature standards of CSR as part of their ongoing dialogue about ways to improve (make more socially responsible) business activities. The theme of his work: In the context of his discussion of “supercapitalism,” he advocates that CSR standards and performance claims often serve as a smokescreen and may even divert attention from needed legislation and regulation. This outcome results from the culture of supercapitalism which implies resisting any change or standard that hurts the bottom line. As he concluded: “The soothing promise of responsibility can deflect public attention from the need for stricter laws and regulations or convince the public that there’s no real problem to begin with.”
This statement, although coming close to condemning CSR as a respectable and useful topic and project, confirms themes that we advance in our entry. CSR is one of the pillars of issues management, and one- if not the major- focus of NGO/activist public (and even interindustry/intraindustry) tug of wars. Failing of businesses and industries to meet expected standards of CSR held by key publics motivates their issues initiatives: The rationale for calls for increased regulation and legislation. Thus, the challenge is to be more proactive than reactive. In this discussion, we agree with Reich that CSR being used to screen or mask responsibility rather than advance it is “as meaningful as cotton candy.”
Thus, when skeptics of CSR efforts ask, “Can you demonstrate that CSR increases profits rather than harms them,” others (equally skeptical) tend to reason that efforts to define, achieve, and communicate such standards can actually undermine the societal usefulness of the efforts because they are ingenuous.
One of the central themes is who sets the standards (and even then who measures or assesses strategic management efforts to implement them in ways that balance profitability and social responsibility. This is the fulcrum.
Reich sees as the tilting point exactly the tension of CSR: How can a company be “good” and attract while not losing investors. He believes that all among all stakeholders the willingness of investors to grant or withhold their investment dollars skews the balance so that profit (masked behind claims sometimes made in glossy print and Web CSR statements) is always the trump card: “”The elusive promise of corporate democracy is illusory,” he concluded.
Similar claims are made about consumers who say that CSR performance is vital to their choice in products, services, and companies. He offers data that suggests consumers think of CSR in this regard in selfish terms (honoring warranties and producing high-quality products and services) rather that in more altruistic societal terms (such as energy reduction, carbon reduction, strategic philanthropy, and such).
If regulators and legislators don’t want policy that hurts business (as was the case during the George Bush administration), and if investors want profits and consumers define CSR narrowly rather than societally, is it a viable topic for management and public relations? As Reich concluded: “The first step in turning democracy and capitalism right side up is to understand what’s really happening.” That is one aspect of the CSR contribution to the EKP. Another is to seek ways ethically and strategically that advance rather than mask CSR as truly being socially responsible.
