Daniel O'Connor | Integral Ventures, LLC
A recent survey in The Economist casts a rather skeptical eye on the growing movement for corporate social responsibility. The lead article, entitled The Good Company, begins by acknowledging that CSR has "won the battle of ideas" and then summarizes the survey's conclusions:
"Is CSR then mostly for show? It is hazardous to generalise, because CSR takes many different forms and is driven by many different motives. But the short answer must be yes: for most companies, CSR does not go very deep. There are many interesting exceptions—companies that have modelled themselves in ways different from the norm; quite often, particular practices that work well enough in business terms to be genuinely embraced; charitable endeavours that happen to be doing real good, and on a meaningful scale. But for most conventionally organised public companies—which means almost all of the big ones—CSR is little more than a cosmetic treatment. The human face that CSR applies to capitalism goes on each morning, gets increasingly smeared by day and washes off at night."
Nevertheless, according to the author, there is no reason for concern because:
"Capitalism does not need the fundamental reform that many CSR advocates wish for. If CSR really were altering the bones behind the face of capitalism—sawing its jaws, removing its teeth and reducing its bite—that would be bad: not just for the owners of capital, who collect the company's profits, but, as this survey will argue, also for society at large. Better that CSR be undertaken as a cosmetic exercise than as serious surgery to fix what doesn't need fixing."
However, the author seems to have contradicted himself. If CSR really has won the battle of ideas, as the author claims, then systemic reform of capitalism consistent with the CSR agenda would be inevitable, for better or worse. In fact, if CSR had won the battle of ideas, we wouldn't even be talking about it anymore. It would have become part of the business-as-usual being taught in graduate business schools around the world... part of the body of knowledge that is generally accepted as a prerequisite for business leadership.
Clearly it has not (yet?) won the battle of ideas.
Why?
In my opinion, the advocates of CSR haven't done enough to establish an economic justification for CSR--one that can withstand the critique of skeptics like those at The Economist. Until CSR advocates answer the charge that CSR is incongruent with or antithetical to capitalism, CSR skeptics like The Economist will carry the debate.
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See Also:
- CSR: Just Good Business?
- In Defense of CSR?
- CSR's Grim Reaper
- The Dismal Science of Business Ethics
- Stockholders: The New Special Interest Group
- Who Governs the Corporation?
- CSR and Stockholder Value
