Corporate Social Responsibility Part 2 – First objection to CSR
June 6th, 2008Corporate Social Responsibility 4 CommentsShould companies attempt to be socially responsible?
At first, this appears to be a moot point.
In modern times, no large company would dare dispute need for Corporate Social Responsibility (CSR). Governments, activists and the media and many others place companies under enormous pressure to act in a socially responsible manner.
Society demands and expects it. Companies are doing it.
For better or worse, CSR is here and here to stay.
The question nowadays is “not whether, but how” according to John Ruggie, from Harvard University’s Kennedy School of Government. (refer The Next Question, The Economist, Jan 19-25)
Common arguments against CSR
But before we look at how CSR should be done, I feel that it’s important to take a step back and first ask whether companies should try to be socially responsible at all.
There is no doubt in my mind that companies should strive to act in a responsible manner. However, those who object to CSR do raise some legitimate issues, and these are worth consideration.
Accordingly, in the next three posts, I will discuss three of the most common objections to CSR, namely:
• Social responsibility is the business of government, not companies;
• CSR is a distraction from ordinary business activities; and
• Companies should not give out of other people’s (shareholders) money or resources.
Today, I would like to discuss the first of these objections. The following two posts will deal with the second and third objections.
The first objection
The first objection asserts that the job of looking after the overall social good of societies is one for governments, not business.
Governments, elected by the people, should provide social services and look after the people and environment. Governments, not business, should decide what behavior is acceptable and make laws accordingly. Business should concentrate on maximizing financial returns to owners, and leave the needs of broader society to government.
I do not have much empathy for this argument.
Firstly, government regulations provide for a minimum standard of behavior only. Companies should seek to go above and beyond the minimum.
Secondly, government regulation is not always sufficient to meet the needs of the broader common good. This is the case particularly in third world or developing countries, where labor or environmental regulations are often weak and governments fail to provide adequately for the people.
In such cases, companies need to go above and beyond legal requirements.
Thirdly, the actions of a company affect a broad range of stakeholders. Decisions which companies make, particularly large companies, can have a major impact on the societies in which they operate.
This degree of impact gives a company power. With power comes responsibility.
Companies have the power to positively impact the societies in which they operate.
They also have the responsibility to do so where they reasonably can.
Over to you
What do you think? Should business leave social responsibility to the government?
Please feel free to share your thoughts and opinions by clicking on the ‘comments’ section above.
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