Corporate social responsibility: Still a radical concept?

In a speech given to the Business Vocation Conference in Chicago some time ago, former president of Manufacturers Hanover Corporation Thomas S. Johnson raised the question, “Is there not a higher calling for those of us who have leadership positions in business to see the workday as an opportunity to help our fellow human beings in their journey?”

Since then, there have been many fora and conferences on business ethics and corporate social responsibility (CSR) with two distinct recurring themes. One theme at one such gathering was the responsibility of business to alleviate poverty. Br. Louis de Thomasis FSC, then president of St. Mary’s University of Minnesota, eloquently said at a national conference on CSR: “…there is no greater emphasis or force that has evolved over the thousands of years of Judeo-Christian faith than Jesus’ call to ‘preach good news to the poor, liberty to captives… and to set the downtrodden free.’ Poignantly, the exhortation reaches its most enrapturing grasp on our spiritual imaginations when Pope John Paul II, in Novo Millenio Inuente, described this fundamental value as Christianity’s preferential option for the poor and vulnerable. In other words, economics must serve people, not the other way around.”

In that same conference, Pope John Paul II was again referred to by economist Dr. Bernardo Villegas. He quotes from the pope’s speech on the mission of business before 800 bank executives: “Profits should not be the sole or principal motive for business or commercial activity. Social activity must keep in mind the human factors and is subordinated to the moral exigencies prior to all human action. Business must be genuine communities of persons who seek the satisfaction of their economic interests in the framework of the postulates of justice and solidarity of responsible and constructive work, fostering genuine and sincere human relations and placing themselves at the service of society.”

The second recurring theme was the issue of whether the marketplace rewards or at least recognizes companies which practice CSR. A study by Professor Louie Divinagracia utilized several statistical analytical tools. The results of the research showed that a company’s stakeholders will have a genuine and deeper appreciation of a company’s corporate societal marketing (CSM) programs if their level of support for such programs is strong.

Divinagracia, recognized as an agribusiness and marketing guru, recommended that companies should strive to make such CSM programs clearly known to and understood by their target markets and stakeholders.

The term CSR appears to be a common and popular one these days and yet, seems misunderstood. Here are some definitions worth a second look today.

• Continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. (World Business Council for Sustainable Development)

• Voluntary positive initiatives by business that look to go beyond legal compliance in a diverse range of social, economic and environmental areas. (International Organization of Employers)

• Treatment of the stakeholders of the firm ethically or in a socially responsible manner. Stakeholders exist both within and outside. Consequently, behaving socially responsibly will increase the human development of stakeholders both within and outside the corporation. (Michael Hopkins, A Planetary Bargain: CSR Comes of Age)

• Corporate management of business processes to produce an overall positive impact on society. (Mallen Baker)

In the real world of business and in the writings of management gurus, it is the task of the strategic manager to anticipate changes in the different macro environmental segments – economic, political, social, technological, institutional and ecological. Management must then change the internal environment of the company in order to prepare it to either cope with or exploit these potential changes in the external environment.

In other words, it is the responsibility of business to adapt to a changing macro environment. In business classes, students are taught the classical framework popularized by Michael Porter and all strategic management books that the basis of strategy are threats and opportunities to the industry, together with the strengths and weaknesses of the company.

If CSR is to be taken seriously, then strategic managers have the responsibility to make sure that business firms transcend or go beyond merely adapting to the environment. It is, in fact, their responsibility to become Agents of Change in the macro environment.

In truth, CSR becomes an additional basis of strategy, a revolutionary concept decades ago. Is it still considered so radical today?

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