It is widely accepted that corporate social responsibility (CSR) and good governance are now vital ingredients in contemporary business structures. It is near impossible to find a global company that has no CSR strategy whatsoever.
Without some form of CSR, even if it is just in the charity or philanthropic sense, a company will not be held in high regard amongst the conscious consumers in today’s socially aware times and not be awarded its ‘social license to operate’. Given it tends to be voluntary and self-regulated there is, however, no specific shape or form that CSR needs to take and companies are left to implement in a way that they feel is relevant for their specific stakeholders. But is this always a good thing? Whilst there may be good intentions behind their actions, are they the correct ones to take? Do some companies do more harm than good as a result of their CSR?
In a study undertaken in 2013 (reported in the book License to Ill: The Effects of Corporate Social Responsibility and CEO Moral Identity on Corporate Social Irresponsibility), Ormiston and Wong found that companies that were openly committed and focused on pursuing a socially responsible agenda, tend to be more inclined compared to other companies, to act in a socially irresponsible ways. They argue that being good or simply talking about being good leads many individuals to subsequently be bad. Based on the situations they analysed, they concluded that CSR is actually a bad thing, resulting in more irresponsible behavior.
Another complicated situation in terms of questionable CSR is when companies are controversial by their very nature. If you look at alcohol, tobacco and arms and ammunition production firms for example, they all have robust and public CSR strategies. Some have a profit commitment to charity or percentage of turnover commitment to CSR – but by them striving towards higher profits and turnover they are causing more harm than good on a global scale and perhaps they feel it is justified if they have a CSR or charity commitment. Would it be right for a tobacco company to donate to a lung cancer charity or an ammunition company to donate to a war orphans charity? Many critics argue that CSR is irrelevant if the actual business operations have inherent negative implications or are dishonest.
Some activist groups have gone so far as to start entire websites (such as www.anticsr.com) who provide a critical look at the concept of CSR – suggesting that it does more harm than good as a philosophy and that it is just a fad. Some more insights into CSR not always being a good thing can be found on there.
Of course there are numerous great examples where a positive impact has been made but successful implementation of CSR and good governance in a global context has its challenges and issues. As part of our Summer School Course, Global Issues of Corporate Social Responsibility and Governance, we will dive deeper into these controversial issues and look at some perspectives that are not often presented in the mainstream. In this course, students will explore the emergence and changing role of corporate responsibility as a market governance mechanism, as well as its influence on and positioning in current corporate strategy.
Kenneth Amaeshi is the Director of the Sustainable Business Initiative (SBI). Global Issues of Corporate Social Responsibility and Governance evaluates and challenges the different conceptions of corporate responsibility and governance in diverse institutional and geographical contexts. Find out more by watching our video.
Image credit: www.anticsr.com