This week’s readings about the emergence of Corporate Social Responsibility (CSR) were incredibly insightful. Not only did the readings discuss the many defining characteristics of CSR, but they also explained an organization’s reasoning and method for initiating it. I read an article aptly titled Corporate Social Responsibility by Lindgreen & Swaen to compare, contrast, and draw connections between this week’s readings. Lindgreen & Swaen do not firmly believe in CSR, nor do they fully dislike its composition either. Their research includes the positive and negative aspects of CSR. Personally, I think CSR is absolutely imperative for an organization’s image. An organization, which is viewed in a positive manner, has the upper hand and trust of the public.
Yet, an organization’s motivation for conducting CSR can be questioned as a deceptive ploy to win the hearts of consumers and the public. Is every attempt at CSR necessarily a lie? No, according to Lindgreen & Swaen (2010), “many consider it necessary for organizations to define their roles in society and apply social and ethical standards to their businesses” (p. 1). This week’s articles about Enron shine an even brighter light on the culpability of an organization. Organizations need not only worry about themselves. High earning organizations must participate in giving back, if you will.
Giving back to one’s community is noble. Additionally, giving back to one’s community also builds the organization’s morale. According to the reading in The Economist, CSR is an internal managerial morale builder because its employees are enthused to be a part of an organization with values (Franklin, 2008). Lindgreen & Swaen agree with those sentiments and state that overall performance is raised and stakeholders respond exceptionally well (2010). Communications between management and its stakeholders is key and, thusly, CSR is imperative. CSR is about communicating your self-worth, not your net-worth. Allen’s (2002) focus on “Enronitis” casted a discerning shadow over Enron and similar organizations that could not see past their own hubris (p. 206).
Enron, so badly, wanted to be the “It Girl” (McLean, 2001, p.1) that it was willing to do anything possible to be the topic of conversation on Wall Street every morning, noon, and night. Lindgreen & Swaen’s work suggests that if Enron had CSR in place, the organization could have improved its image (2010). Saying that Enron could have improved its image is a stretch because it was so far gone for many years, but if the organization had implemented CSR from its conception, then it could have become an entirely different company. One could make the case that Enron’s destruction birthed a new CSR standard amongst organizations in the 21st Century.
Further, Lindgreen & Swaen agree with The Economist’s three layers of CSR. They, too, acknowledge Michael Porter and Mark Kramer’s paper about CSR in the Harvard Business Review. However, Lindgreen & Swaen (2010) noted that Porter and Kramer’s wrote about the uncertainty of CSR actually working in an organization due to the lack of theoretical support (Porter & Kramer, 2006). Lindgreen & Swaen further stated that CSR can be portrayed as a radical development and that it could disrupt an organization’s climate and culture (2010). Nevertheless, Lindgreen & Swaen also agree with Porter & Kramer because CSR helps organizations differentiate themselves from competitors by using non-economical factors, which also lead to driving corporate, consumer, and employee interest (2010). If CSR is communicated in the wrong way, a backlash from stakeholders could occur. Therefore, Lindgreen & Swaen (2010) affirm the belief that CSR is not always a good thing to implement into an organization (p. 3).
References
Allen, C. E. (2002). Building mountains in a flat landscape: investor relations in the post Enron era. Corporate Communications: An International Journal, 7(4), 206-211.
Franklin, D. (2008, January 17) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist. Retrieved from http://www.economist.com/node/10491077
Lindgreen, A. & Swaen, V. (2010). Corporate Social Responsibility. International Journal of Management Reviews, 12(1), 1–7.
McLean, B., (2006, January 19). Is Enron Overpriced? Retrieved from http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm
Porter, M.E. & Kramer, M.R. (2006). Strategy and society: the link between competitive advantage and corporate social responsibility. Harvard Business Review. Retrieved from http://efcsrconsulting.com/documents/events/ccc2008/Mark-Kramer-
Keynote/Strategy-Society.PDF
Nice post, Thomas. In the Economist reading, a person was quoted as saying that the social responsibility of a business is to increase profits. Although your post is mainly a counterpoint to that argument, do you see it as having any merit?
ReplyDeleteLike you said, I don't think Enron would have survived even if it had added an element of CSR to its business practices. Perhaps it would have survived if the company (and its leaders) had different values and and CSR was an outcome of those values, but it is difficult to speculate on that end.
You say Lindgreen and Swaren (2010) note that CSR helps organizations differentiate themselves from competitors. As CSR becomes more mainstream, do you think this will remain the case?
Nicely done, Thomas. I think CSR in a company is so important. It not only benefits the areas where your employees live and work, but it also gets your employees doing something together. During our annual Habitat for Humanity build, for example, you are working with people you wouldn't normally have an opportunity or reason to even say hello to. But after you put up that first wall together, or help each other with painting, or hand shingles to the people up on the roof, you start to build a bond and connection. I think the engagement side is one more really important aspect of CSR.
ReplyDeleteThomas, I like that you picked up on a different angle of CSR - that it can be really good for an organization, but there may be elements of risk, too. I was browsing online and came across an blog about the importance of CSR how companies have overcome their PR woes with CSR - it mentions Wal-Mart, Hershey and Nike. Interestingly, the blog also poses the question: what happens when company's have a CSR slip-up? For example, what if the CEO of a company with a good CSR rep does something personally that contradicts the CSR message. This reminded me of your post; I guess there could be several risks to public CSR campaigns.
ReplyDeleteCourtney, thanks for your comment. I do think CSR has the ability to increase profits. When an organization shows and proves that they care, consumers become attracted to them more. As a result, consumers will stick with that organization. However, I do not think it is PC to say that your own organization is using CSR to make a profit because then that organization is essentially using/duping the consumer.
ReplyDeleteAs CSR becomes more mainstream, organizations who utilize CSR will always standout from those who do not.
Lauren, thanks for your comment. I commend you for your Habitat for Humanity work. That's awesome! Engagement is definitely important and I couldn't agree more.
Marissa, thanks for your comment. Organizations should definitely be careful with the angle they take while incorporating CSR. A publicly correct campaign is generally best. In order to avoid offending a broad public, it's best to give back to your local community in a dynamic way.