Does it matter that you make a buck

The Robin Hood hound.

Image via Wikipedia

It seems that there is this idea floating around that CSR should be none-for-profit endeavor. I see many stories about how CSR is changing capitalism and redefining the world of business. These stories normally originate from people who genuinely believe that business is a fundamental evil concept and it is the task of the good (normally themselves) to try to reduce its ill effects.

It seems like that the quote from Drucker, 1984 is becoming a truth in itself that “The Social Responsibility of business is to tame the dragon, that is, to turn a social problem into economic, opportunities and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.”

While it is not explicitly said so there seem to be an inner conflict between being ethical and doing business. Somehow one cannot be good and at the same time make money.

To some extend it’s been businesses own fault that they have gotten such a poor reputation on their ethics record. People like Friedman who so famously claimed that “few trends (CSR) could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their shareholders as possible.” The statement did not make the matter any better and for many (if not most) business people this is still thought as a universal true statement even though that time have proven them wrong in several instances.

However, time has shown that even the most hardened businessman becomes mellow when he is faced with the wrath of public opinion. Just look at BP (Oil spill), Shell (Brent Spar (I know its old but the case does deserve a place in the hall of fame), Apple (Labour rights), etc. But even though that many businesses have learned the Darwinian way forward in business ethics why is it that the small of money is still tainted with the blood of the innocent victims of capitalism. There are two sides to this story the NGO/CSO as the good guys and the business world that continue to have a self-image as being evil.

NGO and CSO professionals have a self-image of themselves as being the good guys/girls. Somehow it has become an unspoken truth that even though NGO comes with the most fare out proposals they are acting on the behalf of goodness. For example is there a NGO that have proposed a tax on all international stock trades. In essence this means that all who buy or sell stock would be taxed a certain percentage of the total amount in what they call a Robin Hood tax. The idea is that the ones that created the world economic disaster are also the ones that pay. So what will this mean? Well, it means you and I will be taxed even more. The majority of transactions are done by big institutional funds that try to the best of their ability to manage our pensions. An additional tax will mean that everybody gets less money when we retire. So instead of being a Robin Hood tax it really is an extra tax on regular hardworking people.

Furthermore such a proposal will have to cover the entire world across political, national, ethnic and religious boundaries. We can’t have countries that do not enforce a tax on transaction but we will need a worldwide tax service that will make sure that money is paid. Who is going to enforce such a police force? The US or China? Or maybe Saudi Arabia? So what the NGO propose is that we just tax the rich countries. Well who are they? Is china included? The biggest economy in the world or what about Brazil or Russia? What about Venezuela who have a huge oil economy but keep its people in poverty should they tax investments?

But because the NGO is by definition good they are not proclaimed as fools but rather as idealists. Another side of the story is the tendency of business to place NGOs on a pedestal as the incarnation of, naivety yes, but as the carriers of the “good” message. It still amazes me what business people put up with when confronted with a negative NGO. They are almost seem embarrassed that they are actually able to make a profit in their endeavors including their work on CSR. Personally I believe it is too many communication experts that guide business leaders to take all the abuse without taking the time to actually checking the facts. One of the golden rules of crisis communication is that if you want a negative story to go away you lay down as fast as possible if you keep on fighting the story will just continue to haunt you. So many business leaders take this advice and just lay flat on the ground and let unfounded accusations become universal truths.

My advice to business is STOP and THINK before you just take the hits, and when you have checked your facts then make sure that it comes out. When you know all there is to know about your business (and you know more than anybody else) then you confront your accuser live and so that you can set the record straight (of cause if you are a total fool this is properly not the best of advices I can give). I’m sure that any negative NGO that is coming after you will crumble when confronted with the depth of information that you can present.

Business should not be embarrassed that it makes money of its social responsibility efforts it is merely the logic of capitalism. You should actually be proud that you are able to be good and at the same time do well. So all you business people out there keep up the good job! and if you happen to be one of those evil capitalist who only want to exploit the world and its people all of this did not apply to you. :o)


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