CSR and Development Corporation meets

Can development and CSR really meet or are they at odds no matter what you do? I have met many people from the development world who are really aggressive towards CSR and just about everything it stands for. And while I will be the first to admit that CSR is far from a perfect approach for business towards its social responsibilities it is just about the best guess out there on how its done.

So why all this hostility and aggressiveness towards business having a social responsibility, is it not what we all want that business take on more of the social burden that governments cant handle by their own?

Here are some common denominators on what people in development think is wrong with CSR.

  1. It is a branding and communication exercise that has nothing to do with social responsibility.

Well it is true that a lot of companies are actively communicating their CSR activities and that for some of the major companies CSR has become part of the image that we have of the company. For one I think the Abraham Lincoln (attributed) quote “You can fool all the people some of the time and some of the people all the time but you cannot fool all the people all the time” rings true. All communication people know that you can’t lie forever and the same goes for corporate communication. If there were no hint of truth to in the brand it would at some point be exposed as a fake.

  1. It is only exercised to reduce the risk of bad PR.

There is a strong risk element in CSR because it is the only business approach that has some success in confronting social risk. Actually risk management have been one of the primary “business cases” for CSR. But risk is not limited to PR alone it can be many different things that has nothing to do with creating a good or bad image of the organisation. Proper risk management take a holistic approach to the organisation and so does CSR. With this approach on gets an insight into operations of the state, which under normal circumstances would be left out or marginalised.

  1. It is seen as a neoliberal project that is out to exploit the developing world

There seem to be the perception that business somehow has feelings that guide them to do evil. But as far as I know there is no evidence that companies in themselves are either good or evil, they are as far as I know just companies working in a market. But with the market there are structures and mechanisms that can be harmful. The companies might or might not be aware that their actions have a counterproductive result or even harm people who are in contact with its operations. CSR is an effort to confront some of theses impacts in a constructive and systematic way rather than tackling them one by one as they arise.

  1. It will be gone in three years.

The same thing was said three years ago and CSR is still around. In the years I have been involved in CSR there have been shifts in focus from reporting, to communication to governance. At some point either one have been the prevailing issues that have been talked about. I’m convinced that CSR will be around for many years to come because it works from the basic principle that organisations have a responsibility towards its stakeholders. This basic premise have been true always and that we call it CSR is more a construction of the time we live in rather than a shift in basic assumptions about business and society.

I hope and think that CSR professionals and development people can meet on common ground and that the two have something to learn from each other. But there is a strong need to confront some of the stereotypical assumptions about how business operates and how development people think.

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7 Issues that CSR needs to address if it is to be accepted by the mainstream business community

There are some hard questions that CSR needs to give real answers to in the coming years. As time goes it is become harder and harder to change any poor practices which are already becoming embedded in governance processes around the world.

  1. There is a lack of definition of CSR. We can’t measure what we cant define and CSR is not a exception in the past I have touched upon this issue as every year seem to come up with a new way of defining CSR normally because some new interest group have tried to make their mark.
  2. CSR have rapidly become another part of the ever-growing Public Relations industry. As CSR is a none-definable concept is has become the task of the communication specialists to come up with answers to questions raised be the corporate stakeholders. If we are to develop CSR in any meaningful context both in the terms of business development and in relation to sustainability in a wider context we need to focus on the activities of CSR rather than the branding of an organisation or product to a very narrow stakeholder group.
  3. Thanks to Porter and Kramer CSR is by many business people being synonymous with strategic philanthropy. Basically giving money away in the belief that in the long term they will return to the company in the form of customers and increased sales. With this very narrow view of the concept is it of cause to activate the whole Business-to-Business part of business. Because there is no real incentive for engagement in strategic philanthropy when you do not have any involvement with “real” customers.
  4. CSR needs to address the neoliberal argument that CSR is “giving the owners money away” if it is to gain any real footing in a broader sense. In many ways this is already happening as the concept have teamed up with ethics and corporate governance, strongly supported by several high-profile corporate scandals, which have highlighted the need for better governance. If CSR is to succeed it need to outlive it-self. This might seem an odd thing to say but if companies and organisations are going to be truly socially responsible they need not to think about whether a decision is good or bad in the context of social or ethical ground but it as to be part of how the organisations DNA. How it thinks, believe and communicate about and to all its stakeholders.
  5. CSR needs to be though in a global context and not just something for that is part of the developing world. In more and more cases CSR is being used as means to keep developing countries out of developed countries economies. As trade-barriers are being lowered on a global scale new forms of barriers are being raised in the form of standards and systems, which companies and not the countries have to abide by. This forms a second semi-legal layer, which is hard to enforce by any objective party and even harder to efficiently to govern. This is a form of governmentality, which is outside the normal control of individual governments, but is superimposed on countries economics by multinational corporations in the effort to live up to some ethical guidelines they themselves have invented. While e might argue that in part of the world there are weak governments were corporations needs to impose rules, which are above local law it is a dangerous path which the professionals and academics of working in the field needs to address.
  6. The issue ever elusive Business case for CSR also needs to be confronted. In my experience and I believe that this is also shown in scientific surveys is something profitable because business wants it to be so. Just having a webpage and a annual report that describes a series of activities is just not good enough. If managers want to make a profit of their CSR activities they need to focus on the things that matter. How do one think that telecommunication for bottom of the pyramid customers became a reality or the widespread acceptance of the business model of microfinance came to be? It is because it was directly linked to a clear need and ability of the company to do well by doing good and not some philanthropic endeavour which was more or less linked to the core business. If a company wants to make CSR profitable it need to use it resources to make it so and not leave it to the Marketing, Human Resource or Communication department to construct a more or less proven business case.
  7. Law or self-regulation? Is rapidly becoming a concern that both companies and the governments need to address. Should be let companies become so powerful that they can dictate democratic governments way of governing their countries or should we let intergovernmental institutions like the UN, EU or OECD decide? And can these institutions even enforce any legislation they might come up with? These are central issues, which will require some careful thinking. On one side we are unable to effectively govern social, environmental and governance issues on a global scale on the other side we are reluctant to just leave it to capitalism and a neoliberal dogma to solve things out. Some institutional proponents argue that we should have interstate regulations on these central issues of corporate governance. Maybe even a global tax system, but it would seem to be just another layer of inefficiency, which is both bureaucracy and unmanageable.