Abstract
Reviewed by: Thomas Clarke, University of Technology Sydney, Australia
The many approaches to corporate social responsibility
Corporate social responsibility (CSR) is a young subject with a surprising recent development in both contemporary business policy and practice and in the policy and standards work of international agencies including the United Nations (UN), World Bank, and International Labour Organization (ILO). There are many different interpretations: of CSR as well as accompanying language and tools of implementation:
For some, CSR is a misguided attempt to divert money that should go to shareholders. For others, CSR is a smokescreen behind which large multinational corporations (MNCs) can maintain discredited and unsustainable business models while appearing responsible to the outside world. More optimistically, for others CSR represents a genuine opportunity to help leverage millions of people out of poverty in the world’s poorest countries.
The editors cover their bets: ‘Ultimately, corporations may do good, or harm, or perhaps even very little, when they practice CSR’ (p. 1).
Explaining the paradox that it is industries and businesses that are often considered the most irresponsible and damaging to people and the environment that have often apparently been at the forefront of the CSR movement, the editors argue: Corporations are clearly taking up this challenge. This began with ‘the usual suspects’ such as companies in the oil, chemical and tobacco industries. As a result of media pressure, major disasters, and sometimes government regulation, these companies realised that propping up oppressive regimes, being implicated in human rights violations, polluting the environment, or misinforming and deliberately harming their customers, just to give a few examples, were practices that had to be reconsidered if they wanted to survive and prosper.
As the editors state, some of the central ideas of CSR have been relevant business issues (and sites of labour struggle) since the Industrial Revolution. The provision of decent working conditions, health care and housing has been fundamental to civilising modern society. Also, even at the time of laissez-faire capitalism, business magnates stretched out the hand of corporate philanthropy.
Yet in the contemporary CSR movement we are witnessing something more – a greater coherence in corporate CSR policies, programmes and practices which are more professionally and comprehensively addressed. The question is whether this is all profile building, or does it represent a real effort on the part of corporations to endorse their licence to operate? CSR has certainly become a movement with international standards, auditors and certifiers working at harmonising approaches, and building synergies across industries.
This volume is an authoritative effort to interpret the now vast literature on CSR into some accessible framework. With wit and skill the editors negotiate a path through definitional disputes. They conclude that it is almost impossible to define precisely what CSR is, as the definition is highly contested, and there are many contrasting approaches to CSR loosely gathered under the same conceptual roof.
Some core characteristics of CSR are recognisable:
that CSR is largely voluntary, though enabling legislation is developing widely; CSR involves internalizing or managing externalities which are the negative impacts of business often born in the past by others; CSR recognises the interests of a range of stakeholders other than shareholders, and accepts a degree of responsibility towards these; while going beyond a narrow focus on shareholders and profitability, many approaches to CSR see it as a form of enlightened self-interest where economic goals can be served by recognising wider responsibilities; CSR has normally a set of values underpinning the practices, though these may vary markedly; CSR is generally considered to go beyond corporate philanthropy, examining at least in a preliminary way how the core business functions impact on society.
As the editors conclude, ‘The way in which CSR is understood, practiced, and institutionalised in a global context is ever-changing and open to substantially different interpretations’ (p. 22).
The integrity of CSR: The case for and against
Despite the recent burst of enthusiasm for corporate social and environmental responsibility in some quarters of the business community, the concept and practice still provokes a degree of understandable scepticism.
There are many reasons why companies may choose to behave more responsibly in the absence of legal requirements to do so, including strategic, defensive, altruistic or public spirited motivations. However, there are important limits to the market for virtue according to some commentators. There is a place in the market economy for responsible firms. But there is also a large place for their less responsible competitors … Precisely because CSR is voluntary and market-driven, companies will engage in CSR only to the extent that it makes business sense for them to do. Civil regulation has proven capable of forcing some companies to internalize some of the negative externalities associated with some of their economic activities. But CSR can reduce only some market failures. (Vogel, 2005: 4).
In conclusion, the editors offer a pragmatic assessment of the balance sheet of CSR, arguing that in key practical fields of corporate activity – the marketplace, workplace, community and the ecology – CSR has enjoyed a broad uptake and application by companies.
Optimistically, the editors look to moving beyond CSR to the creation of social value as a goal in social entrepreneurship and innovation as a new and persuasive business model in a troubled and resource constrained world, moving beyond corporate financial performance to corporate social performance. We shall see.