From irresponsible to responsible

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From irresponsible to responsible?

• Associate Professor Sharyn Rundle-Thiele

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Our recent past

• 16 years of economic growth
• Prosperous times
• Many stories of success, fewer stories of failure

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Our present

• Financial market meltdown
• Global recession job losses, mortgage
  foreclosures, consumer confidence down

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Our future?
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Understanding the modern firm is necessary
(Clarke et al. 2006)
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The modern firm

• Consists of many disciplines
• Operates in a global village
• And an environment of diminishing resources

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Business thinking needs to evolve

• Traditional ideology based Friedman (1962) -
  firms exist to make a profit
• There are better ways to conduct business
• Business schools should take the lead
• We need to educate such that in future ALL
  businesses seek to make societies better off

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The past CSR

• Concerned with societal obligations (nature and
  scope unclear)
• Obligation to minimise negative impacts
• Obligation to maximise positive impacts

Stakeholders including affected communities
Companies
Responsible to
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The responsibility dilemma

• Companies should be responsible
• Make a profit, obey the law, be ethical and
  philanthropic
• To make profit companies have to sell more or
  gain efficiencies
• To sell more people need to buy more

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Says.
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Yet..

• Customer satisfaction with the Big 4 Australian
  banks is high and increasing
• Australians have some of the highest banking fees
  in the world
• Australian banks are continuing to report record
  profits

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Fosters

• The promotion of responsible alcohol consumption
  is central to the way we market, promote and sell
  our products.

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Yet.

• The proportion of Australian adults drinking at
  risky levels has increased from 8 in 1995 to 16
  today.
• Alcohol abuse costs the Australian community 15
  billion per annum

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Is CSR

• Window dressing?
• Lip Service?

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Is CSR enough?
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Time to raise the bar
OUT (CSR) IN (CSP) Corporate
Corporate Social
Social Responsibility Performance
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. to corporate social performance (CSP)

• Under the new ideology CSR ratings based on
  initiatives introduced would no longer be
  sufficient.
• Under CSP organizations would be judged on the
  effectiveness (e.g. social gain, positive
  impacts, reduction of negative impacts) of the
  CSR initiatives.

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Corporate social performance
Evaluate effectiveness of policies and programs
Shareholders Affected communities Consumers
Companies
Responsible to
Revise policies and programs to improve social
performance
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Case in point

• Alcohol Knowledge

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Question 1

• How many standard drinks are in this bottle of
  wine?

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Question 2

• How many standard drinks are in this bottle of
  beer?

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Question 3

• How many standard drinks are in a 30ml nip of
  spirits?

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Australians agree
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Australians disagree
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Knowledge about standard drinks
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Knowledge about male drinking
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Knowledge about female drinking
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Alcohol Knowledge
One quarter not sufficiently informed
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Conclusions

• Companies are promoting responsible consumption
• But
• Australians are not adequately informed and dont
  know what responsible is