Does Corporate Social Responsibility rest on a mistake

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Does Corporate Social Responsibility rest on a
mistake?

• Dr Paul Griseri
• Middlesex University Business School

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The aim of this lecture

• To critique Corporate Social Responsibility (CSR)
  on the basis that it mistakenly attributes moral
  values to institutions

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Key steps in the argument

• Corporate Social Responsibility (CSR)
  distinguished from Business Ethics (BE)
• Trend of studies in this area to treat CSR
  independently of BE
• BE addresses moral values in relation to
  individual people (correctly)
• CSR only gains plausibility when the
  organisation is seen in metaphorical not literal
  terms

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Definitions

• BE - the application of philosophical and
  social-psychological concepts to business
  dilemmas and practices
• CSR - the study of business strategy in relation
  to the firms impact on and contribution to
  society as a whole

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Are these two different disciplines?

• BE - origins in behavioural and philosophical
  studies more individually focussed
• CSR - origins in strategic management theory
  more firm-wide focus
• BUT .
• Both fields require an understanding and
  acceptance of social/moral values, and apply
  these to business situations

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Key assumptions behind BE and CSR

• universal applicability of values
• market basis to economy
• social model of the firm
• Idea of a responsible action

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General criticisms of BE and CSR

• Ethics - assumptions
• CSR in the face of globalisation
• Limitations of market theory

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Assumptions of philosophical theories of ethics

• That there is an underpinning common stock of
  value judgements
• Foundationalism - the idea that this stock is
  explained by reference to a set of statements or
  a basic model
• BUT -
• Variations in values at individual and collective
  levels
• Failure to find a single model or principle that
  explains all value judgements

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Globalisation - the reality

• Macdonaldisation or US imperialism in soft
  focus
• Fully functioning capitalism as the aspiration of
  most developing nations
• Social dumping - the choice of the weaker economy

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Limitations to markets

• Larger corporations dont want free markets
• Relative balance of power between major global
  firms and governments
• Government intervention

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Is CSR necessary?

• The social responsibility of business is to
  increase its profits
• Milton Friedman (1970), economist
• Not anti-society, but locates responsibility as a
  governmental and individual area, NOT a corporate
  one

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Key concepts of CSR

• Stakeholder Theory
• Sustainability
• Corporate social performance
• Corporate citizenship

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Characteristic phenomena handled in CSR
discussions

• Corporate giving/philanthropy
• Human rights abuses
• Pollution
• Poverty

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Characteristic phenomena handled in BE discussions

• Bribery and corruption
• Corporate Governance
• Integrity and trust
• Honesty
• Whistleblowing

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Are corporations different?

• Models of organisation -
• A machine or black box
• A legal person
• A little nation

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The idea of an action

• A co-ordination of beliefs and needs/wants which
  define the arena for acting and its purposes
• A process of deliberation carried out by the
  agent, potentially in consultation with others
• A choice - identifiable with some form of assent
  by an agent
• A series of movements that comprise the material
  embodiment of the action
• A commitment to being identified as the cause of
  the consequences of the act

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co-ordination of beliefs and needs/wants

• Idea of a single summation of needs or wants
• In practice choices arise out of a compromise
  between different competing interests

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process of deliberation

• Wide variations between corporations in how
  decisions are made
• Deliberation suggests a well formed rational
  mechanism
• Decision making is often as much about political
  manoeuvering as it is about working out what is
  the best solution

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choice - identifiable with some form of assent by
an agent

• Emergence and implementation drift undermine
  possibility of a conscious assent
• Sometimes no one person knows exactly what has
  happened - there are too many aspects
• Multiple contributions to a strategic choice mean
  that often no one individual or group could be
  said to have chosen what happened

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Responsibility - commitment to being identified
as the cause of the action

• Multiple contributors to the action
• Multiple environments that undermine the idea of
  informed choice
• Long stretched out supply chains that diminish
  control

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Carrolls model of corporate social responsibility
Philanthropic Responsibilities
Ethical Responsibilities
Legal Responsibilities
Economic Responsibilities
Source Carroll (1991)
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Stakeholder theory (Freeman)
source Crane and Matten
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Typologies of stakeholders - salience

• Degree of exposure to corporate failures
• Amount of knowledge of organisational processes
• Influence over decision-making

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Shortcomings of stakeholder theory

• How many different kinds of investor are there?
• How many different kinds of worker?
• How many different kinds of customer?

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Shortcomings of stakeholder theory
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A philosophical issue

• use of a noun - existence of a thing
• convenience for attributing values and judgements
  - e.g. the firm is right/wrong, the organisation
  is virtuous, the corporation is psychotic (?)

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How can we call an organisation a thing?

• Convenient summary - a rough target
• Reflecting the legal definition - a point to aim
  at for litigation
• Expressing the experience of community

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What space does an organisation occupy?

• Discursive spaces for stakeholders to be involved
  in decisions
• Operational spaces to create and deliver services
• Distinct areas for specific functions,
  departments, with their own rivalries and
  perspectives
• In other words, an organisation is not a point
  but a volume, with different areas that are not
  homogenous with respect to strategy or culture

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Anatomising a corporate decision

• Roles of different stakeholders - investors,
  government, customers, employees, directors
• Time periods over which a decision happens -
  initial deliberation, leading to a formally
  expressed choice, which is put into practice by a
  range of organisational members
• In other words, a corporate decision is not an
  act, but a process undulating over time

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Example crisis of the sub-prime mortgage market

• Players - investors, directors, salespeople,
  financial compliance officers, legal officers,
  marketing and PR managers
• Process of developing the policy - bright idea,
  evaluation and refinement, design, piloting,
  roll-out
• emergent amendments to the policy as it is
  implemented widely, implementation drift
• Feedback slowly filters through to senior
  management not necessarily the whole truth

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The corporation as a social player

• Society is a construct to help us understand
  how citizens can collectively take decisions that
  meet their needs
• Implication of a range of free agents who
  participate voluntarily in decision making
• The corporate citizen - should they have voting
  rights?

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The idea of society as defining CSR

• Pluralist, elective representational politics
• Possibility to collect together divergent values
  as a totality of expectation
• Idea that business and society are separate and
  have different aims

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In short

• Moral values are attached to human deeds
• Corporations are not humans, and their
  collective activities do not resemble human
  choices in ways that are relevant to moral
  evaluation

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Finally

• Any questions? Comments?

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Some illustrative literature

• A Crane, D Matten Business Ethics OUP 2007
• M Blowfield, A Murray Corporate Responsibility A
  Critical Introduction OUP 2008
• P Griseri, N Seppala Business Ethics and
  Corporate Social Responsibility Cengage
  (forthcoming) 2010
• Journal of Business Ethics
• Business Ethics Quarterly
• Business and Society