Globalization implies
an open world economy and as a direct consequence results in economies not restricted by
national borders .Governments are no longer in a position to manage this
phenomenon in isolation. In order to bridge this gap, private sectors provide
value with an advanced concept of corporate social responsibility , which has
to go beyond the traditional concept of philanthropy .A paper on this subject by Josie Fisher and Bligh Grant, titled " Beyond
Corporate Social Responsibility: Public Value and the Business of Politics" , critically examines Moore's Theory of Public value
and attempts to provide tools for managers in the current business scenario
taking into account business ethics and corporate social responsibility , both
of which are increasingly relevant in the present business environment.
Mark Moore's Theory of Public Value is employed as a framework to analyze the role of political relevance in corporate social responsibility. Using the context of the strategy triangle , Moore makes the central point that two factors namely , authorizing environment and organizational capabilities, enable managers to function as catalysts in creating value . In this context, value is defined as an "ethical stance ", which is treated higher than what possibly might be an idea of ethics or even utilitarian interests.
The changing nature
of corporate social responsibility is the premise on which Moore's framework is
adapted . The authors analyze Scherer and Palazzo's view of Corporate Social Responsibility
which differentiates itself from the general understanding of CSR either as
corporate citizenship or corporate constitutionalism. It identifies the increasing influence of business in
political activities. An emphatic point about prominent corporations
incorporating political roles into their activities is made when they quote BHP Billiton.
"For example,
commenting on its interface with stakeholder groups in remote communities, the Supplementary
Sustainability
Information 2010 states:
The range of topics discussed during these stakeholder consultation processes
includes town amenity and housing, cultural preservation and heritage, impacts
of growth and expansion projects, contractor management, security and crime,
Indigenous issues and social development (BHP Billiton, 2010b, 14)"
A five point
framework is analyzed on which Moore's theory of public value is extrapolated .
Firstly CSR has global/institutional context ,implying that some governments
have transferred some regulatory impact to global governance. Secondly CSR can
self regulate, indicating that non government entities can implement laws. Thirdly
CSR has expanded its scope from liability to social connectedness ,that is,
companies want to look beyond legal responsibilities and proactively engage
with the society. Additionally CSR builds a moral legitimacy ,apart from moral
codes dictated by the state, with companies building their own normative
frameworks. Finally CSR can be viewed as shifting form liberal to deliberative
democracy ,where private organizations supplement the representative democracy
with deliberative decision making Given this nature of evolving
business environment, authors make a point that Moore's concept of civic virtue
can provide managers with a platform to wield a more political function, responsibly.
In my opinion, the
paper is significant since it brings forth the prominent role of managers, given
that managers both in public and private sector have access to limited resources
and direct control over the operational capacity to utilize the resources. The
paper also highlights the fact that CSR has evolved beyond general initiatives
geared towards community, environment , charity or any other "cause"
trending in the market. This is tied in with
Moore's normative theory of public value which encourages managers to interface
with the political system while acting upon the organization's distinct competence.
The paper puts forth an important framework that can drive managerial behavior
beyond a bureaucratic mindset, especially when it concerns allocation of
limited resources.
CSR! I would argue that there is no such thing. Do corporations have a responsibility to anyone but the shareholders? I think not. Yes, some individuals would choose a business on whether or not they did XYZ, but for the most part customers want a product and they will get that product from who ever can produce it. I think that is more a reflection on the customer for not sticking to their values and purchasing items from the cheapest source, but I digress. There is a good article by the WSJ (http://online.wsj.com/article/SB10001424052748703338004575230112664504890.html) that points out business are only involved in CSR when it benefits them the most, and rightfully so! I do believe that there is an ethics and legal issue when corporations push the limits too far. As far as social responsibility, as long as they are not doing anything unscrupulous then the “Public Value” is best left to politicians who are voted into office.
ReplyDeleteThank you for your opinion Jason .
ReplyDeleteHowever, I must say I disagree on almost all levels .First of all ,the article you quote is based on an opinion ,which doesn't seem to have received very many positive reviews by anyone in the business community. More importantly , it is a fact that corporations can continue to stay in business ONLY if they have a shared value with the community they are operating in. If their prosperity is not reflected in the community they are working with, it is only a question of time before they cease to exist .Of course none ever made the claim that CSR was created out of the goodness of a corporation's heart. However our discussion is about strategic decisions a company has to make ,taking into account it's environment We are not referring to non-profit companies or charities. Meeting social needs and capitalism cannot, in my view have conflicting paths of progress.
To understand why CSR is critical for a company's sustained success ,here is an article by Michael E. Porter and Mark R. Kramer’s “Creating Shared Value” (Recognized as Top Article of 2011)http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1
Unless you have a productive and growing economy where is your market ? CSR is very real and here to stay.
@Jason: "CSR! I would argue that there is no such thing. Do corporations have a responsibility to anyone but the shareholders? I think not."
DeleteSo why do leaders in the world's top companies still pledge their full commitment to social responsibility even during an economic downturn (http://www.nysemagazine.com/ceoforum/)? Through their actions, corporations bear responsibilities to all stakeholders and the community at large. There are laws and regulations that govern the activities (environmental, employee, consumers etc.) of corporations. Corporate citizenship helps them abide by these laws as well as avoiding them expensive lawsuits. To this end I believe it’s a win-win action for all!
@Rashmi: Interesting article. However, I disagree that CRS by itself, is a shared value of all communities. Ideologies, places and time play a strong factor in shaping what is (and is not) a shared value. Also, I believe there is a nuance with the article you quoted in your reply to Jason. It seems to me that the discourse by Porter and Mark is on creating shared value (CSV) which is a different concept from CRS. One of the authors makes this clear in his blog. Even though you could summarize both concepts as “doing well by doing good”, they represent different strategic and management decisions. CRS is about responsibility whereas CSV is about creating value. While the latter is about improving profitability and strengthening competitive position by creating new business opportunities that create new markets, the former is perceived as a cost center. Even though there is some overlap in both concepts; I believe they are fundamentally different.
@Roland, I would point you to another Blog that makes an interesting point, the last two paragraphs sum it up rather nicely (http://businessethicsblog.com/2011/08/08/two-problems-with-csr/.) Just to make sure I’m not misinterpreted, companies should treat their employees, shareholders, and stake holders fairly, ethically, etc... But the community is the responsibility of the individual and all the individuals that live in that community, once a company starts getting into the “welfare” business it becomes expected over time. How many government welfare programs have you seen scrapped? I know it’s not exactly the same thing, but it’s the same concept.
DeleteThis is really an interesting article. Corporate Social Responsibility (CSR) suggests that the enterprise should not only be responsible to create profits and bear legal responsibility for shareholders, at the same time, but also undertake the responsibility to employees, consumers, communities and environment. I agree with the author to define value as “ethical stance”. I believe that the company should clearly communicate the ethical stance of the business to all employees. Employees should not only be expected to act in an ethical manner, they should also fully understand the ethical stance of the small business.
ReplyDelete