Musings on Corporate Social Responsibility

By: Kate Walter

Often when asked which area of public relations I’m most interested in, I will respond by saying, “corporate social responsibility.”  As a person who regularly volunteers within the community (Junior League of Fort Myers, Gulf Coast Humane Society’s Fast & Furriest), encourages others to give back to charitable organizations (Susan G. Komen Race for the Cure, Relay for Life, Shy Wolf Sanctuary) whenever possible and believes in the overall good of humanity, the idea that corporations are beginning to place philanthropy in their overall business plans brings warm fuzzies to my heart.  But, should it really?

Carroll's CSR model

Over the years many different definitions and models of CSR have developed.  Perhaps the most memorable (since it’s been a few years out of the classroom now) being Carroll’s CSR pyramid.  The pyramid acts as a building block, where companies would first need to lay a foundation of economic responsibilities before they can move onto the next tier of legal responsibilities, then ethical responsibilities and finally their philanthropic responsibilities. This model proposes that for businesses to get to a level where then can focus on giving back, they first have to take care of their economic bottom line. From a practical standpoint, the bottom line is what drives all businesses.  You can ask almost any CEO, Stakeholder, COO and especially a CFO, and they will most likely tell you that if a practice or strategic business plan does not inevitably benefit their bottom line, they are not going to move forward with it.

However, herein lies the problem with CSR, the debate between theory and practice. The fundamental ideal behind this theory is that businesses are doing good for the sake of doing good.  Not necessarily to benefit their bottom line, although studies have shown that by adopting CSR practices, companies do see an economic benefit.  But, in theory the bottom line should not be the driving force behind pursuing a CSR plan. ^ Orlitzky, Marc; Frank L. Schmidt, Sara L. Rynes (2003). “Corporate Social and Financial Performance: A Meta-analysis” (PDF). Organization Studies (London: SAGE Publications) 24 (3): 403–441. doi:10.1177/0170840603024003910. Retrieved 2008-03-07.)

And you may argue that whether the reasoning behind pursuing CSR is one of idealistic, delusions of grandeur of benefiting publics, or the corporate ideals of improving the profit margin of the business, as long as both are occurring, should it matter what the reasons are behind it?  Perhaps, not.

You might also argue, as Milton Friedman did, that a company actually benefits society more by focusing on the bottom line.  This company offers jobs, spreads wealth within the community and government, and has added time and resources to spend on CSR.  In fact, many of the companies that have notable CSR plans do tend to be large corporations such as Coca-Cola, Ben & Jerry’s and Starbucks, that have the added finances to spend on developing CSR plans.  ^ Friedman, Milton (1970-09-13). “The Social Responsibility of Business is to Increase its Profits”. The New York Times Magazine. Retrieved 2008-03-07.

Suffice it to say the debate will continue. But for me, I’m holding on to the warm fuzzies for a little while longer.

WarmFuzzies