Do companies really give a damn? Jonathan Greenblatt considers
If you read the business press, corporate social responsibility (CSR) is the new new thing. At a time when oil conglomerates are “earning” record profits and the dust is still settling from the Enron verdict, social responsibility has become the latest mantra of corporations looking to redeem their public image.It’s now vogue for captains of industry to claim they are motivated not only by a desire for better earnings but also by a desire to save the planet. But if you believe that BP stands for anything other than “Better Profits,” you might be interested in this bridge I’m trying to unload…Certainly we should applaud companies that genuinely are interested in sustainability. A number of firms have found religion and are accomplishing worthwhile results through a newfound sense of local and global citizenry. But unfortunately most Fortune 500 companies are simply flying the banner of CSR, without any real intention of changing how they conduct business.
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| Authenticity cannot be cooked up after the fact. |
In one camp are firms who introduce CSR by way of apology – as a response to critics, whether actual or perceived. But, for example, no matter how loudly Coca-Cola trumpets its participation in the UN Global Compact or its environmental reports, it can’t quiet accusations of reprehensible labor practices in developing countries or abuses of water resources in India. The Coke boycott (killercoke.org), fast spreading across American college campuses, suggests that not everyone is buying the company’s message.In the other camp are businesses that see CSR as a clever means to sell yet more of their goods. Such efforts should be acknowledged for their true aim: the narrow pursuit of profit, albeit dressed up with a bit of lipstick to attract new consumers. Cereal companies may tout the use of non-genetically-modified rice in their products, but they still bury their cereal in sugar and relentlessly advertise it to children.Because of such naked deceptions, corporate social responsibility runs the risk of joining other management fads from the ages – in the dustbin. And if treated merely as a cosmetic, it is doomed to fail. The desire to do the right thing must be bound up in the very fabric of a business, helping to guide its efforts to increase revenue or reduce expenses, or else the business will invariably make short-term decisions that drive immediate profits at the expense of good long-term behavior. Authenticity cannot be cooked up after the fact: it must be present from the beginning.Some businesses have gotten it right. Standouts include General Electric, which is pursuing profitable innovation in green markets with its cross-cutting “ecomagination” campaign; Patagonia, with its clothing and gear designed to enable its customers to enjoy an outdoors lifestyle while educating them at the same time; and Working Assets, with its affordable long-distance service emboldened by consumer-driven philanthropy. A deep-rooted ethical commitment inspired these initiatives. The profits came later.Among other pioneers, I would highlight Ford, for the company’s revolutionary redesign of its River Rouge plant – converting a dilapidated manufacturing complex in Dearborn, Michigan into a model of environmental responsibility, at a cost of $2 billion. Or Starbucks, for its bold decision at an early (and unprofitable) time to provide its entire workforce, primarily part-time employees, with complete health care coverage and stock options (full disclosure: I once worked for Starbucks). These decisions – to construct a production facility that supports the surrounding ecosystem or to plan for healthy workers – seem like short-term costs, but they are sensible when considered in the long-run on their own merits, not just as one-time PR tactics. They are socially responsible solutions to familiar business problems: managing manufacturing costs and reducing employee turnover.CSR does not stand for Corporate Spin and Rhetoric. It cannot succeed as a marketing plan to placate critics. Companies need to build brands and implement business strategies that are grounded in an ethical framework. When thoughtful behavior inspires a corporation from the start, the company can win on multiple levels. And when managers throughout the organization are rewarded for putting sustainability first, the company has a much better chance of creating success that serves the needs of all stakeholders.
