Not too long ago I read an article on
corporate social responsibility (CSR) that began:
decade or so since the phrase "corporate social responsibility" first
began to make its way into the mainstream corporate lexicon, the concept
has gained widespread support and acceptance in the business world. In
fact, the formal adoption of CSR policies has become so widespread that,
among larger companies, at least, CSR policies have become almost,
was dumbfounded when I read the above because
it was almost forty-seven years ago, more than
a decade, that I attended a lecture, while a college freshman in
Seattle, given by Harold Geneen, the then CEO of ITT, International
Telephone and Telegraph, on corporate social responsibility and yet it
has taken over four decades for his message to finally take root.
Before Jack Welch and
GE, there was Harold Geneen who molded ITT into the most diversified
conglomerate in the world with interests in manufacturing, distribution,
communications, insurance, hospitality, and real estate, to name just a
few of the industries ITT acquired and managed . It was Harold Geneen
who said "leadership is practiced not so much in words
as in attitude and in actions".
Although the past
seven years has produced changes that are simply staggering, in how
corporations look at their social responsibilities not only to their
employees but also their customers and the communities where they
reside. One of the most significant changes is that a bona fide industry
has developed around corporate responsibility, complete with
consultants, college courses, an industry magazine, conferences and
associations, and all competing with each other for corporate attention.
While just a few years ago it was relatively difficult to find either
advice or case studies on corporate responsibility best practices, and
now the volume of information available on CSR is almost overwhelming.
And while back in the 60's corporate responsibility was only a theory
practiced and promoted by Geneen and a few followers, for many companies
today it has become a key element of their corporate strategy-and also a
Sadly, there are many things
that have not changed over the past forty-seven years. Far too often,
corporate responsibility executives are frustrated by their lack of
access to key corporate decision makers. Too many companies still
consider corporate responsibility to be an accessory clause that can be
added or removed from the company policy as needed. Worse, a surprising
number of organizations still consider corporate social
responsibility to be solely about image or brand building, nothing more
than a public relations exercise.
Often it is only after a company ends up on the wrong end of a consumer
or pressure group campaign that its leaders recognize the strategic
importance of corporate responsibility. As a result, many of the leaders
in the CSR
field are those companies that have been
most badly mauled by non-governmental organizations or consumer-led
campaigns against them.
Is it no surprise, then, that some of the organizations most vilified
over the years by human rights and environmental campaigners, companies
such as Wal-Mart and Nike, have become enthusiastic proponents of
promoting corporate responsibility?
By underrating the importance
of corporate citizenship, these companies are making a colossal
strategic mistake. The world in which they operate has changed
fundamentally in recent years. The standards of behavior that companies
are expected to maintain are much higher today then in 1966, 1976, 1986,
1996, and even 2006, while the price of failing to meet those
expectations is much higher. Through social media, for example,
companies' customers-and critics-can communicate with each other as
never before. Already, there are examples of global conglomerates having
to abruptly change their strategy and hurriedly upgrade their social or
environmental behavior after finding themselves on the receiving end of
a successful social-media-enabled campaign and there will be many more
to follow in the future.
In many companies,
corporate responsibility has undergone a transformation from peripheral
concern to key business issue. But one thing that has not changed even
slightly over the past four decades is the question, "are they for
real?" The suspicion that many corporations' CSR efforts are really
"papering over the cracks" continues as strong as ever, and perhaps more
so now that companies have learned the tricks that present themselves as
responsible corporate citizens. With PR firms and consultants making a
comfortable living from their corporate responsibility consultancy
services, cynics would be forgiven for thinking that the corporation's
emphasis is more on looking good than being good.
British energy giant BP is a
case in point. Over the past decade it has made a concerted effort to
present itself as a company that cares as much about the environment as
about profits, and yet, it is still trying to play down what has become
one of the world's worst-ever environmental disasters. When a company
that re-branded itself as "Beyond Petroleum" is responsible for one of
the biggest oil spills in history, critics of BP's media blitzes
justifiably have a field day. And it is hard to argue with those who
suggest the millions BP paid out in its media campaign to publicize its
corporate responsibility credentials would have been better spent
designing safer drilling procedures on its oil rigs.
One of the other important changes
in corporate responsibility is the understanding that treating corporate
citizenship as something distinct from the company's core operations is
no longer acceptable. The companies that flourish over the coming
decades will be those that successfully embed the principles of
corporate responsibility into the core values of their business.
And the final, most important
difference? The leaders in the corporate responsibility movement are not
doing it to be nice. They are doing it in order to survive. Perhaps they
are finally understanding the message of Harold Geneen in 1966 and what
he really meant by the phrase "sustainable business."
I Wish You
David Balovich is an author, credit consultant, educator, and public
can be reached at
firstname.lastname@example.org or through the Creditworthy website.