Food for Thought - CSR Language & Meaning

[peterdesmond]

I have been thinking about the language required to engage medium-sized companies and other types of organisations (50-250 employees) in CSR. It struck me that I have been confusing a number of different elements of the subject. I would welcome a discussion on the following thoughts.

The use of the words Corporate, Social and Responsibility don't seem to me to reflect the subject we are dealing with. Corporate - not just companies; Social - not just community issues; Responsibility - beyond compliance. To better engage the medium-sized organisations we can make a distinction between two distinct elements of the subject:

1. Strategic Performance - maintaining strong stakeholder relationships (including employees, customers, investors, community, suppliers, media, regulators, environment) makes good sense for any organisation. Investment and benefits in such activities (time and resources) can be evaluated from an economic perspective, although at times difficult to measure quantifiably. In a talk at the RSA in 1990 (and in HBR in 2002) Charles Handy suggested that, "The principal purpose of a company is not to make a profit - full stop. It is to make a profit in order to continue to do things or make things, and to do so even better and more abundantly". These are strategic matters and necessarily focussed on increasing the financial performance of a company in order to generate long-term value for its shareholders.

2. Role of Business in Society - should the business of business be only business? Can business play an active part in improving society? It is quite easy to measure the cost of investing in such activities (time and resources) but more difficult to assess the impact that is being made. Can companies take on the role of government? Possibly. Particularly where governments are failing. For example the book "The Profit of Peace" by Karolien Bais and Mijnd Huijser examines how multinationals in Afghanistan, Burma and Rwanda used their core business competencies to promote peace and stability in conflict regions and what role business has in diplomacy. Clearly it is the interest of companies to assist in the creation of stable societies so that their business can thrive. To quote the late Anita Roddick, "Businesses have the power to do good".

My conclusion is that both elements should be considered by organisations who wish to sustain their success in the long-term. Tomorrow's Company research suggests that the definition of success is unique to each organisation and can be considered from a Triple Bottom Line perspective (economic, social and environmental). I believe that the key challenge for companies is to consider how they can use their core business competencies and skills to assist in alleviating world problems to the benefit of both their own economic model and the needs of society. Examples of this are two Microsoft engineers creating software to support displaced refugees in Kosovo in 1999 and Unilever's Lifebuoy handwashing campaigns in partnership with UNICEF to reduce childhood deaths from diarrhoea.

To some extent it doesn't matter what we call these activities - if companies want to generate enduring profits and if individuals want to improve our society and protect our planet, what matters is that companies focus their strategy and people focus their actions on those things that can make it happen.

Any thoughts?

Peter Desmond
Growth International
+44 (0)20 8898 4333
peter@growthinternational.com
Growth International

[Metyu]

Thanks, Peter, for this thought-provoking post.

I think CSR is an odd term. Manufacture and trade have been fundamental to human societies for a long time (I won't bore you with my theories on the connections with Xmas and Ramadan!), and the division of labour has helped society enormously. To the extent that one might say, it would be irresponsible not to be in business!

I think that we are in a transition period, and with time terms such as CSR and triple bottom line will become irrelevent. They have been very useful to highlight some things we can do better, but I think your suggestions of strategic performance and business in society are terms with more merit and substance.

Like the term sustainability itself [no detriment to this forum intended!] which taken literally means the ability to sustain - you might agree that the Earth has shown remarkable sustainability - many words used to describe this emerging business practice feel somewhat confused.

I think this is important if the business of sustainability is to survive. Thanks a lot for bringing up this issue.

PS As to your last para - individuals make up businesses! Businesses have shown remarkable aptitude for organising people, but the process is not as top-down as some seem to think. To separate the two is like separating hot and cold - broadly useful but not accurate... ?

[peterdesmond]

Metyu

Thank you for your posting. I agree with your comments about people and businesses - the two are intertwined. At Growth International we focus on personal and organisational development - as people grow, so will their organisation. I like the African concept of Ubuntu, "a person is a person through other persons".

Peter