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Where CSR Gets Stuck Print E-mail
Written by David Batstone   

Corporate Social Responsibility (CSR) no longer finds itself on the margins of the business roundtable. Nearly every corporate executive pays it lip service - a fact that leads to both good and bad implications. To say that CSR has become mainstream, on the other hand, would be a vast exaggeration. CSR in truth finds itself floating in liminal space, meaning it is everywhere and nowhere at the same time.

Rather than ponder philosophically on the reason for this state, allow me a practical turn. Based on my engagement in the business world, I have uncovered five places that CSR most typically gets stuck inside a company. Every CSR proposal worth its salt should address effectively these five obstacles before pitching a corporate responsibility proposal.

Roadblock #1 - A Country without Borders Falls off the Map
CSR can mean so many different things - sustainable development, fair labor agreements, partnership with local communities, environmental standards, and on and on. Proposals with the label CSR attached therefore can get bogged down because the change agent fails to express how far the initiative intends to reach. As one exasperated executive shared with me much, "Where does this CSR stuff end, anyway?" It's that clear: offer a beginning, a middle (process) and an end. The more refined and specific a proposal, the better its chances to move through the gauntlet of corporate decision making.

Roadblock #2 - When No One Picks Up the Check
A friend of mine in the "CSR business" lamented to me the other day that she found herself stuck in a familiar situation. As an outside consultant, she had put together a very compelling CSR proposal for a company. But once it came time to attach figures to the project budget - how much it would cost and from where the funds would come - progress came to a screeching halt. The company had no budget line for this kind of effort. Was it branding/marketing, or corporate relations, or even communications? The company reps predictably asked the consultant to solve the problem; she was to devise a way to meet the project goals while dramatically cutting the budget. In order to save myself and internal corporate staff time and effort, I now put this at the top of the agenda at my first meeting. Who will pick up the check, and with what limitations?

Roadblock #3 - We Already Gave to the United Way
All too often a social responsibility project gets framed as a "philanthropic" endeavor for the company. Once that happens, the project will not be taken seriously. Even the most open-minded manager needs to understand how a proposed change will help solve an operational problem, enhance a customer experience or mitigate a legal risk. We are in dire need of senior managers who have the vision and courage to make good choices when the pay-off may not be immediately apparent on the balance sheet, certainly. But they need to be convinced that doing the Right Thing will have a positive effect on their firms' bottom line, or at least will not add to the cost of doing business.

Roadblock #4 - There's No One Behind the Wheel
Change can begin from anywhere in the corporation. But to make a major impact on a company, an initiative needs the enthusiastic backing of leaders at the executive level. They have the means to introduce new practices across the company and the responsibility to govern their execution.

Roadblock #5 - Make It Real
If you can't measure it you can't account for it. That's precisely the reason why efforts to translate principles into corporate practices so often languish at the point of execution. Most senior managers today do feel an escalating pressure to conform to higher standards of social responsibility. But if they cannot understand how to identify and measure their outcomes, managers are likely to consider principles a matter of image, not substance.

In general, CSR gets stuck when its advocates fail to balance the short-term interests of the individual company for competitive advantage with a long-term strategy that will uniquely position the company with customers and investors.

Comments
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Eric Roth - Corporate Social Responsibilit
2005-10-19 11:12:27
I think there's a more serious barrier to CSR, one explored by Joel Bakan in The Corporation, and that is that the modern corporation really only exists for one reason, to create wealth. Any decisions about what to do with that wealth are entirely the perogative of the investors, acting through the board. Until our governance policies are altered to compel social responsibility as a condition of, say, getting a charter to operate a business, CSR will always be something that fluctuates with the strength of the economy. Ironically, this means that funding is likely to dry up when it's needed most, during the downturns.
Pat Batchelder - The market almo always work ag
2005-10-19 22:23:29
Firms that practice any form of CSR are to be highly commended, but, in general, most courses of action that are socially responsible (there are some exceptions) cost firms money: not clear-cutting, not dumping waste into rivers, not spewing pollution from smokestacks, contributing to local schools and communities, and so on.
Stockholders want to maximize their returns; executives want to maximize their salaries; Boards of Directors are charged with hiring executives who will maximize profits. A firm which has to charge higher prices to pay for its socially-responsible actions will lose market share to firms that can charge less because their costs are lower. That is why government regulation is necessary if people want firms to act in socially responsible ways. The red tape may be a nuisance; badly-written laws often have unintended consequences; and it costs tax dollars to enforce regulations, but I'd prefer to pay and to be able to trust that my drinking water won't sicken me and my food won't poison me, to mention a few examples.
The free market only works its wonders under certain restrictive conditions, and no economist ever claimed that the Invisible Hand guarantees that everyone will be able to earn a living wage. In reality, economic power tends to become concentrated, and government action may be needed to prevent the emergence of monopolies that victimize workers and consumers. The robber barons may have contributed lavishly to their favorite charities, but government action was required to end the many intolerable abuses of unchecked corporate power. Unfortunately, we seem to be returning to the era of the Robber Barons.
Prabha Nagarajan
2005-10-20 03:02:15
How does a corporation communicate the
CSR activities it undertakes or proposes to undertaketo its stakeholders? Will this communication achieve the desired effect or show up the Corp in a negative light , esp if change is being effected in certain operational methods .
Contrary to popular opinion, investors do care about the world around them, even this caring stems from a fear for their own survival and continued prosperity. Effective commucn can resolve a lot of blocks facing CSR.
Susan Lovejoy - CSR
2005-10-20 03:30:31
Interesting article! It seems to me that if CSR is an issue at all is because we have lost all connection of the known and unknown potential impact our actions have in our immediate communities and the world. To be perhaps simplistic, business is all (and only) about people. If there were no people to buy widgets there would be no widget company. Any company that does not consider the impact its policies and concrete actions in carrying out (or not) these policies, has on people and what affects them will, in one way or another, have it bite them in the rear. Whether it's those people working for them or simply memebers of the community, local and world (health, environment, fair wages and humane working conditions, etc.) In so many ways we have lost the feel and reality of community connection, especially those insulated at the top of the corporate ladder (primarily white anglo males).
Of course not all women are alike, but one thing that women generally have in common is a sensitivity to community and a more whole-istic and synergistic understanding of how all the parts work together. I would hope that as more women attain status in the stratosphere levels of business management that CSR actually becomes a non-issue because it has been integrated as Community Social Responsibility. In fact, renaming it might just be one of the ways to bring home its real meaning.
Jerry Dilliard - The Reason of Profit
2005-10-20 13:01:10
In my opinion the principles of CSR are overlooked due to the corporate
Reason of Profit that is confused as principle and everything else is put on
hold until the profit is shown.

We seem to confuse a reason that is principle with a reason that is just
worldly reason (fear based) principle thinking is not fear based.
Lynn Durham - We need new kinds of corporati
2005-10-20 22:55:46
[EMAIL]smile@lynndurham.com[/EMAIL]
Corporation by law are to make money for the shareholders. Management could be taken to court for spending money "unwisely."
New laws that create new forms of corporations are in order. Ones that have two and three bottom lines (such as social and ecological). Old ones can still exist and people can vote for what they want in this world with placement of their money into shares in these new organizations.
Sayre Darling - Corporate Social Responsibilit
2005-10-24 13:51:13
Based my experience in both the corporate and the non-profit worlds, I'd suggest the barriers to CSR are:
1. The lack of ownership for the CSR initiative selected by the company among key internal audiences (employees and board members) and external stakeholders (customers and investors).
2. The lack of connection CSR issues have to the company's brand. To keep the issue relevent and top of mind, the CSR issue needs to be closely related to the values of company's brand in the minds of both internal and external audiences.
3. The lack of connection CSR issues make with both the head and heart of business. Many CSR issues make sense on the bottom line and don't capture the employee's hearts, while other CSR issues that are very important to employees but don't make sense on the bottom line.
4. The short attention span that many companies have on CSR issues. To make a difference over the long-term takes continuity of management interests (often during multiple management upheavels), ongoing communication and cultivation of interest to employees, and a perceived long-term value by shareholders.
Michael B - CSR and quarterly results
2005-10-25 15:24:39
The success and failure of our corporations is measured by the quarter. A cost benefit analysis of an effective CSR philosophy/program would include a time frame of several years, and in some cases might literally "outlive" the management of the company before the full benefit could ever be realized. As is mentioned above, that?s why we need government regulations defined and managed by a strong participatory democracy. Oh well, sometimes a great notion.
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