Source of the Controversies
The Role of Business in Society: (Is CSR a Responsibility, an Advantage, or a Just a Liability?)
During the 1980s, discussion of CSR progressed logically from responsiveness to responsibility and rectitude: The ability “to act with rectitude, to refer their policies and plans to a culture of ethics that embraces the most fundamental moral principles of humankind” (Frederick, 1986, p. 136). The heart of CSR is a firm interdependence between business and society.
Although his statement is fraught with the irony surrounding the tobacco industry, George Weissman (1984), former Chairman and Chief Executive Officer of Philip Morris, Inc., set corporate responsibility into its sociopolitical context: “Like property, the corporation is a creation of the state. It gets its charter from the government. To survive, the corporation subjects itself to regulation by government, and to serving the needs of government and the commonwealth.” This point “is fundamental to understanding the concept of corporate responsibility in its current context; to understanding that we are not dealing with a fad; and to understanding that we are dealing with the fundamental existence and survival of the corporation” (p. 67). Businesses are expected to be involved in community affairs, formerly the exclusive responsibility of government, reasoned Chrisman and Carroll (1984) in their efforts to reconcile profits, business goals, and society.
CSR is basic to each organization’s character, good, bad, or in between. Its character depends on how well it can align its interests with those of consumers, audiences, and publics. For this reason, CSR is not merely a communication challenge; it is a management planning and performance challenge.
Public relations can help an organization know the standards needed to achieve CSR through issue monitoring. Such issue monitoring facilitates an outside-in approach to considering what makes an organization good—the standards and expectations by which it is judged. An outside-in approach makes pragmatic and ethical sense because activists and other critics play a significant role in the raising of CSR standards and in evaluating private sector performance.
Platitudes are likely to foster as well as frustrate efforts to discover which standards of corporate responsibility truly make a difference in the quality of relationships with key stakeholders. The challenge is to know how the organization’s interests align with those of its stakeholders. One goal of such discussions is to achieve the common good (Mahon & McGowan, 1991) and to enhance community (Heerema & Giannini, 1991).
Meeting stakeholder expectations is a vital part of achieving the legitimacy needed to operate. Sethi (1977) coined the legitimacy gap between organizational performance and the expectations of myriad stakeholders. At least in part, questions about legitimacy express “concern for a corporation’s image” (Clark, 2000, p. 364). Is it a crisis (therefore the rationale for crisis management and communication) when an organization’s image is damaged because its legitimacy is questioned because it fails to meet established CSR principles?
Heath (1997) featured the legitimacy gap as the rationale for his discussion of the four pillars of strategic issues management (SIM):
- Strategic business planning which includes foresight judgment, budgeting, and choices among options that lead to organizational success within a sociopolitical environment.
- Issue monitoring which can help organizations understand the alignment of interests, points of misalignment, as well as power resources and challenges by various stakeholders.
- Corporate responsibility, the standards by which an organization is judged.
- Issues communication, the dialogue to better understand facts, develop appropriate evaluations, create vital identifications, advance reputations, and foster public policy positions that achieve mutually beneficial interests. Such discourse defines terms, establishes principles and standards, and thereby creates the socially constructed meaning that guides CSR.
SIM sees CSR/CR as the socially approved expenditure of material and human resources to advance the strategic business plans in ways that meet stakeholder expectations. When firms’ operations offend stakeholder expectations, legitimacy gaps motivate stakeholders to correct those operations. Such logic applies not only to the private sector, but also to non-profit organizations and government agencies.
Without oversimplifying the topic, four general themes seem to dominate the discussion of business CSR/CR:
- Profits efficiently earned may not constitute a sufficient CSR standard.
- Companies should engage in strategic philanthropy whereby good acts improve operating conditions and quality of life—and serve society.
- Companies should partner with non-profits and government agencies to solve social, economic, and psychological problems in society.
- Companies should meet or exceed stakeholder expectations of performance standards needed to satisfy the moral rectitude that business contributes to the long-term business climate by collaborative decision making and operating in the public interest.
In such matters, CSR might be defined as corporate strategic philanthropy, even narrowed to “effective public relations” where images are massaged by wordsmiths who tout the excellence of the organization and build accommodating relationships with stakeholders. It can be viewed as cause-related marketing. At best, it can be conceived of as knowing, achieving, and communicating about higher standards of performance in the public or community interest.
