Corporate Social Responsibility

Defining CSR: An Evolving Concept and Standards
 
A Variety of Definitions
 
As is often the case on thought provoking topics, the CSR literature has produced a variety of definitions, each of which features the advantages to be accrued from CSR.

• Kotler and Lee (2005) defined it as “a commitment to improve community well-being through discretionary business practices and contribution of corporate resources” (p. 3). These authors found an increased commitment to give more, to report on the giving, to set high social goals for organizational success, and to use such details to build corporate reputation and brand equity.
• Basu and Palazzo (2008) reasoned that CSR is “the process by which managers within an organization think about and discuss relationships with stakeholders as well as their roles in relation to the common good, along with their behavioral disposition with respect to the fulfillment and achievement of these roles and relationships” (p. 124; italics in the original). CSR is “the continuing commitment by business to behaving ethically and contributing to economic development while improving the quality of life of the work force and their family as well as the community and society at large” (Watts & Holmes, 1999 cited in Sims, 2003, p. 43).
• Mahon and McGowan (1991) adopted common-good principles of CSR: “it is clear that most authors mean corporate social responsibility to include behavior and actions beyond merely profit making that serve to improve the conditions of society and individuals within that society” (p. 80).
• Ihlen (2005) suggested that Bourdieu’s (1986) concept of social capital offers a constructive approach to the power elements within a relationship between an organization and those on whom its success or failure depends. Whether instrumental, symbolic, or purely relational, the quality of each relationship rests on whether one entity wants another to continue operation in the current fashion.
• In his entry on Corporate Social Responsibility in the Encyclopedia of Public Relations, Rawlins (2005) proposed that CSR means “doing well by doing good.” That means, for instance, that organizations with high CSR become the employers of choice (an excellent place to work), a neighbor of choice (community where it operates is pleased to have it operating there), and vendor of choice (avoiding bad product design and safety issues—giving full value). The real challenge is for organizations to be accountable beyond financial obligations.

Main Themes
 
However platitudinous various CSR definitions are, at least four realities are ever present in management discussions and strategic planning regarding CSR:

• Every organization operates in a multiple stakeholder arena where each stakeholder is likely to hold different expectations of how it should operate.
• No absolute standards of corporate responsibility exist; they are defined (socially constructed) by each generation.
• Executives are outraged by accusations that they prefer unethical business practices. For this reason, how discussion transpires within an organization accounts substantially for its positive or negative impact on helping management to be reflective: take an outside-in approach to their planning, operations, and evaluations.
• Calls for operating in the public interest, or community interest, often requires profoundly complicated analysis that defines this interest as an interlocking set of multidimensional determinants of mutual interest. The details move discussions beyond platitude. The devil is in the detail.

Such considerations demand that CSR is more than strategic philanthropy or community relations, such as efforts to sponsor little league teams and engage in goodwill fundraising. It is more than the sort of odious public relations where accommodation and being nice is seen to be more effective than engaging in policy development and implementation that achieves a true community of interest, now ever more global and focused on sustainability.
 
Expectations of how organizations should perform change over time. “Reshaping the corporate citizenship debate poses challenges to both the advocates and critics of corporate social responsibility. But it is where the debate should occur” (Heineman, 2005, p. B2). Advocacy over standards is likely to occur within as well as outside of each organization (Berger & Reber, 2006; Heath, 2007). The broadest set of ethical concerns arises from the organization’s economic, social, and political interests (Wartick & Cochran, 1985).
 
Why is CSR Important?
 
Answers to this question, partially addressed in the previous section, depend on how CSR is defined and what obligations that definition hold for an organization’s mission and vision, its standards of corporate performance, as fundamental to its planning and operations—and the conceptualization of the societal obligation of the organization to satisfy its franchise. As Basu and Palazzo (2008) concluded, “Such a process view of CSR locates the phenomenon as an intrinsic part of an organization’s character (i.e., the way it goes about making sense of its world), with the potential to discriminate it from other organizations that might adopt different types of sense making processes” (p. 124).
 
One of the strongest CSR roles of public relations is to participate in the social construction of the meaning that defines and evaluates CSR standards by type of organization and during a given era. In contrast to Milton Friedman’s narrow and conservative concern, a more reflective answer to the question of CSR’s importance can be seen in the metaphor that once offered the challenge: What is good for General Motors is good for America. The contrasting point, and the theme of post-modern discussions of corporate responsibility, is this: What is good for society is good for General Motors.
 
Framed this way, CSR is important for an organization’s success for two primary reasons: (1) To enhance its reputation as being morally bound to rectitude, a rational discretionary choice bringing in economic benefits (Werther & Chandler, 2006), a means for boosting brand equity and sales, and (2) to advance the organization’s credibility and character in public policy battles and during the early stages of a crisis.
 
Mutual, Aligned Interests and Moral Argument
 
CSR is the foundation for achieving mutually aligned interests and winning the moral argument about the social relevance of the organization. The modern approach to organizational management was to communicate in ways that shaped markets to the advantage of businesses—an inside-out approach to relationships. A post modern approach suggests that an outside-in approach is more capable of creating and sustaining relationships by achieving truly mutual and aligned interests.
 
This attention to mutual and aligned interests forms a moral argument for CSR. This argument, similar to the business citizenship perspective, also known as normative stakeholder management (Donaldson & Preston, 1995; Jones & Wicks, 1999), states that organizations consider themselves to be duty bound and deeply embedded in the strength and wholesomeness of community. A large part of corporations’ success comes from the values, expectations, and principles of the wider society within which they operate and which franchises them to operate. In a sense, a social contract exists and conforms corporations to society’s objectives (Wartick & Cochran, 1985). Within the corporate social performance (CSP) framework, Carroll (1979) stated that corporate social responsiveness is measured by the degree to which management responds to the social sphere by enacting each of the firm’s social responsibilities.
 
Systematic consideration of CSR can be used to reduce friction and increase harmony with stakeholders and increase the organization’s strategic business advantage. To do so requires issue monitoring and critical thinking which are second nature to effective strategic issues management as public relations:

• Ascertain the standards of corporate responsibility held by key stakeholders.
• Compare those standards to those preferred and used by the organization.
• Determine whether differences exist and, if so, whether they strain the relationship.
• Ascertain whether differences in facts account for the disparity in expectations.
• Decide whether value differences constitute the disparity between the organization and its key stakeholders.
• Budget for change options, whether communication strategies, public policy efforts, or redefined strategic business strategies to respond to stakeholder expectations.
• Alter performance or operating standards to lessen the legitimacy gap.
• Take a communication or public policy stance based on correct facts or preferred values when the community interest would be better served.
• Eliminate misunderstanding and disagreement by supplying facts or redefining standards vital to the community interest.
• Incorporate preferred standards of corporate responsibility in strategic business planning, and communicate with key external stakeholders.
• Integrate standards into individual, unit, and corporate performance review, including efforts to achieve total quality management.
• Use improved standards of corporate responsibility to achieve competitive advantage.
• Integrate these standards into product, service, and organizational reputation messages.
• Achieving mutually beneficial interests is not easy in a multiple-stakeholder- environment.

Not all stakeholders see the world in the same way. Interests often conflict. Priorities differ. High standards of corporate responsibility foster aligned relationships and can avoid costly conflict. Good performance is a bottom-line issue.