“Conversations about the
obligations of business in society go back at least as far as John Locke, with
his focus on human rights in the late 1600's, as well as to Adam Smith and his
focus on morality in The Theory of Moral Sentiments in 1759,”
says Bentley Associate Professor of Management Jill Brown. Terms like ‘corporate social
responsibility’ are simply the modern language around long-percolating ideas.”
The difference today, she says:
Corporate social responsibility (CSR) is accepted as a norm in business. This
paradigm shift has moved businesses from a sole focus on bottom-line profits,
with the shareholder as the primary stakeholder, to a focus on multiple
stakeholders beyond the shareholder. Brown cites widespread
acceptance that “rules of the road” for businesses include at least some
attention to CSR.
Brown’s research and teaching
center on strategic management, corporate governance, ethics, strategic
leadership and, of course, corporate social responsibility.
She has written for Business Ethics Quarterly, Organization Science, The Journal of Business Ethics, and Strategic
Organization, among others. One notable contribution is serving as
co-author of a leading textbook in the CSR field, Business and Society: Ethics, Sustainability, and
Stakeholder Management (Cengage Learning), to be published
in January 2017. Brown joins longtime co-author Archie B. Carroll (University
of Georgia) and builds on the work of the late Ann K. Buchholtz (Rutgers
University), for the 10th edition.
Business and Society is a touchstone
textbook for business students worldwide, and regularly ranks among the top
books in business, leadership, and management categories.
“Archie Carroll was one of the
earliest management scholars to focus in on the practice and study of CSR,”
explains Brown, who is revising chapters and writing case studies for the new
edition, updating a number of the offerings for both the print and digital
components. “It’s an honor to be participating in this project with him.”
Views of CSR among
students
Working with Bentley students as
they learn the complexities of CSR informs Brown’s own studies.
“Often, you need to find case
studies and examples that prompt undergrads to dig deeper into companies’ CSR
statements and profiles. Having grown up with CSR as a presumed norm,
undergraduate students are not initially as critical of CSR reports as they are
of, say, a company’s financial statements,” observes Brown, who helps these
business students “reach the next level of sophistication” in their thinking
about CSR issues.
Graduate students, conversely,
raise concerns about CSR common in the public at large: namely, the suspicion
that much or all of what is presented as CSR is just window-dressing, a public
relations gambit by any given company. Certainly, recent examples of ethics
breaches and leadership failures at companies such as Volkswagen lend fuel to
such cynicism.
Many dimensions; many
stakeholders
As Brown explains it, CSR works —
or fails to — in multiple dimensions: economic, ethical, legal, philanthropic,
fiduciary, and more. When something is amiss in one of these dimensions, it
often is amiss in more.
“What happened at VW was in some
sense no doubt ‘allowed’ or ‘encouraged’ to happen in more than one way,” says
Brown. “Time, and investigations, will tell exactly where the breakdowns
occurred.
“There’s still a great deal of work
to be done incorporating the ‘new normal’ of CSR into company culture,” she
adds, noting that CSR reporting is increasingly part of corporate transparency
and accountability. CSR, by definition, involves stakeholders other than
shareholders, and gathering information from them, as well as
reporting out to them is an essential component of CSR.
“Broader” stakeholders in the CSR
model include business partners, supply-chain partners, international
communities where businesses are located, governments and consumers . . .
really, anyone with a relationship to the business at hand, whether it’s making
widgets or processing information.
“Even shareholders are thinking in
this model,” says Brown. “They understand there being multiple ‘legitimate’
stakeholders for any given business.”
CSR’s multiple
obligations
CSR is not to be confused with
social entrepreneurship, which is sometimes defined as doing well by doing
good. That is, creating value (and engaging philanthropically) via a business
model that addresses an identified social need, like poverty. Rather, CSR is
the new rule of basic good behavior and good strategy for all companies;
increasingly, there is a business case to be made for it. Brown and her
colleagues in the field have shown, through multiple studies, a correlation
between financial performance and social performance. She contends that the
oft-cited “people, planet, profit” mantra of the “new triple bottom line” is
now a financial reality.
“Yes, businesses have an obligation
to make money,” Brown explains. “But now it is also presumed that they have an
obligation to do so ethically. On top of that there are legal
obligations, which is where the debate about regulation comes in. These
economic and legal obligations are required of business. Now they have ethical
and even philanthropic expectations as well. Failing to do well by any of these
elements affects bottom-line profitability.”
Tensions between these various
dimensions of CSR go back to Adam Smith’s examinations of the definition of a
“good business.” Explicit CSR, e.g., meeting government regulations, can be relatively
easy to demonstrate; implicit CSR, e.g., being a good neighbor to a community
that houses your business, can be much more difficult.
“Regulation certainly plays a role
in ‘explicit’ CSR,” notes Brown. “In Europe these types of regulations have
been institutionalized at the national levels. Here in the U.S., they’ve been
interpreted at the industry or firm levels, which can lead to mere ‘check
listing’ — doing the bare minimum to meet required regulations only.”
With implicit CSR, there are few if
any codified norms. Consider, says Brown, the accepted principle of good
philanthropic CSR that employees should volunteer their time in the local
community. “But how much? Where? Doing what? For how long?” she asks. “These
are tricky questions.”
CSR vs. short-term
profit
Perhaps the biggest tension in
current thinking about CSR is the abiding pressure of bottom-line profit in the
short term.
“Quarterly earnings reports are
often cited as a reason that businesses put aside their CSR obligations that
might be costly,” says Brown. “That pressure isn’t going away. In too many
situations, from environmental regulations to consumer safety and beyond, the
broader stakeholders that CSR includes are highlighted only when they’re harmed
in the name of short-term profit.”
At Bentley, Brown guides students
to become “sophisticated wielders of the CSR framework.” One approach to that
goal involves teaching Bentley students according to the framework of the UN
Global Compact’s Principles for Responsible Management Education (PRME).
Another involves working with Bentley's Alliance for Ethics & Social
Responsibility and Sustainability Office to make sure students continue to
improve their sustainability literacy.
“It’s important that Bentley
students understand the principles, applications, and implications of CSR,”
says Brown. “It’s going to be a reality in the business world they’ll inherit
and go on to shape.”
-Bently University
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