Potholes or profits – the modern dilemma of corporate social responsibility
- Jacques Rousseau
- 19 May 2010 06:28 (South Africa)
KFC’s recent advertising campaign, based around their stated concern to rid Johannesburg streets of potholes, brought to mind Milton Friedman’s claim that “the business of business is business”. Although there is some dispute whether the phrase should be attributed to him, the idea that private companies are there only to make money (within the bounds of the law) has never met with universal agreement. Critics assert that the power which companies wield obliges them to demonstrate social commitment, for example via financial contributions towards pothole-repair. These purported obligations are backed up by policy and legislation, such as triple bottom-line reporting and the three King reports.
But we should always be wary of letting convention, as well as law, dictate our perceptions of what words such as hypocrisy, right and wrong, moral and immoral mean. The fact that we may prefer the world to look a certain way, and for companies and individuals to act in accordance with those preferences, does not mean that they are obliged to do so – or that they are morally negligent when they don’t.
There is a large set of expected standards, both for individuals and corporate entities. Sometimes, these are prescribed by law, and sometimes by social conventions such as culture and religion. Conforming to these (minimum) standards means that you are not doing wrong – leaving aside the question of whether those standards are, or ever were the right ones.
Then, we sometimes perform actions that go beyond these minimum expectations. Moral philosophy calls these actions “supererogatory”, and they are actions that go above and beyond the call of duty. For many thinkers, actions that fall beneath these minimum standards are blameworthy. The same symmetry does not hold for doing what is expected by those standards, as these actions are morally neutral. Only doing more that what the minimal standards require would be morally praiseworthy.
The question then is: Is it right for us to expect companies to contribute to society beyond the contributions they already make via taxes, the provision of goods and services and employment? The conventions of corporate social responsibility say yes, but that does not oblige us to agree with those expectations. So let us briefly reconsider the matter, disregarding existing conventions and standards that may perhaps be ill-conceived.
At one extreme, some would like to argue that organisations cannot be moral agents. On this view, only individuals can serve as moral agents and, therefore, only individuals can be praised or blamed for their actions. But given that corporate entities do have legal powers in their own right – and also that they are able to contribute to both the harm and benefit of other legal entities (persons, companies and states) – it seems plausible to suggest that organisations can be moral agents.
If so, does being socially responsible mean that the corporation’s actions must not harm other moral agents, or does it mean that the corporation’s actions should benefit them? The important underlying question here is this: Regardless of our answer to the benefit-versus-harm-avoidance issue, should we hold corporations to different standards than we do the average citizen?
I would say no, we should not. Corporations should certainly act in a way consistent with established laws and policy, and be punished when they don’t. That punishment can take the form of legal censure, or it can take the form of reputational damage and the loss of income that may accrue. And analogously to individual citizens, they deserve praise for truly supererogatory actions.
Here, of course, lies another tricky issue. Most corporate social investment may well just be a smug form of PR, in that, because society now expects corporations to be “good”, making efforts to appear so have to form part of your corporate strategy. Corporations who are good may attract better workers, a larger market share and, in some cases, even regulatory advantage. But corporations might not – and may never have – actually cared. And here we can respond by saying “So what?” We still gain advantage from their “good” deeds, regardless of the fact that their underlying motivation might have been completely amoral (and that anyone who expected otherwise might be considered a trifle naïve).
So, whether we like it or not, a company has to appear socially responsible to compete, in that the moral climate now demands CSI. This is in spite of the fact that champions of CSR don’t necessarily do better financially as a result (Marks & Spencer and Starbucks are good examples of this), and also in spite of the unclear causal connection between CSI and improved financial performance. In other words, in cases where CSI correlates with increased profitability, we don’t yet know whether increased profits lead to more CSI, or whether increased CSI leads to more profits.
Regardless of this, we can – and should – ask whether we’re requiring the right people to do the job of building schools, providing bursaries or fixing potholes. Also, whether we’re blaming the right people when these things fail to happen – or when corporate efforts to make them happen are stymied. This is because the core business of companies already provides significant contributions to public welfare.
At a fundamental level, they provide employment and contribute to (sometimes theoretical) social upliftment through how government spends tax revenue. They may provide educational opportunities for their staff, which though self-serving, still benefit those individuals. Most importantly, they compete to provide us with goods and services at an attractive enough price that we are inclined to buy them (monopolies and the like notwithstanding).
But they are not experts in social engineering, or more generally in the details of where interventions to public welfare would be most efficient and helpful. In fact, asking corporations to take on these roles creates a significant inefficiency, in that they already have a job, at which they are skilled and tend to do well – making profit. We make that job more difficult by asking them to perform functions at which they are not skilled.
Then, we can tax that profit – even perhaps more than we already do – and use that revenue for public good. Those best suited to contributing to that public good are those with the broadest knowledge of where interventions are required, namely government.
And this, then, is the key moral issue we tend to forget when talking about CSI: It is the government’s job to look after public welfare. We are letting them evade that responsibility by shifting part of the burden onto corporations, who are to a large extent already doing their part simply via chasing profit.
Of course, companies can choose to trade potential profits for expenditure towards social benefits, but they are under no obligation to do so. Customers can then choose whether they want to support companies that do this, or not. But to insist that all companies share your value system, and should be punished via negative sentiment when they simply go about their core business – or when their attempts at CSI are revealed as inefficient or insincere – is too arrogant for my tastes.
If companies did all that the chattering classes demanded of them – building schools, donating to charities, paying inflated wages and the like – they would certainly fail to be profitable. And then, they would cease to exist. So unless those who demand CSI can offer us a principled, rank-ordered list of priorities that corporations should contribute to, we must assume that they should be free to contribute to none of them, or to whichever they choose.
Traditionally, they have chosen to increase their profits while operating within the bounds of law. Most of us (at least, those who are reading this) have jobs as a result. Those of us who do not have jobs should blame government or simple moral luck – but it makes no sense to blame employers, who might even be able to hire more people if they weren’t spending their money on fixing potholes, simply because we have a misguided desire for them to do so.
While a bad reputation has never been so expensive, we should recall that reputational damage can be caused by both malfeasance, as well as by the expectations of a sensationalist moral myopia that teaches people to expect more than what is reasonable from corporations.
- Homophobia and the politics of outrage
- Please look after the place while I’m gone.
- Parliament – where dead sheep savage one another
- ‘Catholic’ and ‘Muslim’ South Africa
- Free speech doesn’t guarantee an audience
- So atheists are people too?
- A culture of dying
- Deciding when to die
- Minds are what brains do
- So what are universities for?
- Mantashe wants to help you 'Know your DA'
- Hey, teacher, leave them kids alone!
- UCT, race, and the seductive moral outrage machine
- The sound and fury of sanctimony
- Burn the witch!
- Not even Madiba can turn anecdotes into data
- Pornography is coming to eat your children
- Do you know what’s good for you?
- #We Say Enough
- Talking about risk-mitigation is not (always) victim blaming
- Can Frankensalmon triumph over uninformed ad-hoc opinions?
- You can leave your hat on
- If performance-enhancing drugs are bad, let's ban high-fibre cereal too.
- Blood deferrals: Too important to take personally
- The world according to Zuma - and the trouble with 'culture'
- A free market in false choices
- I, for one, welcome our robot overlords
- Debate is the key
- Been there? Got the T-shirt? Think carefully before you wear it...
- You are what you tweet
- Body language: Freedom confronts respect in Body Worlds human forms
- Choose wisely: Mourdock, rape and targeted outrage
- Birds of a feather...philosophise together?
- So who owns oppression, really?
- Help, not demonisation, will stem child abuse
- More about trolls
- Please do not feed the trolls
- Affirmative action: Equity does not come with voting rights alone
- SAA's cadet programme: The sky isn't falling
- South Africa: Why do you make me hate you?
- SA & religion: Eyes wide shut
- Freedom of speech & freedom of abuse
- Is free speech fried in Chick-fil-A debate?
- Colorado killings: there's no comfort in the absurd
- Let's try to avoid drive-by charity on Mandela Day
- First do no harm
- The cutting edge of religion
- Public holidays: positive discrimination?
- The new discrimination – against men
- Censorship: The chilling effect
- Health Warning: You may not smoke, but you can eat yourself to death
- 'I see a red door and I want it painted black'
- Freedom of speech; oh, perish the thought
- Homophobia trending among traditional leaders
- How to meat friends and influence people
- How to meat friends and influence people
- Still hunting, still gathering
- Dogmatix isn't only a canine in the Asterix comic books
- Exactly Whose Humanity is Vanishing?
- Tim Noakes on carbohydrates - fad or fact?
- Mind over matter – and knowing the difference
- Don't PIN your freedoms to Icasa's apron strings
- Killing the messenger never silences the message
- The unbearable rightness of maybe being wrong
- The worrisome worth of foregone conclusions
- The tyranny of labels
- Staring into the abyss of ‘special privileges’
- Twitter censorship, the Streisand Effect and three fingers pointing back
- Free speech is good - but not in my back yard
- Abortion - the great conceptual conundrum
- Killing live animals to talk to dead people is bull
- Stalking votes with over-the-counter vetoes
- Always look on the One side of life
- Get Tested: Get off the entitlement horses and give it a chance
- The Lotters, Harry Potter and SA's judicial system
- The haunting of Helen Zille
- The Great T-Shirt Debate that went horribly wrong
- M&M & the media – playing the ball or the men?
- Twitter - fast food for ever-fattening egos
- How Occupy Wall Street became Pick a Protest
- Steve Jobs was just a man
- What are you?
- Who did ET really call? Woo-woo fest at Wits might have the answer
- How to strut like a slut and itch like a bitch
- The world according to reader feedback
- To judge or not to judge; that is the Mogoeng
- 'A Boy Named Sue' and a victim named 'slut'
- How to bake the perfect humble pie
- How to win friends and influence the irrational
- See what I mean? Or maybe you don't...
- Separating sense from nonsense
- Racial nationalism - the silliest disease of them all
- Sticks and stones may break my bones, but words can rip my soul
- Just catch the next feminist wave
- That's right - tertiary education is a privilege, not a right
- The conundrum of university - level remedial education - where do we start?
- The immense value of the egghead
- If ridicule be the right remedy, mock on
- Racism, put on your ballot-proof vest
- It was the lizard on the grassy knoll
- Of unenclosed toilets and enclosed ballot booths
- Our responsibility to build a better 'Bill'
- It's the Singer, not the Song
- Trapped in an abusive relationship? Dial 0800-VOTE
- Hate speech and hateful words - there is a difference
- Why the Bill of Responsibilities doesn't make the grade
- Natural selection and principled prejudice
- The Orwellian horror of a world without grammar
- Beware the Jabberwock
- Ya don’t learn nuffink by shutting others up
- U2, Brute!
- Unfollowing the defriended is like delisting the unlikeable
- There's something fishy about Kenny and his critics
- Astrology - the gullible's travails are written in the stars
- Dr Woo and the Silicon Snake-oil Bangle Sellers
- Life, liberty and the pursuit of dignity
- Who wants to be African anyway?
- The Beatles warned you, Mr President
- Annelie Botes, racism, moralistic awards 'n all
- The silence of the racists
- The proof of the pudding
- Freedom is a fragile thing
- The conditionality of morality
- Of guillotines, smoking, kissing children and scientific proof
- Why moral absolutism hasn't done so well
- The moral arrogance of relativism
- The dilemma of being special in a world of special people
- Of burning closets and closed minds
- Is Internet making us stoopid commenters?
- To be, or not to be serious
- Stepping into greyer shades of grey
- Books and beliefs and other burning issues
- Talking of Hawking and thinking of God
- ‘You may be wrong for all I know, but you may be right’
- The unbearable triteness of best-selling BS
- The struggle for true freedom is with us more than ever
- It’s silly to take a penknife to a gunfight
- Tell me lies, tell me sweet little morally questionable falsehoods
- I think therefore I am … at least I think so
- First, do no harm
- All rights are equal – or should be
- Beauty and the beastly behaviour
- Afrighana versus United States of North America – a continental dilemma
- Of shoes and ships and sealing wax – the multiple tasks of multi-tasking
- Blow the vuvuzela and blow the cultural argument
- Roll up! Roll up! Welcome to the World Cup!
- Thought police, never a good thing
- The redemptive nature of offence
- Potholes or profits – the modern dilemma of corporate social responsibility
- Too many cows, too few tuna and too big an appetite
- Press freedom’s value is in our capacity to take part
- Of uncertainty and the opinions it spawns
- Just another brick in the wall
- Playing the authenticity card
- The dangers of tolerance
- ‘Twas Easter and the slithey toves did gyre and gimble on the roads
- Julius is The Man
- Beware the orthorexics as you chomp down on your boerie-roll
- Freedom of (Multi)choice
- Let's talk about our moral code