Business bashing: should corporates ‘care’?
These are said to be unprecedentedly uncertain times for business, but one area where there seems to be much certainty is that businesses need to do more than be profitable providers of goods and services: they must also do the ‘responsible’ thing, do the ‘right’ thing, for the rest of society.
It has become received wisdom that in order to restore trust, business needs to re-orientate its culture and values.
Yet is maximising profit really at odds with social good? Could the corporate social responsibility (CSR) agenda conflict with the social benefits of profit-making business? How important is trust for profitability? In a world in which government is trusted even less than business, who should decide what ‘the right thing’ means?
(Click on the image do download a flyer in PDF.)
Even the widespread adoption of CSR policies seems to do little to assuage concerns. To some people, promoting your ‘ethical’ CSR credentials can reek of hypocrisy. Sincere CSR projects can be dismissed as ‘greenwash’. When there is so little trust, can big companies ever satisfy their critics that they are doing enough?
But perhaps we should not expect businesses to ‘do good’. The urge to be socially responsible through initiatives beyond the central, profit-making purpose of a company may be missing the point about what really constitutes ‘doing the right thing’.
As Adam Smith wrote in The Wealth of Nations almost 250 years ago: ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’ In turn, the drive to create new wealth provides the resources for many other social goods, from healthcare and education to funding the arts and museums.
Note on the Battle of Ideas satellite
This debate on “corporate bashing” forms part of the Battle of Ideas (BoI) festival, initiated by the Institute of Ideas and supported by a wide range of partners including the Zurich Salon. The BoI consists of two days of high-level, thought-provoking, public debate organised by the Institute of Ideas at the Barbican in London, and a series of standalone satellite debates throughout autumn 2014 in Europe and the USA.
Recommended reading:
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It's not enough just to abide by the rules - companies are embedded in society and cannot ignore the moral dimension.
Business would like nothing better than to be acultural, asocial and amoral. The problem is that today this is simply not possible – a situation that makes many business leaders uncomfortable. -
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CSR: THE DANGERS OF ‘DOING THE RIGHT THING’
Phil Mullan in Spiked-online
Phil Mullan examines how the decline of profitability and investment has caused corporations to lose faith in their social role, leading them to embrace the idea of corporate social responsibility - at the expense of democratic accountability.
Five years after the low point of the Western financial crisis, we still see almost daily attacks on bankers’ bonuses and CEO pay levels. This idea that big payouts to business people are a key factor behind our economic troubles has become something of a ‘modern truth’; unfortunately it is one that obscures and stymies the much-needed deeper analysis and discussion of what’s really gone wrong with the Western economies. -
The Shock Doctrine
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WHY CSR IS SOCIALLY IRRESPONSIBLE
Phil Mullan in Spiked-online
Business leaders’ acquiescence, and sometimes attachment, to their CSR obligations is getting in the way of business success. In fact, if CSR was only a campaign driven by a few anti-business, anti-growth groups, then the damage to business and society would be limited. Also, if CSR were just a PR gloss on the part of business - or ‘greenwash’, as some environmentalists deride it - then it would be relatively harmless....But it is precisely because businesses themselves have adopted the CSR agenda that it has dangerous ramifications. CSR is detrimental to business for two related reasons: it distracts from what businesses should be focused on; and it undermines proper business accountability.