Against corporate social responsibility – CSR

Several years ago I was surveyed by a Chamber of Commerce about the Corporate Social Responsibility policies at PMR, the company I then led. I found so annoying one of the questions “what steps do you take to ensure your staff take part in CSR activities?” that I wrote a CSR policy on the spot. I dislike the idea of compulsory CSR very much. Compulsory good behaviour is as idiotic as the compulsory happiness of Monty Python’s Happy Valley

Beyond this, there are more fundamental issues like the business being a “good” business. I had a few years earlier had a business fiasco where I was the major shareholder in a company that went bust, while supporting a development project in Indonesia. With advice from some staff members,

“PMR is supportive of individual and group efforts of staff to contribute more than their job and the law requires both to the societies in which we operate and the company as a whole. We believe that company resources can provide an effective channel with benefits to people and institutions outside the company and that through doing this both the company and the wider community can gain.

This CSR policy is not about looking good. We mean it. First and foremost.

PMR aims to be a profitable and successful company

In order to fund Corporate Social Responsibility, the company has to be successful, in terms of looking after our clients well, having attractive working conditions for staff, making profits and paying our taxes(1). To give money away we have to be making it and our primary responsibility is to be profitable. It would be irresponsible for management and staff to focus attention on the wider community if the fundamental raison d’etre of the business is not being successfully executed 2. If we don’t look after ourselves then we can’t look after other people, even if we want to.

CSR is not compulsory for our staff

We say “mozesz nie musisz” (Polish “you can but you don’t have to”) with respect to voluntary activities. We don’t want an atmosphere where people are involved in CSR because they feel they have to. Being a “good citizen” is an active choice that individuals can take according to their own consciences and the company will not require participation in CSR activities. PMR policy is to let staff choose whether to get involved. If a member of staff does an outstanding job, but keep his or her private time for their own activities, that is completely acceptable. If a member of staff wants to contribute their own time and resources to a CSR project, it is quite likely that the company will make a matching contribution, in cash or kind. People acting under their own initiative are far more likely to be committed to what they are doing, and the company does not waste time supporting things nobody cares about, just to “look good”.

PMR has four CSR pledges:

That we will act ethically in all areas of our business, aware of the effect we have on all our stakeholders in the work we undertake.
That, where appropriate, company resources will be made available to support programs initiated by members of staff aimed at benefiting the wider community and environment. This can take the form of corporate support for employee giving, corporate support for employee volunteering and corporate giving.
That we will work to ensure a safe, enjoyable and tolerant workplace with equal opportunities for all our employees.
We welcome any initiatives that reduce our energy consumption or cut waste.

To help deliver on these pledges, PMR runs a suggestions scheme on its intranet which is reviewed by the management through which suggestions (about CSR or anything else) can be made. Staff can initiate ideas on their own at any time they like.
In the past, PMR staff have been supportive of:

links between business and education, fostering entrepreneurship and business awareness in Schools and Universities
public speaking initiatives (helping found Toastmasters in Cracow)
sponsoring educational summer school events/parties
children’s and families’ charities.

Some things we support, like joining and supporting a local frisbee club are more a a fun community thing to do than a “worthy cause”. We are not bothered about definitions.

CSR at PMR is bound to evolve as the firm grows, particularly under the influence of the rapidly increasing number of staff from different parts of the world and the ideas that they bring. New ideas (from staff or anyone else reading this document) are always welcome.

Advertisements

About richardhlucas

business and social entrepreneur pl.linkedin.com/in/richardhlucas
This entry was posted in Uncategorized. Bookmark the permalink.

One Response to Against corporate social responsibility – CSR

  1. dk says:

    M. Friedman (1970) claim that the social responsibility of a business is to maximise profits for its shareholders, which is probably not what we would think is a business’ corporate social responsibility. To act honestly and abiding by the law are some of the constraints that a business needs to consider when deciding on business practices.

    Friedman asked the question “what if the countries laws are not strong, is it okay for businesses to take advantage of this?,” and gives us the following example “e.g. if a company can get a local council to grant them permission to discharge untreated waste into a river at a level that may pose some risk to the downstream village.”

    My understanding of profit maximisation is for business managers’ to increase all stakeholders’ interest within the business, whilst acting ethically and respecting the laws of the country. Therefore the manager’s duty of care is to their shareholders, the environment, suppliers, customers, employees and the local community. Stakeholders are those who have a stake in an organisation. This means they have an interest in the business, and they can be affected by the organisation’s actions.

    When looking at what R. Lucas introduced in his blog is that he dislikes compulsory corporate social responsibility for the following reasons:
    • “In order to fund Corporate Social Responsibility, the company has to be successful, in terms of looking after our clients well, having attractive working conditions for staff, making profits and paying our taxes(1).” (Lucas.R, 2011)
    • “To give money away we have to be making it and our primary responsibility is to be profitable. It would be irresponsible for management and staff to focus attention on the wider community if the fundamental raison d’etre of the business is not being successfully executed (2).” (Lucas.R, 2011)
    Both points address Friedman’s theory that the company should take care of the stakeholder’s interests and profit maximisation. However Lucas approaches CSR as a result of profit and not as a benefit for profit.

    As a leading member of PMR Lucas approached CSR by creating four pledges to overcome compulsory CSR policies:
    1 “That we will act ethically in all areas of our business, aware of the effect we have on all our stakeholders in the work we undertake.”
    2 “That, where appropriate, company resources will be made available to support programs initiated by members of staff aimed at benefiting the wider community and environment. “
    3 “That we will work to ensure a safe, enjoyable and tolerant workplace with equal opportunities for all our employees.”
    4 “We welcome any initiatives that reduce energy consumption or cut waste.” (Lucas.R, 2011)

    Rules do not make a person or a company good. It is a person or a company’s ethical and moral standards that makes them good or bad. Lucas’ pledges wants the staff to be involved in CSR out of their own free will and not make it compulsory for them to be involved. I believe that his reason for this is that staff will be much more committed to their own ideas.

    My understanding of CSR is that the company must focus on creating a profit for the shareholder while considering all stakeholders. The company must have good business ethics, moral standing and operate within the law. The company must create a friendly work environment that will encourage staff to be involved in the initiatives of the company. As opposed to Lucas’ view on CSR I believe that all staff should be involved in CSR activities. However staff should be able to choose their field of participation. For example company X has 130 staff members but only 3 employees are involved in CSR. The company grow due to the hard work of the 3 staff members. All 130 staff members get bonuses after a year. Is that fair? By creating a CSR policy it ensures that all staff will be involved in CSR and if there is benefit to the company and employees (stakeholders) then everybody will receive the benefit.

    I agree with the blogger that the company must act ethically, be aware of the effects on all stakeholders in work undertaken, to make company resources available to CSR programs and that the company will create a safe, enjoyable and tolerant workplace with equal opportunities for all employees. The company should also be profitable to allow the company can spend money on specific initiatives of CSR. However I do not agree with Lucas that it should not be a policy, because in my opinion, if it is not a rule it will be difficult to get people involved in companies’ initiatives in CSR.

    In conclusion I believe CSR is very important and should be implemented in all companies. CSR policies ensure that a company takes into consideration all stakeholders. Stakeholders to be considered in creating profit for the shareholders are the shareholders, environment, local community, suppliers, customers and staff members. A CSR policy will set out clear guide lines how staff should act and treat stakeholders in the business.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s