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Friday, October 27, 2017

Strategic CSR - Corporate 'Stakeholder' Responsibility

The article in the url below demonstrates vividly a core tenet of Strategic CSR and the difference between CSR in theory and practice:
"On the list of companies I dislike, Amazon ranks near the top, for putting bookstores out of business everywhere and destroying the ability of authors and publishers to earn a living. Having fed itself to monstrous size on such small potatoes, the company has now moved on to gut the rest of Main Street retail and cut the heart out of communities everywhere. And yet I shop at Amazon. My lame excuse is that it's now a 25-minute drive to the nearest independent bookstore, it's convenient to have a book turn up at my door, and the price looks right."
This basic hypocrisy is rampant because it is core to who we are as human beings (for recent examples, see: Strategic CSR – Uber and Strategic CSR – United). We are compelled to say we support something that seems like the 'right' or 'popular' thing to do, but then surreptitiously do the opposite if it benefits us. In making his point, the author quotes recent research that captures this phenomenon empirically:
"This inconsistency isn't just an issue for left-leaners like me. Starbucks faced a right-wing boycott early this year when it responded to President Trump's immigration ban with a pledge to hire 10,000 refugees. But new research by Brayden King at Northwestern University's Kellogg School of Management shows 'zero correlation' between public commitments to that boycott and subsequent purchasing behavior by pro-Trump consumers. That is, our failure to vote with our wallets crosses political lines. Withholding our cash from companies that cause harm or behave badly is one of the few avenues of protest we have as consumers. So why are we so bad at boycotting?"
In Strategic CSR, I discuss this effect of individuals professing to support a social good, but in fact seeking individual benefit, via the concept of 'corporate stakeholder responsibility' (4e, Chapter 5). That is, it is up to us, all of us as stakeholders, to hold firms to account for the behavior we truly want them to demonstrate. We are all (collectively) stakeholders who interact with firms in different guises – as consumers, employees, journalists, regulators, suppliers, distributors, and so on. It is pointless for us to deceive ourselves by saying, as this author does, that we dislike Amazon, but then renew our subscription to Prime. If we truly value what Amazon has to offer (and, clearly, we do as a society), then we either have to embrace that or, if we really want something different, then sacrifice some of the value Amazon offers and, instead, support a different company. One of the many problems with the majority of the CSR debate is that it does not account for the hypocrisy that drives much human behavior. For example, I could stand out on the corner of the street and ask everyone who passes whether they approve of sweatshops. My guess is that I would get a large majority who say they do not, but that most of those people are happy to benefit from the fast fashion industry, which is able to deliver clothes to them at ridiculously cheap prices because of the sweatshops that are an integral part of the global supply chain. But, it is not only consumers. For example, it is no good for the government to pass a law and then fail to enforce it; it is no good for the media to fail to investigate corporate wrongdoing, and so on. If we are going to make a more sustainable economy/society, we first need to acknowledge how the 'system' works in reality. Then, if we want to, we can start doing something about it. The worst situation is to misunderstand the causes of the problems we worry about. If we kid ourselves as to the causes, we have no chance of building something better.
Have a good weekend
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Why we don't vote with our wallets
By Richard Conniff
October 22, 2017
The New York Times
Late Edition – Final