The article in the url below is a report about the level and nature of “eco-friendly claims” in the advertising industry (Issues: Advertising, p151; Brands, p153). While the environment was the focus of attention at the 2007 International Advertising Festival at Cannes, in 2008 this issue was pushed to the background:
“… Mr. Gore was nowhere to be found, and the party buzz was about the American presidential election, the Euro 2008 soccer tournament and even the business of advertising itself. Green marketing, while booming, had lost some of its cachet.”
The article argues that this is largely due to greenwashing by firms that overreach in their environmental claims, which has resulted in a negative reaction and increasing skepticism among consumers:
“The sheer volume of these ads -- and the flimsiness of many of their claims -- seems to have shot the messenger. At best, it has led consumers to feel apathetic toward the green claims or, at worst, even hostile and suspicious of them.”
This growing consumer backlash/disillusionment is measured in terms of complaints submitted to various national advertising standards organizations:
“The Advertising Standards Authority, an industry-financed group that monitors ad content in Britain, said it had received 561 complaints from consumers about green claims in 410 ads in 2007, up from 117 complaints about 83 ads the year before. The European Advertising Standards Alliance, an umbrella group for similar organizations across Europe, reported sizable increases in complaints in other countries, including in Belgium and the Netherlands, particularly involving automotive advertising.”
To the extent that firms perceive CSR to be a fad to which they need to pay lip-service, while minimizing their level of substantive action, the danger facing the CSR community seems twofold. First, if firms do not genuinely believe that CSR provides them with a competitive advantage, they are more likely to make claims that are not supported on closer inspection. And, second, especially in a deteriorating economic environment, the CSR department/budget in such firms is more likely to be cut back. Either way, the economic downturn and the idea that CSR is a fad whose time will pass are significant threats to the gains made in recent years.
Take care
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Cooling Off on Dubious Eco-Friendly Claims
By ERIC PFANNER
883 words
18 July 2008
The New York Times
Late Edition - Final
3
http://www.nytimes.com/2008/07/18/business/media/18adco.html
Monday, February 16, 2009
Friday, February 13, 2009
Strategic CSR - Greed
The article in the url below presents an admirable defense of ‘greed.’ The author argues that ‘greed’ is a relative term that is easy to identify in excess, but much harder at points in-between:
“Over the last three decades, the average compensation for chief executives of major American corporations has gone from 35 times the average pay of American workers to 275 times. That increase, it is suggested, or at least implied, constitutes greed. But what if the increase had ''only'' been to 100 times? Would that have signaled greed? What about 50 times? And why wasn't 35 times itself a sign of greed?”
The focus of the article is the argument that by applying the label ‘greed’ to actions that are really only self-interest (i.e., by equating the two), we are ignoring the economic benefits that self-interest and the pursuit of profit bring, while diminishing the power of the accusation of ‘greed’:
“Economics has given us a lot of better words, from self-interest to incentive to profit. They do not mean the same thing as greed, but they have displaced it, obscured it -- and certainly demoted it from being a deadly sin.”
Have a good weekend.
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Modern Market Thinking Has Devalued a Deadly Sin
By PETER STEINFELS
969 words
27 September 2008
The New York Times
Late Edition - Final
19
http://www.nytimes.com/2008/09/27/us/27beliefs.html
“Over the last three decades, the average compensation for chief executives of major American corporations has gone from 35 times the average pay of American workers to 275 times. That increase, it is suggested, or at least implied, constitutes greed. But what if the increase had ''only'' been to 100 times? Would that have signaled greed? What about 50 times? And why wasn't 35 times itself a sign of greed?”
The focus of the article is the argument that by applying the label ‘greed’ to actions that are really only self-interest (i.e., by equating the two), we are ignoring the economic benefits that self-interest and the pursuit of profit bring, while diminishing the power of the accusation of ‘greed’:
“Economics has given us a lot of better words, from self-interest to incentive to profit. They do not mean the same thing as greed, but they have displaced it, obscured it -- and certainly demoted it from being a deadly sin.”
Have a good weekend.
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Modern Market Thinking Has Devalued a Deadly Sin
By PETER STEINFELS
969 words
27 September 2008
The New York Times
Late Edition - Final
19
http://www.nytimes.com/2008/09/27/us/27beliefs.html
Wednesday, February 11, 2009
Strategic CSR - Zimbabwe
The article in the url below outlines the difficult decisions faced by firms operating in a country when world opinion moves in favor of sanctions and pressure on multi-nationals to withdraw (Issues: Cultural Conflict, p160; Companies Trying to Do CSR Well: Shell, p302):
“Doing business with Zimbabwe at a time when the world's media are showing the violent suppression of dissent can damage their reputations - as many found during the apartheid years in South Africa. Yet withdrawal could hurt ordinary people while having little impact on the government - and might delay recovery when democracy is eventually restored.”
The article cites a number of examples of western firms that provide meaningful employment to hundreds of Zimbabweans. The UK supermarket, Waitrose, for example, imports fish that are fair- trade certified from its Zimbabwe supplier. This firm:
“… employs 450 people, paying them "substantially more" than the minimum basic wage, according to Waitrose. They are also given other cash allowances, free lunches and HIV/Aids support, with medical insurance and membership of pension schemes for permanent employees.”
The article also raises the difficult case of the mining firm Anglo-American, which is currently investing in Zimbabwe to establish a platinum mine. As one source is quoted as saying, withdrawal represents:
"gesture politics . . . If Anglo American pulled out, their shoes would be filled very quickly by the Chinese. The precedent was set in Sudan, where the Chinese moved in after the imposition of western sanctions."
Ultimately, continued involvement legitimizes the current administration and, while life remains bearable for ordinary people, there is little hope of bottom-up regime change. On the other hand, however, withdrawal can cause real pain and can hamper recovery once change occurs. The ‘best’ decision is not apparent and, unfortunately, media coverage tends toward the emotional, rather than helping make the ‘best’ decision for those most affected—in this case, the Zimbabwean people.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Mangetout and Mugabe; Multinationals wrestle with their Zimbabwe role
By John Willman, Business Editor
1469 words
5 July 2008
Financial Times
Asia Ed1
10
http://www.ft.com/cms/s/0/6b315526-49fb-11dd-891a-000077b07658,dwp_uuid=70bd196c-ffc3-11dc-825a-000077b07658.html
“Doing business with Zimbabwe at a time when the world's media are showing the violent suppression of dissent can damage their reputations - as many found during the apartheid years in South Africa. Yet withdrawal could hurt ordinary people while having little impact on the government - and might delay recovery when democracy is eventually restored.”
The article cites a number of examples of western firms that provide meaningful employment to hundreds of Zimbabweans. The UK supermarket, Waitrose, for example, imports fish that are fair- trade certified from its Zimbabwe supplier. This firm:
“… employs 450 people, paying them "substantially more" than the minimum basic wage, according to Waitrose. They are also given other cash allowances, free lunches and HIV/Aids support, with medical insurance and membership of pension schemes for permanent employees.”
The article also raises the difficult case of the mining firm Anglo-American, which is currently investing in Zimbabwe to establish a platinum mine. As one source is quoted as saying, withdrawal represents:
"gesture politics . . . If Anglo American pulled out, their shoes would be filled very quickly by the Chinese. The precedent was set in Sudan, where the Chinese moved in after the imposition of western sanctions."
Ultimately, continued involvement legitimizes the current administration and, while life remains bearable for ordinary people, there is little hope of bottom-up regime change. On the other hand, however, withdrawal can cause real pain and can hamper recovery once change occurs. The ‘best’ decision is not apparent and, unfortunately, media coverage tends toward the emotional, rather than helping make the ‘best’ decision for those most affected—in this case, the Zimbabwean people.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Mangetout and Mugabe; Multinationals wrestle with their Zimbabwe role
By John Willman, Business Editor
1469 words
5 July 2008
Financial Times
Asia Ed1
10
http://www.ft.com/cms/s/0/6b315526-49fb-11dd-891a-000077b07658,dwp_uuid=70bd196c-ffc3-11dc-825a-000077b07658.html
Monday, February 9, 2009
Strategic CSR - Companies and NGOs
The article in the url below maps out the advantages and disadvantages, for both sides, of alliances between NGOs and corporations (Issues: NGO and Corporate Cooperation, p192). On the one hand:
“What is in it for the companies? First, contact with NGOs provides intelligence. … Second, company executives have their own values; many privately agree with NGOs. … Third, companies think a relationship with an NGO gives them a seal of approval.”
On the other hand:
“What is in it for the NGOs? This one is simple: companies donate money. They also deliver. They have staff around the world, they operate across borders and have technical expertise.”
In terms of disadvantages:
“… there are dangers on both sides. Both companies and NGOs have reputations to protect.”
The interesting point that emerges from the article, however, is the recognition by both sides that the answer to any given problem lies within either corporations and/or NGOs. Government is viewed as an ineffective partner, at best, and an impediment to progress, at worst. This is particularly felt to be the case in tackling international issues. The article’s author, however, makes the point that the fact that corporations and NGOs increasingly have to take on responsibilities that previously would have been dealt with by governments is cause for concern:
“… because neither companies nor NGOs formally answer to us as citizens.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Why companies and campaigners collaborate
Skapinker, Michael
822 words
8 July 2008
Financial Times
Asia Ed1
11
http://us.ft.com/ftgateway/superpage.ft?news_id=fto070720081430478718
“What is in it for the companies? First, contact with NGOs provides intelligence. … Second, company executives have their own values; many privately agree with NGOs. … Third, companies think a relationship with an NGO gives them a seal of approval.”
On the other hand:
“What is in it for the NGOs? This one is simple: companies donate money. They also deliver. They have staff around the world, they operate across borders and have technical expertise.”
In terms of disadvantages:
“… there are dangers on both sides. Both companies and NGOs have reputations to protect.”
The interesting point that emerges from the article, however, is the recognition by both sides that the answer to any given problem lies within either corporations and/or NGOs. Government is viewed as an ineffective partner, at best, and an impediment to progress, at worst. This is particularly felt to be the case in tackling international issues. The article’s author, however, makes the point that the fact that corporations and NGOs increasingly have to take on responsibilities that previously would have been dealt with by governments is cause for concern:
“… because neither companies nor NGOs formally answer to us as citizens.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Why companies and campaigners collaborate
Skapinker, Michael
822 words
8 July 2008
Financial Times
Asia Ed1
11
http://us.ft.com/ftgateway/superpage.ft?news_id=fto070720081430478718
Friday, February 6, 2009
Strategic CSR - 10 Worst Corporations of 2008
The article in the url link below undoubtedly presents a subjective view of the corporate world, but it also makes for interesting reading:
“As we compiled the Multinational Monitor list of the 10 Worst Corporations of 2008, it would have been easy to restrict the awardees to Wall Street firms. But the rest of the corporate sector was not on good behavior during 2008 either, and we didn't want them to escape justified scrutiny.”
Identifying the Top 10 firms in any category, by definition, reflects the biases of the people doing the ranking (and CorpWatch certainly has its biases), but it is also hard to defend the actions highlighted in the article. One example:
“In 2001, Chevron swallowed up Texaco. It was happy to absorb the revenue streams. It has been less willing to take responsibility for Texaco's ecological and human rights abuses. In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco over a 20-year period had poisoned the land where they live and the waterways on which they rely … . Chevron had the case thrown out of U.S. courts, on the grounds that it should be litigated in Ecuador, closer to where the alleged harms occurred. But now the case is going badly for Chevron in Ecuador -- Chevron may be liable for more than $7 billion. So, the company is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.”
Have a good weekend
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
The 10 Worst Corporations of 2008
January 9th, 2009
What a year for corporate criminality and malfeasance!
http://www.corpwatch.org/article.php?id=15275
“As we compiled the Multinational Monitor list of the 10 Worst Corporations of 2008, it would have been easy to restrict the awardees to Wall Street firms. But the rest of the corporate sector was not on good behavior during 2008 either, and we didn't want them to escape justified scrutiny.”
Identifying the Top 10 firms in any category, by definition, reflects the biases of the people doing the ranking (and CorpWatch certainly has its biases), but it is also hard to defend the actions highlighted in the article. One example:
“In 2001, Chevron swallowed up Texaco. It was happy to absorb the revenue streams. It has been less willing to take responsibility for Texaco's ecological and human rights abuses. In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco over a 20-year period had poisoned the land where they live and the waterways on which they rely … . Chevron had the case thrown out of U.S. courts, on the grounds that it should be litigated in Ecuador, closer to where the alleged harms occurred. But now the case is going badly for Chevron in Ecuador -- Chevron may be liable for more than $7 billion. So, the company is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.”
Have a good weekend
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
The 10 Worst Corporations of 2008
January 9th, 2009
What a year for corporate criminality and malfeasance!
http://www.corpwatch.org/article.php?id=15275
Wednesday, February 4, 2009
Strategic CSR - Chemicals
The article in the url link below provides an update on the implementation of the EU legislation REACH (Issues: Research and Development, p130). The legislation presents a distinctly different approach to product safety, in general, and chemicals, in particular, than the current U.S. model. While the burden in the U.S. lies with objectors to prove a chemical is dangerous, the EU legislation requires producers to prove a chemical is safe before it will be approved for use in certain kinds of products:
“The changes come at a time when consumers are increasingly worried about the long-term consequences of chemical exposure and are agitating for more aggressive regulation. In the United States, these pressures have spurred efforts in Congress and some state legislatures to pass laws that would circumvent the laborious federal regulatory process.”
Needless to say, U.S. firms (in particular) are protesting the measures which, they claim, “will add billions to their costs.” In many respects, however, the legislation, which will be phased in over a number of years, is already having its desired effect:
“It is difficult to know exactly how the changes will affect products sold in the United States. But American manufacturers are already searching for safer alternatives to chemicals used to make thousands of consumer goods, from bike helmets to shower curtains.”
The article argues that the legislation represents a fundamentally different philosophical approach between the U.S. and Europe regarding the role of for-profit firms in society:
“From its crackdown on antitrust practices in the computer industry to its rigorous protection of consumer privacy, the European Union has adopted a regulatory philosophy that emphasizes the consumer. Its approach to managing chemical risks, which started with a trickle of individual bans and has swelled into a wave, is part of a European focus on caution when it comes to health and the environment.”
In the U.S., on the other hand:
“… laws in place for three decades have made banning or restricting chemicals extremely difficult. The nation's chemical policy, the Toxic Substances Control Act of 1976, grandfathered in about 62,000 chemicals then in commercial use. Chemicals developed after the law's passage did not have to be tested for safety. Instead, companies were asked to report toxicity information to the government, which would decide if additional tests were needed. In more than 30 years, the Environmental Protection Agency has required additional studies for about 200 chemicals, a fraction of the 80,000 chemicals that are part of the U.S. market. … The EPA has banned only five chemicals since 1976.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Chemical Law Has Global Impact
by Lyndsey Layton, Washington Post
June 12th, 2008
http://www.corpwatch.org/article.php?id=15092
“The changes come at a time when consumers are increasingly worried about the long-term consequences of chemical exposure and are agitating for more aggressive regulation. In the United States, these pressures have spurred efforts in Congress and some state legislatures to pass laws that would circumvent the laborious federal regulatory process.”
Needless to say, U.S. firms (in particular) are protesting the measures which, they claim, “will add billions to their costs.” In many respects, however, the legislation, which will be phased in over a number of years, is already having its desired effect:
“It is difficult to know exactly how the changes will affect products sold in the United States. But American manufacturers are already searching for safer alternatives to chemicals used to make thousands of consumer goods, from bike helmets to shower curtains.”
The article argues that the legislation represents a fundamentally different philosophical approach between the U.S. and Europe regarding the role of for-profit firms in society:
“From its crackdown on antitrust practices in the computer industry to its rigorous protection of consumer privacy, the European Union has adopted a regulatory philosophy that emphasizes the consumer. Its approach to managing chemical risks, which started with a trickle of individual bans and has swelled into a wave, is part of a European focus on caution when it comes to health and the environment.”
In the U.S., on the other hand:
“… laws in place for three decades have made banning or restricting chemicals extremely difficult. The nation's chemical policy, the Toxic Substances Control Act of 1976, grandfathered in about 62,000 chemicals then in commercial use. Chemicals developed after the law's passage did not have to be tested for safety. Instead, companies were asked to report toxicity information to the government, which would decide if additional tests were needed. In more than 30 years, the Environmental Protection Agency has required additional studies for about 200 chemicals, a fraction of the 80,000 chemicals that are part of the U.S. market. … The EPA has banned only five chemicals since 1976.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Chemical Law Has Global Impact
by Lyndsey Layton, Washington Post
June 12th, 2008
http://www.corpwatch.org/article.php?id=15092
Monday, February 2, 2009
Strategic CSR - Recycling
The article in the url below demonstrates the potential danger to the CSR debate in the face of an economic recession:
“Trash has crashed. The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals.”
The corresponding wild fluctuation in the market price for specific recycled materials mean that it is sometimes cheaper for firms to dispose of them (to avoid storage costs), than sell them on the market:
“On the West Coast, for example, mixed paper is selling for $20 to $25 a ton, down from $105 in October, according to Official Board Markets, a newsletter that tracks paper prices. And recyclers say tin is worth about $5 a ton, down from $327 earlier this year.”
The article makes the case that, while the market for recycled materials has always been sensitive to changing economic conditions, the sharp drop in demand from China in the current crisis has increased the extent of the price swings:
“China's influence is so great that in recent years recyclables have been worth much less in areas of the United States that lack easy access to ports that can ship there.”
The only thing saving city recycling programs in the US at present is that even though they are now paying to have recycled materials picked up (before they received money), it is still cheaper than having to pay to take them to the landfill.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Back at Junk Value, Recyclables Are Piling Up
By MATT RICHTEL and KATE GALBRAITH
1395 words
8 December 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/12/08/business/08recycle.html
“Trash has crashed. The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals.”
The corresponding wild fluctuation in the market price for specific recycled materials mean that it is sometimes cheaper for firms to dispose of them (to avoid storage costs), than sell them on the market:
“On the West Coast, for example, mixed paper is selling for $20 to $25 a ton, down from $105 in October, according to Official Board Markets, a newsletter that tracks paper prices. And recyclers say tin is worth about $5 a ton, down from $327 earlier this year.”
The article makes the case that, while the market for recycled materials has always been sensitive to changing economic conditions, the sharp drop in demand from China in the current crisis has increased the extent of the price swings:
“China's influence is so great that in recent years recyclables have been worth much less in areas of the United States that lack easy access to ports that can ship there.”
The only thing saving city recycling programs in the US at present is that even though they are now paying to have recycled materials picked up (before they received money), it is still cheaper than having to pay to take them to the landfill.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Back at Junk Value, Recyclables Are Piling Up
By MATT RICHTEL and KATE GALBRAITH
1395 words
8 December 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/12/08/business/08recycle.html
Friday, January 30, 2009
Strategic CSR - Quiz
I saw the following five questions last weekend in an ad for the Newsprint & Newspaper Industry Environmental Action Group (http://www.nnieag.org.uk/current_adverts.html). The ad is designed to test the reader’s knowledge of recycled paper and how it is used in the newspaper industry:
1. Can paper be recycled forever? Yes No
2. Does recycled paper need new fibers? Yes No
3. How much recovered paper do newspapers contain? 100% 49% 80.6%
4. How is the raw material in your newspaper sourced? Economically Responsibly
5. What should you do with your newspapers? Burn them Recycle them
Scroll down for the answers…..
Have a good weekend
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Answers (as written in the ad):
1. No, the fibers get worn out.
2. Yes, always.
3. 80.6%.
4. Responsibly, both recovered fibers and virgin pulp.
5. Recycle them, of course!
1. Can paper be recycled forever? Yes No
2. Does recycled paper need new fibers? Yes No
3. How much recovered paper do newspapers contain? 100% 49% 80.6%
4. How is the raw material in your newspaper sourced? Economically Responsibly
5. What should you do with your newspapers? Burn them Recycle them
Scroll down for the answers…..
Have a good weekend
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Answers (as written in the ad):
1. No, the fibers get worn out.
2. Yes, always.
3. 80.6%.
4. Responsibly, both recovered fibers and virgin pulp.
5. Recycle them, of course!
Wednesday, January 28, 2009
Strategic CSR - De Beers
The article in the url below is an interview with Gareth Penny, CEO of De Beers. Penny took over as CEO of the diamond company in 2006 in the middle of the ‘conflict diamonds’ crisis (Issues: Country of Origin, p223):
“Rapper Kanye West's "Diamonds From Sierra Leone" in 2005 and the movie "Blood Diamond" in 2006 were triggering a wave of negative publicity about buying "conflict diamonds," which were sold in the 1990s by African rebels to help pay for their wars.”
The interview asks Penny about what he has done to steer De Beers through this (“One hundred percent of De Beers diamonds today are conflict free. … It is estimated that 99.8% of all diamonds in the world flow through the Kimberley Process, which is extraordinary”) and other CSR-related issues. It also delves into his perspective on De Beers’ role as a leader in the diamonds industry today:
“Today, De Beers is "in transition," says Mr. Penny, 45 years old. The company, whose sales slipped 2.8% last year to $6.84 billion, has a new business model and is trying to polish its image. And Mr. Penny now casts himself as an unofficial ambassador for Africa who can help bring businesses and jobs to the continent.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Boss Talk: De Beers Polishes Its Image --- CEO Penny Refashions Business Model to Tackle Diamond Giant's Flaws
By Vanessa O'Connell
1255 words
7 July 2008
The Wall Street Journal
B1
http://online.wsj.com/public/article/SB121538963806131221.html
“Rapper Kanye West's "Diamonds From Sierra Leone" in 2005 and the movie "Blood Diamond" in 2006 were triggering a wave of negative publicity about buying "conflict diamonds," which were sold in the 1990s by African rebels to help pay for their wars.”
The interview asks Penny about what he has done to steer De Beers through this (“One hundred percent of De Beers diamonds today are conflict free. … It is estimated that 99.8% of all diamonds in the world flow through the Kimberley Process, which is extraordinary”) and other CSR-related issues. It also delves into his perspective on De Beers’ role as a leader in the diamonds industry today:
“Today, De Beers is "in transition," says Mr. Penny, 45 years old. The company, whose sales slipped 2.8% last year to $6.84 billion, has a new business model and is trying to polish its image. And Mr. Penny now casts himself as an unofficial ambassador for Africa who can help bring businesses and jobs to the continent.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Boss Talk: De Beers Polishes Its Image --- CEO Penny Refashions Business Model to Tackle Diamond Giant's Flaws
By Vanessa O'Connell
1255 words
7 July 2008
The Wall Street Journal
B1
http://online.wsj.com/public/article/SB121538963806131221.html
Monday, January 26, 2009
Strategic CSR - Investors
The article in the url below poses the question: “What sort of ownership do shareholders now provide, and how should managers respond?”
In suggesting an answer, the author makes the case for the negative effect of shareholders’ short term perspective on the ability of managers to implement a meaningful strategic vision of the firm (Figure 1.4: The Shareholder Shift—From Investor to Speculator, p14):
“Building and improving a business takes time. You cannot be judged hour by hour on your performance.”
The author argues that the implications of this divergence in interests between managers and investors extend to the definitions of the boundaries of the firm:
“"How can managers get back to being in control of the companies they manage?" … Perhaps this is a futile question, based on a nostalgic view of what companies should be. Maybe business has changed for good, and companies are now barely even semi-permanent organisations, with their own ethos and identity.”
This development also speaks to the importance of instituting a stakeholder perspective that enables firms to prioritize conflicting interests and meet the needs of those they deem to be most important:
“… today there are perhaps as many as seven different types of owners that businesses may have to reckon with, all of them laying claim to assets in different ways.”
The goal should be to focus on:
“… "intrinsic" shareholders, leaving traders and "mechanical" owners to the investor relations department. In short, do not waste management time on people who do not really understand you and will never make the effort to get to know you properly.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Short-term owners who leave the C-suite bitter
Stern, Stefan
920 words
24 June 2008
Financial Times
London Ed1
16
http://www.ft.com/cms/s/0/73110d3c-4185-11dd-9661-0000779fd2ac.html
In suggesting an answer, the author makes the case for the negative effect of shareholders’ short term perspective on the ability of managers to implement a meaningful strategic vision of the firm (Figure 1.4: The Shareholder Shift—From Investor to Speculator, p14):
“Building and improving a business takes time. You cannot be judged hour by hour on your performance.”
The author argues that the implications of this divergence in interests between managers and investors extend to the definitions of the boundaries of the firm:
“"How can managers get back to being in control of the companies they manage?" … Perhaps this is a futile question, based on a nostalgic view of what companies should be. Maybe business has changed for good, and companies are now barely even semi-permanent organisations, with their own ethos and identity.”
This development also speaks to the importance of instituting a stakeholder perspective that enables firms to prioritize conflicting interests and meet the needs of those they deem to be most important:
“… today there are perhaps as many as seven different types of owners that businesses may have to reckon with, all of them laying claim to assets in different ways.”
The goal should be to focus on:
“… "intrinsic" shareholders, leaving traders and "mechanical" owners to the investor relations department. In short, do not waste management time on people who do not really understand you and will never make the effort to get to know you properly.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Short-term owners who leave the C-suite bitter
Stern, Stefan
920 words
24 June 2008
Financial Times
London Ed1
16
http://www.ft.com/cms/s/0/73110d3c-4185-11dd-9661-0000779fd2ac.html
Friday, January 23, 2009
Strategic CSR - Havel & Orwell
In the article in the url below, John Kay draws on the work of Vaclav Havel (The Power of the Powerless) and George Orwell (1984 and Politics and the English Language) to demonstrate both the emptiness and danger of modern-day business language (slogans, annual reports, value or mission statements, etc). Kay points out that business language can be vacuous at worst, but is too often accepted and regurgitated as “a declaration of conformity” because of “the human desire to avoid confrontation”:
“Like George Orwell, Mr Havel described "living within the lie". Both saw how the dishonesty inherent in such acquiescence ultimately corrupted all aspects of life, personal as well as political.”
Kay terms such language “the theatre of empty rhetoric”:
“In western liberal democracies, no one exhibits slogans calling on the workers to unite. But you see similar displays in reception areas of businesses and even in government offices. They urge us to pursue excellence, to delight our customers, to be wholehearted in our embrace of change.”
Importantly, Kay notes danger in the short step from language to behavior. The purpose of such language is to obfuscate, rather than convey meaning. People accept it without protest, however, because it is the easy thing to do. Over time, the failure to question, to hold organizations to account, results in the superficial or vacuous becoming reality. It is here that there is the potential for larger, damaging consequences:
“The self-deception of living within the lie is how banks fell victim to the credit crunch and the US came to be embroiled in Iraq. The greengrocer, and millions like him, perpetuated a great evil by acquiescing in a minor deceit. Dishonesty of speech quickly leads to dishonesty in behaviour because the language we use governs all we do.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
Weasel words have the teeth to kill great ventures
Kay, John
677 words
14 January 2009
Financial Times
Asia Ed1
09
http://www.ft.com/cms/s/0/89550200-e190-11dd-afa0-0000779fd2ac.html
“Like George Orwell, Mr Havel described "living within the lie". Both saw how the dishonesty inherent in such acquiescence ultimately corrupted all aspects of life, personal as well as political.”
Kay terms such language “the theatre of empty rhetoric”:
“In western liberal democracies, no one exhibits slogans calling on the workers to unite. But you see similar displays in reception areas of businesses and even in government offices. They urge us to pursue excellence, to delight our customers, to be wholehearted in our embrace of change.”
Importantly, Kay notes danger in the short step from language to behavior. The purpose of such language is to obfuscate, rather than convey meaning. People accept it without protest, however, because it is the easy thing to do. Over time, the failure to question, to hold organizations to account, results in the superficial or vacuous becoming reality. It is here that there is the potential for larger, damaging consequences:
“The self-deception of living within the lie is how banks fell victim to the credit crunch and the US came to be embroiled in Iraq. The greengrocer, and millions like him, perpetuated a great evil by acquiescing in a minor deceit. Dishonesty of speech quickly leads to dishonesty in behaviour because the language we use governs all we do.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
Weasel words have the teeth to kill great ventures
Kay, John
677 words
14 January 2009
Financial Times
Asia Ed1
09
http://www.ft.com/cms/s/0/89550200-e190-11dd-afa0-0000779fd2ac.html
Wednesday, January 21, 2009
Strategic CSR - The End of Ideology?
While I would not have chosen Rick Warren as my beacon of hope, the article in the url below by David Brooks makes a compelling argument that the inauguration of Barack Obama represents a shift to a new social environment. Obama is not the beginning of the shift, Brooks argues; instead, he is the latest development in a longer process that has been occurring since the 1960s:
“… societies do mend themselves, slowly and organically. In 2002, Rick Warren wrote a phenomenally popular book called ''The Purpose Driven Life.'' The first sentence was, ''It's not about you.'' That was a sign that the age of expressive individualism was coming to an end. New community patterns and social norms were coalescing.”
In Brooks’ view, Obama both personifies this change process and also carries the potential to take it to the next level—translating the rhetoric and ideas into meaningful action:
“… folks in the Obama camp hope to create a Grand Bargain. That would mean building on a culture of cohesion and tackling the issues that require joint sacrifice -- like reducing deficits, fixing Medicare and Social Security and reforming health care. These problems were insoluble during the era of division and distrust.”
If true, it is likely that this new environment will be more conducive to an argument in favor of CSR, whether moral, rational, or economic (Chapter 1, Towards A Responsible Society, pp. 15-19).
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
The Politics Of Cohesion
By DAVID BROOKS
806 words
20 January 2009
The New York Times
Late Edition - Final
33
http://www.nytimes.com/2009/01/20/opinion/20brooks.html
“… societies do mend themselves, slowly and organically. In 2002, Rick Warren wrote a phenomenally popular book called ''The Purpose Driven Life.'' The first sentence was, ''It's not about you.'' That was a sign that the age of expressive individualism was coming to an end. New community patterns and social norms were coalescing.”
In Brooks’ view, Obama both personifies this change process and also carries the potential to take it to the next level—translating the rhetoric and ideas into meaningful action:
“… folks in the Obama camp hope to create a Grand Bargain. That would mean building on a culture of cohesion and tackling the issues that require joint sacrifice -- like reducing deficits, fixing Medicare and Social Security and reforming health care. These problems were insoluble during the era of division and distrust.”
If true, it is likely that this new environment will be more conducive to an argument in favor of CSR, whether moral, rational, or economic (Chapter 1, Towards A Responsible Society, pp. 15-19).
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
The Politics Of Cohesion
By DAVID BROOKS
806 words
20 January 2009
The New York Times
Late Edition - Final
33
http://www.nytimes.com/2009/01/20/opinion/20brooks.html
Monday, January 19, 2009
Strategic CSR - Welcome Back!
Welcome back to the Strategic CSR Newsletter!
The first Newsletter of this semester is below. As always, your comments and ideas are welcome.
The articles in the two urls below offer different year-end perspectives on the progress made by the CSR debate in 2008. The first article is by Bill Baue of CSRWire.com and aims to provide a summary of key CSR events in 2008. In particular, Baue highlights the intersection of the economic and environmental crises:
“The economic meltdown of 2008 mirrors the simultaneous environmental meltdown fueled by the climate calamity - both share common roots, and many in the Corporate Social Responsibility (CSR) community believe they share a common salvation. At the most basic level, the global economy is melting down because the belief in perpetual growth, propped up by deregulation and outright fraud, has smacked up against the finite nature of reality. Likewise, our atmosphere is literally melting our ecosystems, primarily because of the growth curve of fossil fuel emissions and carbon concentrations. … The most likely savior scenario likewise entwines economy and environment: a "green" recovery promises to create good jobs and strong companies while transitioning to a low-carbon energy infrastructure powered by renewable resources such as wind and solar.”
The second article is by Mallen Baker (Foreword, pxiii) who, rather than list a series of achievements, seeks to provide insight into what these achievements mean for 2009 and beyond. Of primary importance, Baker argues, is to recognize the negative influence of the search for ‘proof’ that CSR leads to measureable profitability for firms and maximum returns for shareholders:
“First – most people, including the declared supporters of CSR, have not really bought the business case arguments that have been put out there by a range of organisations, research groups and others. … There has been a whole industry based on this line in recent years. Trying to prove cause and effect: successful business = responsible business. It's time to move the argument on. All of those attempts bought into one central assumption – that it is the primary role of business to maximise shareholder returns and therefore any CSR commitment needs to show that it delivers cash to the bottom line in a direct and predictable way. That is the biggest assumption whose future is questioned by recent events.”
Happy New Year!
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
CSRwire Reports Top Corporate Social Responsibility News of 2008
Questions remain for CSR in 2009
A "green" recovery from economic and environmental meltdowns; the advent of Shareholder Activism 2.0 with binding resolutions at TARP banks; CSR adopts Web 2.0 strategies for sustainability reporting; is Wal-Mart really green? and much more...
Press release from: CSRwire
by Bill Baue
http://www.csrwire.com/News/14244.html
CSR: So what did we learn in 2008 that we can use in 2009?
Mallen Baker
January 7, 2009
Let's lose the sloppy thinking about CSR and bottom line benefits to start with, argues Mallen Baker
http://www.ethicalcorp.com/content.asp?ContentID=6275
Friday, December 5, 2008
Strategic CSR - 2nd Edition!
This will be the last CSR Newsletter for the Fall semester.
Have a great holiday season and I will see you in January!
The purpose of the Newsletter today is to ask for your assistance in shaping the second edition of the textbook that this Newsletter is intended to support: Strategic CSR: Stakeholders in a Global Environment.
Sage has decided to publish a second edition and Bill and I thought it would be a good idea to ask for your thoughts in terms of what you like and do not like about the first edition.
In general, we intend to keep the overall structure of the current edition, but will:
• Add two new chapters to Part I
• Update the Issues in Part II (removing the less effective ones and adding some that are more relevant to the CSR debate today), and
• Add a selection of 50 past Newsletters as a new Part III.
None of the current material will be lost, however, as Sage plans to set-up an interactive website on which we can store:
• Information in the current edition, but not included in the second edition
• The Instructor’s CD, and, perhaps,
• Additional material posted by adopters.
We would appreciate it very much if you could make any suggestions you have with these proposed changes in mind (particularly those of you who are using the book in the classroom). Please, also, if you have any additional ideas that are not included in this brief outline, please let us know as we are open to your suggestions.
In the past I have solicited thoughts from some of you on the book, so, if you have already sent me your ideas and have nothing more to add, thank you and rest assured your comments will be taken into account.
Many thanks again for your input into this process and continuing support for the textbook. We are excited to try and improve the book for its second edition. We will keep you updated on the release date for the second edition when it is finalized and as it gets nearer.
Happy Holidays!
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Wednesday, December 3, 2008
Strategic CSR - Teaching CSR
The article in the url below questions the ambitions of students from prestigious U.S. colleges (Harvard in particular) who automatically pursue high-paying careers in the financial or consulting industries:
“As Adam M. Guren, a new Harvard graduate who will be pursuing his doctorate in economics, put it, ''A lot of students have been asking the question: 'We came to Harvard as freshmen to change the world, and we're leaving to become investment bankers -- why is this?'”
The article outlines the pressures students feel to enter such careers, while talking to those who are trying to stimulate a debate about the true value of these sought-after educations (Issues: Ethics, p227):
“Is this what a Harvard education is for?'' … ''Are Ivy League schools simply becoming selecting mechanisms for Wall Street?”
The universities are also engaging in this debate, sponsoring “reflection seminars” at Harvard and reducing the financial cost of attending these universities as a way of removing the need/incentive to pursue a high salary on graduation:
“This year, Tufts announced that it would pay off college loans for graduates who chose public service jobs. And officials at Harvard, Penn, Amherst and a number of other colleges say one reason they have begun emphasizing grants instead of loans in financial aid is so students do not feel pressured by their debts to pursue lucrative careers.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
“As Adam M. Guren, a new Harvard graduate who will be pursuing his doctorate in economics, put it, ''A lot of students have been asking the question: 'We came to Harvard as freshmen to change the world, and we're leaving to become investment bankers -- why is this?'”
The article outlines the pressures students feel to enter such careers, while talking to those who are trying to stimulate a debate about the true value of these sought-after educations (Issues: Ethics, p227):
“Is this what a Harvard education is for?'' … ''Are Ivy League schools simply becoming selecting mechanisms for Wall Street?”
The universities are also engaging in this debate, sponsoring “reflection seminars” at Harvard and reducing the financial cost of attending these universities as a way of removing the need/incentive to pursue a high salary on graduation:
“This year, Tufts announced that it would pay off college loans for graduates who chose public service jobs. And officials at Harvard, Penn, Amherst and a number of other colleges say one reason they have begun emphasizing grants instead of loans in financial aid is so students do not feel pressured by their debts to pursue lucrative careers.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Monday, December 1, 2008
Strategic CSR - Carbon Offsets
The article in the first url below demonstrates the size of the market for carbon credits:
http://sg.wsj.net/public/resources/images/P1-AL151A_carbo_20080411191616.gif
It also demonstrates the market’s fragile nature and the potential for abuse:
“The United Nations is the main global policeman in an effort by wealthy nations to reduce the impact of their own pollution by paying for cleanups in the developing world. The program, known as the Clean Development Mechanism, is one of the most important coordinated efforts to attack global warming. In recent months, however, U.N. regulators who administer the program have objected to dozens of these developing-world projects, ranging from hydroelectric plants to wind farms, questioning whether the projects would produce a real environmental payoff.”
The article in the second url below profiles the fate of the largest of the agencies/auditors that identify and certify projects, EcoSecurities. Following certification, the projects are then submitted to the UN for final approval under the scheme. Following UN approval, then the agencies can begin trading the credits:
“EcoSecurities Ltd., helps companies in the industrialized world meet their obligations to pollute less by selling them "credits" that fund clean-air projects in poorer nations. Last year, some $9.4 billion in these credits were traded, up from almost none four years earlier.”
The articles report that during the early years of the scheme, set-up following the Kyoto Protocol, UN oversight was lax and agencies like EcoSecurities were allowed to submit projects that had not been properly vetted. Now, however, the UN is moving to improve its oversight and tighten the overall system of approval:
“EcoSecurities' rise coincided with a permissive U.N. board. In 2004 and 2005, the board automatically approved 95% of the projects proposed to it, according to U.N. statistics. … Last year, the U.N. board gave automatic approval to only 57% of proposed projects, down from 95% in 2004 and 2005. Overall, it rejected 9% of proposed projects last year, more than double its rejection rate in 2006.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
U.N. Effort To Curtail Emissions In Turmoil
By Jeffrey Ball
1463 words
12 April 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB120796372237309757.html
Up In Smoke: Two Carbon-Market Millionaires Take a Hit as U.N. Clamps Down --- EcoSecurities Sees Shares Slide 70%; 'In the Gray Zone'
By Jeffrey Ball
2317 words
14 April 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB120813542203111705.html
http://sg.wsj.net/public/resources/images/P1-AL151A_carbo_20080411191616.gif
It also demonstrates the market’s fragile nature and the potential for abuse:
“The United Nations is the main global policeman in an effort by wealthy nations to reduce the impact of their own pollution by paying for cleanups in the developing world. The program, known as the Clean Development Mechanism, is one of the most important coordinated efforts to attack global warming. In recent months, however, U.N. regulators who administer the program have objected to dozens of these developing-world projects, ranging from hydroelectric plants to wind farms, questioning whether the projects would produce a real environmental payoff.”
The article in the second url below profiles the fate of the largest of the agencies/auditors that identify and certify projects, EcoSecurities. Following certification, the projects are then submitted to the UN for final approval under the scheme. Following UN approval, then the agencies can begin trading the credits:
“EcoSecurities Ltd., helps companies in the industrialized world meet their obligations to pollute less by selling them "credits" that fund clean-air projects in poorer nations. Last year, some $9.4 billion in these credits were traded, up from almost none four years earlier.”
The articles report that during the early years of the scheme, set-up following the Kyoto Protocol, UN oversight was lax and agencies like EcoSecurities were allowed to submit projects that had not been properly vetted. Now, however, the UN is moving to improve its oversight and tighten the overall system of approval:
“EcoSecurities' rise coincided with a permissive U.N. board. In 2004 and 2005, the board automatically approved 95% of the projects proposed to it, according to U.N. statistics. … Last year, the U.N. board gave automatic approval to only 57% of proposed projects, down from 95% in 2004 and 2005. Overall, it rejected 9% of proposed projects last year, more than double its rejection rate in 2006.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
U.N. Effort To Curtail Emissions In Turmoil
By Jeffrey Ball
1463 words
12 April 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB120796372237309757.html
Up In Smoke: Two Carbon-Market Millionaires Take a Hit as U.N. Clamps Down --- EcoSecurities Sees Shares Slide 70%; 'In the Gray Zone'
By Jeffrey Ball
2317 words
14 April 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB120813542203111705.html
Friday, November 28, 2008
Strategic CSR - Qik
The article in the url below demonstrates further how evolving communications technology in an online world raises the profile for CSR for firms (Issues: Internet, p237; Media, p249):
“Qik's attraction is that it takes a feed from the viewfinder of a camera phone and streams the images live over the internet to a web page. Viewers can type comments and questions on to the screen, which the phone user can then see and answer.”
The Qik software enables anyone with a cell phone to upload live video and distribute it globally in real time. The article discusses the implications of this for media outlets (news, in particular), but I think the real danger lies for the entities who are the potential news stories. While this has broader political and social implications, therefore, Qik also further jeopardizes firms’ reputations, which can be quickly damaged by anyone with a cell phone and internet connection:
“"What if there had been Qik-enabled cell phones during the Burma protests a few months ago? Snap your fingers and it's there on whatever channel," says [Carla Thompson, an analyst with the Guidewire Group].”
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Qik broadcasts shine light on workings of the world: A small piece of mobile software is proving useful for capturing live images in every corner of life
By Chris Nuttall in San Francisco
912 words
1 August 2008
Financial Times
London Ed1
12
http://www.ft.com/cms/s/0/58e9f0ae-5f62-11dd-91c0-000077b07658.html
or without registration at:
http://www.ftchinese.com/story.php?lang=en&storyid=001021144
“Qik's attraction is that it takes a feed from the viewfinder of a camera phone and streams the images live over the internet to a web page. Viewers can type comments and questions on to the screen, which the phone user can then see and answer.”
The Qik software enables anyone with a cell phone to upload live video and distribute it globally in real time. The article discusses the implications of this for media outlets (news, in particular), but I think the real danger lies for the entities who are the potential news stories. While this has broader political and social implications, therefore, Qik also further jeopardizes firms’ reputations, which can be quickly damaged by anyone with a cell phone and internet connection:
“"What if there had been Qik-enabled cell phones during the Burma protests a few months ago? Snap your fingers and it's there on whatever channel," says [Carla Thompson, an analyst with the Guidewire Group].”
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Qik broadcasts shine light on workings of the world: A small piece of mobile software is proving useful for capturing live images in every corner of life
By Chris Nuttall in San Francisco
912 words
1 August 2008
Financial Times
London Ed1
12
http://www.ft.com/cms/s/0/58e9f0ae-5f62-11dd-91c0-000077b07658.html
or without registration at:
http://www.ftchinese.com/story.php?lang=en&storyid=001021144
Wednesday, November 26, 2008
Strategic CSR - Ethical consumers?
The article in the link below questions the assumption of many CSR advocates that consumers care sufficiently about business ethics and CSR to sustain a fundamental shift in economic model (Issues: Ethics, p227). In essence, consumers will say one thing in response to survey questions about CSR, then turnaround and make their purchase decisions based on different principles:
“For most people to choose an “ethical” product over a regular product, that product must not cost any more than an ordinary one, it must come from a reputed brand, require no special effort to buy or use, and it must be at least as good as its alternative.”
In spite of a rise in availability of ethical products and producers willing to sell them:
“For the majority of consumers, cheap products of decent quality remain the popular choice.”
If true, then:
“… what incentives do businesses have in maintaining responsible or ethical standards?”
While the article addresses the issue of reputation risk for firms, it is at its most convincing in arguing that the threat of regulation represents the strongest incentive for firms to reform ahead of consumer demands that they do so (Chapter 1: The Rational Argument for CSR, p17). Because consumers are unlikely to voluntarily sacrifice their current standard of living for a future, uncertain benefit (the article argues), governments will eventually be forced to act on their behalf:
“… because the future will have to be one in which governments and regulators will have to take a much tougher line on the way externalities are priced by business.”
It is not the most forceful (or uplifting) argument for sustainable change, but it might be the best one that we have got!
Happy Thanksgiving!
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Ethical consumers – Cop-out at the checkout
Consumers have shown that they will not push companies to be responsible
Chandran Nair
September 8, 2008
http://www.ethicalcorp.com/content.asp?ContentID=6074
“For most people to choose an “ethical” product over a regular product, that product must not cost any more than an ordinary one, it must come from a reputed brand, require no special effort to buy or use, and it must be at least as good as its alternative.”
In spite of a rise in availability of ethical products and producers willing to sell them:
“For the majority of consumers, cheap products of decent quality remain the popular choice.”
If true, then:
“… what incentives do businesses have in maintaining responsible or ethical standards?”
While the article addresses the issue of reputation risk for firms, it is at its most convincing in arguing that the threat of regulation represents the strongest incentive for firms to reform ahead of consumer demands that they do so (Chapter 1: The Rational Argument for CSR, p17). Because consumers are unlikely to voluntarily sacrifice their current standard of living for a future, uncertain benefit (the article argues), governments will eventually be forced to act on their behalf:
“… because the future will have to be one in which governments and regulators will have to take a much tougher line on the way externalities are priced by business.”
It is not the most forceful (or uplifting) argument for sustainable change, but it might be the best one that we have got!
Happy Thanksgiving!
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Ethical consumers – Cop-out at the checkout
Consumers have shown that they will not push companies to be responsible
Chandran Nair
September 8, 2008
http://www.ethicalcorp.com/content.asp?ContentID=6074
Monday, November 24, 2008
Strategic CSR - Finance
The article in the url below by Martin Wolf of the FT offers two important comments on the recent credit crisis and the self-inflicted wounds of the financial industry (Issues: Finance, p180; Investing, p184). First, is the idea that industries that fail to regulate themselves and consistently overstep the bounds of acceptability set by society face regulation (Chapter 1; A Rational Argument for CSR, p17):
“More regulation is on its way. After frightening politicians and policymakers so badly, even the most optimistic banker must realise this. The question is whether the additional regulation will do any good.”
Second, Wolf offers a stinging rebuke to an industry that should expect an even stronger social backlash because of its poor performance relative to standards in other industries:
“Yet why, I ask, should this industry have apparently failed to improve its standards of performance over the past century? After all, almost every other industry has done so. Consider how confident we are that the food we buy will not poison us. Yet adulterated food was once a threat. … [The banking industry’s] purely operational performance is now impressive. But competition does not work well in finance. The "product" of the financial industry is promises for an uncertain future, marketed as dreams that can readily become nightmares. Customers are readily swept away by exaggerated promises, irrational beliefs, misplaced trust and sheer skulduggery. So, too, are practitioners: basing risk management on limited data and inadequate models is a good example. Emotions count wherever uncertainties loom. Boeing would not survive if the aircraft it built fell out of the sky. Yet in the financial industry, huge blunders are also almost always made in common. If everybody is in the dance nobody is to blame and, in any case, governments, horrified by the consequences of a collapsing financial system, will come to the rescue.”
Wolf, however, is pessimistic that anything will change. Regulators, he argues, are likely to focus on correcting past mistakes, rather than preventing future ones, and firms and individuals are unlikely to feel sufficient “pain” to deter future recklessness.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Why financial regulation is both difficult and essential
By Martin Wolf
1,035 words
April 15 2008
Financial Times
London Ed1
Page 11
http://us.ft.com/ftgateway/superpage.ft?news_id=fto041520081354588929
“More regulation is on its way. After frightening politicians and policymakers so badly, even the most optimistic banker must realise this. The question is whether the additional regulation will do any good.”
Second, Wolf offers a stinging rebuke to an industry that should expect an even stronger social backlash because of its poor performance relative to standards in other industries:
“Yet why, I ask, should this industry have apparently failed to improve its standards of performance over the past century? After all, almost every other industry has done so. Consider how confident we are that the food we buy will not poison us. Yet adulterated food was once a threat. … [The banking industry’s] purely operational performance is now impressive. But competition does not work well in finance. The "product" of the financial industry is promises for an uncertain future, marketed as dreams that can readily become nightmares. Customers are readily swept away by exaggerated promises, irrational beliefs, misplaced trust and sheer skulduggery. So, too, are practitioners: basing risk management on limited data and inadequate models is a good example. Emotions count wherever uncertainties loom. Boeing would not survive if the aircraft it built fell out of the sky. Yet in the financial industry, huge blunders are also almost always made in common. If everybody is in the dance nobody is to blame and, in any case, governments, horrified by the consequences of a collapsing financial system, will come to the rescue.”
Wolf, however, is pessimistic that anything will change. Regulators, he argues, are likely to focus on correcting past mistakes, rather than preventing future ones, and firms and individuals are unlikely to feel sufficient “pain” to deter future recklessness.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Why financial regulation is both difficult and essential
By Martin Wolf
1,035 words
April 15 2008
Financial Times
London Ed1
Page 11
http://us.ft.com/ftgateway/superpage.ft?news_id=fto041520081354588929
Friday, November 21, 2008
Strategic CSR - Nike
It is characteristic of the media that good news takes a back seat to scandal, but the article in the url below is worth highlighting as an example of how far Nike has come regarding CSR (Issues: Cultural Conflict, p160). The article, buried deep in the sports pages of my local paper, reports Nike’s voluntary disclosure of the mistreatment of workers at the factory of a Nike sub-contractor in Malaysia:
“… including squalid living conditions, garnished wages and withheld passports of foreign workers.”
Nike’s response, I think, is impressive:
“Nike said all workers are being transferred to Nike-inspected and approved housing … All workers will be reimbursed for any fees and going forward, the fees will be paid by the factory. All workers will have immediate access to their passports and any worker who wishes to return home will be provided return airfare.”
Those executives that remain unconvinced of the value of CSR, however, are likely to remain skeptical as long as such proactive behavior remains unrecognized, while the slightest transgression is plastered all over the front pages.
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Nike finds major violations at Malaysian factory
By SARAH SKIDMORE
AP Business Writer
415 words
1 August 2008
02:04 PM
Associated Press Newswires
http://www.newsvine.com/_news/2008/08/01/1713691-nike-finds-major-violations-at-malaysian-factory
“… including squalid living conditions, garnished wages and withheld passports of foreign workers.”
Nike’s response, I think, is impressive:
“Nike said all workers are being transferred to Nike-inspected and approved housing … All workers will be reimbursed for any fees and going forward, the fees will be paid by the factory. All workers will have immediate access to their passports and any worker who wishes to return home will be provided return airfare.”
Those executives that remain unconvinced of the value of CSR, however, are likely to remain skeptical as long as such proactive behavior remains unrecognized, while the slightest transgression is plastered all over the front pages.
Have a good weekend.
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Nike finds major violations at Malaysian factory
By SARAH SKIDMORE
AP Business Writer
415 words
1 August 2008
02:04 PM
Associated Press Newswires
http://www.newsvine.com/_news/2008/08/01/1713691-nike-finds-major-violations-at-malaysian-factory
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