The article in the url below by Mallen Baker (Foreword, pxiii) debates the search for proof of a business case for CSR (Chapter 1: An Economic Argument for CSR, p18):
“There is a powerful business case for most of the actions that a company might take under the label of “corporate social responsibility”. But much of what is currently offered under the heading of “business case for CSR” is tosh, and we need to wean ourselves off it. For instance, one of the most common questions I still get asked by managers and journalists alike is for figures to show that “doing CSR” has a measurable and inevitable positive impact on a company’s share price, or on its bottom line. It is a mirage, a distraction. Such figures that do exist are based on a fundamentally flawed premise. … Not only is there no agreement about what constitutes a good, or a sustainable, company, but there is also no agreement even on how you would measure the achievement of these criteria.”
The problem with Baker’s arguments early in the article is that, taken to the extreme, they lead to the conclusion that there is no way of measuring a firm’s CSR profile, little chance of finding a correlation with financial success across firms, and, therefore, no general business case. Instead, I prefer to argue that there is a way of quantifying CSR performance; it is just that we do not yet have sufficiently comprehensive tools to do so adequately:
“There is no one thing called “corporate social responsibility”. It is an umbrella label that covers a range of choices, dilemmas, principles and values. As a result, there can be no one business case that covers it – each proposed course of action requires its own rationale, will carry with it a degree of judgment, and will require skill in execution in order to achieve success.”
By rendering CSR so amorphous as to include anything a firm determines relevant, Baker is in danger of rendering CSR meaningless. It is not so much that I disagree with anything Baker says, so much that it is a matter of emphasis. His argument is a dangerous line to walk and, potentially, damages the cause he believes in so strongly. He is on much stronger ground in arguing that the debate around the value of CSR needs to be waged on a case-by-case basis, rather than trying to bend to the demands of the skeptics for an ultimate proof.
As part of this argument, Baker returns to concrete benefits of CSR later in the article. He notes that CSR is essential to building trust with customers and retaining the best employees, both components of a tangible business case. The complexity of quantifying these effects for firms and then aggregating similar measures across all aspects of operations lead Baker to suggest that the CSR field should not continue to tie itself in knots over the need to definitively prove the business case:
“Generally, if somebody chooses to buy from you it is because they like you, your brand, or your company and they want to buy from you. When sceptical chief executives demand a business case, it is because they do not want to buy from you and they are seeking to justify their scepticism by demanding a level of proof that is not realistically achievable.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther
Ethics and financial performance: The big question – Is there really a business case?
There is no catch-all “business case” for ethics, just good and bad business judgments. And always a healthy slice of luck
Mallen Baker
May 2, 2008
http://www.ethicalcorp.com/content.asp?ContentID=5876
