The topic of CSR is debated hotly in online media, colleges and boardrooms.There is plenty of recent literature offering insights into the interaction between CSR and strategy.Two areas stand out.
CSR and Marketing
In their MIT Sloan Review article Does it Pay to be Good? authors Remi Trudel and June Cotte advise corporate marketers to pursue a socially responsible differentiation strategy. They point out that consumers will punish the producer of unethically produced goods to a greater extent than they will reward a company that offers ethically produced products. The negative effects of unethical behavior have a substantially greater impact on consumer willingness to pay than the positive effects of ethical behavior.
CSR and Talent Management
CSR's effectiveness as a lever for talent management is explored by Bhattacharya, Sen and Korschun in Using CSR to Win the War for Talent. They propose how business leaders can make CSR effective in attracting and managing talent. The payoff, according to the authors, is in the area of employee perception of the company. To effectively use CSR as an internal marketing lever, however, companies must make sure to:
- Consistently communicate CSR efforts to employees
- Consider employee need diversity in designing CSR initiatives
- Understand the psychological underpinnings of pro-company behaviors, higher productivity, longer tenures and so on
- Involve employees on their own terms - not by forcing CSR top-down
IMHO the concept of CSR has suffered more at the hands of its well meaning but naïve supporters than detractors like Dr. Karnani! There is a fundamental flaw in Dr. Karnani's thesis - where he (almost) approves of a value system for corporates that would be labeled immoral when applied to individuals. Economist John Kay has delved on this approach more than a decade ago. (http://www.johnkay.com/1998/02/03/the-role-of-business-in-society/ )
ReplyDeleteRhetoric apart – business of business is a complex thing. I am afraid most corporations think about CSR in the same way some parents think about “quality time” with their children. It cannot be an artificial add-on, it must be weaved in to the character. You point out two compelling arguments for CSR - customers rewarding a socially responsible corporation and employees developing affinity for a caring employer.
However, the real leverage for positive business outcome comes when CSR becomes a second nature to both the corporation and the employees in a seamless way. For example, a corporation may create environment for employees to be socially responsible without making them sacrifice work or life (as in work-life balance). CSR can be a federated network of individual initiatives rather than a centrally administered program - leading to employees developing kinship with their organization, leading to happiness that contributes to the business outcomes. It's about "obliquity" (http://www.wisegeek.com/what-is-obliquity.htm) - and may take a full fledged post to go in to elaboration!