I have been doing a bit of work in the area of corporate social responsibility (CSR) lately. It is becoming a hot topic in organizations and a lot of very committed people are thinking about how to think about the mix of economic, social and environmental concerns. Traditionally, the sole purpose of business as an economic enterprise is to make a profit—and therein lies the problem. Yes, all would agree that this purpose includes being ethical, honest and responsible for stakeholders directly related to the organization and its activities. The fact is that business today is the predominant institution in the world—in terms of resources, governmental influence, technology and capacity to bring about change. Whether business has been a major contributor to the problems in the world is arguable. More importantly, it most definitely must be a major part of the solutions.
Until recently, CSR has been for many (though not all) companies either a necessary component of public relations or a sincere project to find new ways to work and do ‘the right thing’. In virtually every case, the business and its values and objectives have been in a different domain than making serious and substantial investments in taking care of and being responsible for the environment or dealing with social issues.
The difficulty in bringing these two domains together has to do with the fact that these two aspects of our organizational realities present a paradox.
It goes like this. Say I am in the business of selling bottled water and I accept that my bottles pose an environmental liability because they aren’t recyclable. I can invest a substantial amount of capital to develop bottles that can be recycled, but they are not clear. My market research says that all my customers want clear bottles and they won’t pay more for a recyclable bottle. The paradox is this: it would appear I must risk my business results in order to do the ‘right’ thing. If I don’t do the ‘right’ thing, I may be contributing to a situation in which I lose my business to social, environmental or governmental pressures. And if I do the ‘right’ thing, I may lose my business due to economic pressures. True, there might be other solutions to this conundrum, but the argument remains pretty much the same.
To invest now in whatever it takes to make the best decision that takes care of the environment requires a kind of ‘faith’ that the customers will reward my commitment or that I can educate my consumers in the virtues of consuming ‘green’ products. Said differently, I need to take a stand FOR what I believe is right before there is evidence that I will succeed or even survive. My commitment to the higher longer-term purpose needs to be larger than my short-term economic interests.
Yet, this isn’t so different than what we are already doing. Every decision we make always has both long and short-term implications. We can interpret almost any situation in terms of what might happen ‘if’. And, depending upon our assumptions, we can always speculate and argue for an upside or a downside based on whether we choose to do “X” or “Y”.
What we don’t realize is that, at the end of the day, a decision is always a choice and that, in truth, we have very little, if any, control over most of the variables that could impact the outcome.
In the final analysis, corporate social responsibility means making the right long-term decisions while at the same time achieving whatever short-term results are necessary to remain viable, including being competitive and profitable. CSR requires faith in the stakeholders, including one’s customers and shareholders, and a belief that if management’s decisions are in the best interests of both the long and short-term, then the market will reward their efforts.
So the only real question is do we have sufficient faith in ourselves that we will be able to have it both ways at the end of the day?
The cost of not having faith is that the enterprise and its management will always be trapped in an either/or conundrum. The cost of having faith—not in the future, but in one’s self—is that there are no guarantees. One must be willing to assume responsibility for many things outside our control.
The choice is ours. Choose.