Corporate Social Responsibility | Richard Telofski on "The War on Capitalism"

The Marketplace Is Not Stupid

From much of my reading, I can see that the power of the NGO (non-governmental organization) is increasing. With regard to how that power affects business, my research shows that over the past decade NGO-influenced corporations are now becoming the norm rather than the exception. And from the projections I’ve read, it appears that that influence will only become greater over the next decade.

To go along to get along with this trend, multi-national corporations (MNCs) are moving, seemingly together as if in lock step, to establish corporate social responsibility (CSR) programs in order to meet the demands and expectations of NGOs, whether it be on environmental, social, labor, or cultural issues. And to help them craft their CSRs, MNCs now regularly collaborate with NGOs, bringing NGOs to the table as trusted advisors and de facto consultants. And when MNCs do this, which is increasingly often, they seem to do it with a “mea culpa” attitude.

Mea culpa attitudes belong only on the truly guilty. MNCs don’t give themselves enough credit. They suffer from a poor self-image. Paraphrasing Jessica Rabbit, “MNCs aren’t ‘bad.’ They’re just drawn that way.” Their “We’re so guilty” attitude is unjustified. MNCs should not sit themselves in a corner.

Yes, it’s true that MNCs are guilty of doing some “bad” things. Aren’t you? MNCs are operated by humans. Imperfect humans who make mistakes. But I fear their mea culpa is overdone because most, if not all, MNCs indeed do more “good” than “bad.” One doesn’t need to perform extensive quantitative analysis to realize this.

If the MNCs were not doing more good than bad, then such behavior would be obvious to the marketplace, which is not stupid contrary to the belief of many activists. The marketplace is not stupid. We can use the activist’s own thought process to address this issue. Ask any activist how “stupid” the marketplace was in electing Barack Obama to the White House and the majority response will prove this point. So, if the “bad acts” of any MNC outweighed the “good acts” performed to support the economy and society, then the marketplace would know that; the people would “vote” with their dollars, numbering the days of any wayward MNC.

Given this automatic economic voting mechanism, where “election day” for the MNC is every day, is the current and projected level of NGO influence upon MNCs really justified? Which party receives more legitimization?

Yes, MNCs make mistakes. I accentuated the obvious above. MNCs are operated by humans. But so are NGOs. NGOs are run by humans, imperfect humans. NGOs, as well-intentioned as most probably are, are not exempt from making mistakes, and performing “bad acts,” whether by accident, or by intention, or by just plain ignorance. But how is the influence of these imperfect organizations counter-balanced? Unlike MNCs, NGOs are not subject to the same automatic regulatory mechanism of the “vote.” NGOs are not subject to the same daily “election day” as are the MNCs. The motivations and the acts of the NGO are not examined and

Continue reading The Marketplace Is Not Stupid

Who Says Doing the Right Thing is "Right"?

A couple days ago I finished a really great book, Contention and Corporate Social Responsibility by Sarah A. Soule. Although, I purchased this book while wanting to obtain more information about the structure of anti-corporate activism, I bought this book because I also wanted to get additional information on corporate social responsibility (CSR) programs, which are often a knee-jerk response to anti-corporate activist initiatives. Believing that this book was oriented more toward my CSR hunt, and not toward the anti-corporate activism anatomy search, I thought, “Well, I’ll buy this one now while I continue to hunt down more works on the anatomy of anti-corporate activism.”

After receiving this book and jumping into the first chapter or two, I was pleasantly surprised. This book concerns itself more with the structure and process of anti-corporate activism than it does with the response of CSR. To this point, here is an excerpt from a review I wrote about this book. (The full review appears on both Amazon.com and on my Reading List page in my LinkedIn.com profile.)

Although I would have chosen a different title, Sarah Soule turns in a great book here. In this work, Sarah contributes one of the first academic examinations on the structure of anti-corporate activism and its effects on corporate behaviors . . . Sarah examines activist initiatives in two time periods: 1960 to 1990 and then from 1990 to present day (2009). Her findings characterize activism, as it affects the corporation, into two different groupings each with historical context, creating a typology by which corporate analysts can categorize activist efforts and devise mechanisms for coping. This typology can be invaluable to corporate analysts attempting to devise various strategies in response to various anti-corporate activist initiatives.

So, in the end, I received that which I sought, but in an indirect manner due to the abstractness of the book’s title.

Generally, I liked everything I found in the book such as her approach and her argumentation process, but on page 154 I found a comment with which I must take umbrage.

In the section entitled “The Impact of Anticorporate Activism on Corporations,” Sarah talks about the key theme of her book being that anti-corporate movements do matter to corporations. As evidence of this assertion, she points to an earlier discussion in the book citing research into the effects of protest on company stock price, as well as other examples of activist influence on corporations as discussed in the book. Of this influence she says,

“This is good news for activists, of course. But it is also good news for corporations who can find that doing the right thing can actually make good business sense.”

Here comes the umbrage.

The right thing? Who says it’s the right thing? This is an attitude that I have found in much anti-corporatist literature, one which automatically assumes that any activist action against a corporation is “right.” Right is not always right. To quote Bill Clinton, it would depends on “what the meaning of

Continue reading Who Says Doing the Right Thing is "Right"?

About

Richard’s Media Bio

Site Categories

Site Archives

Blogroll