Can Business Save the World? Mistakes in CSR

Superman-Questions“Most companies have long practiced some form of corporate social and environmental responsibility with the broad goal, simply, of contributing to the well-being of the communities and society they affect and on which they depend. But there is increasing pressure to dress up CSR (corporate social responsibility) as a business discipline and demand that every initiative deliver business results. That is asking too much of CSR and distracts from its main goal: to align a company’s social and environmental activities with its business purpose and values.” – “The Truth about CSR” by Kasturi Rangan, Lisa Chase and Sohel Karim (Harvard Business Review, Jan/Feb 2015).

This is the second in a series of posts on the proper role of business in society. Last time I shared my belief that subverting a for-profit business’s role from serving customers, supporting employees and making a fair profit to that of social engineering is a dangerous and slippery slope. Now I’d like to share some interesting findings from the article quoted above and to encourage other business people to weigh in on this topic too.

First some background about the HBR authors and the research behind their article. Kasturi Rangan is the Malcolm P. McNair Professor of Marketing at Harvard Business School and a co-founder and co-chair of the HBS Social Enterprise Initiative. Lisa Chase is a research associate at Harvard Business School and a freelance consultant. Sohel Karim is co-founder and the managing director of Socient Associates, a social enterprise consulting firm.

They conducted interviews with scores of managers, directors and CEOs during the past decade to learn how companies devise and executive CSR programs. Their findings included:

  • Many companies’ CSR initiatives are disparate and uncoordinated.
  • Most CRS initiatives are run by a variety of managers without the active engagement of the CEO.
  • Most firms are not maximizing their positive impact on the social and environmental systems in which they operate.

Not surprisingly, these CSR experts recommend that firms develop coherent CSR strategies. Specifically, they advise “dividing CSR activities among three theaters of practice: philanthropy, operational effectiveness and transforming the business model to create shared value.”

To make it happen, they advise four steps:

  1.  Pruning existing programs to align with the firm’s purpose and values
  2. Developing ways of measuring initiatives’ success
  3. Coordinating programs across theaters
  4. Creating an interdisciplinary management team to drive CSR strategy

In my next post I’ll share a bit more about what’s involved with these four steps.