The world is facing the enormous challenges of poverty, global warming, climate change and water, do you think businesses plays a great role on this? Today I will be taking about why CSR 1.0 failed in its strategic approach, Age of Management which does more harm rather than help and how Principles of Responsiveness in CSR 2.0 which requires uncomfortable, metamorphic, responsiveness can make the real change. The Bottom Line for CSR in the Age of Management includes, (a) Strategic CSR is an advancement over CSR as PR, (b) Relies on the business case for CSR (c) Trust businesses to manage collective benefit.
We have been discussing in class that CSR 1.0 or the Modern CSR has failed because of the three curses one of which is the Incremental CSR and this approach does not provide the scale and immediate needed solution. But because of the more systematic approach by applying the principles of responsiveness to the business DNA through value creation, good governance, societal contribution and environmental integrity we can tackle the roots of the problem. One good example of responsiveness as modeled by His Royal Highness Prince Charles of Whales who is leading big on sustainability and has been known to promote the Principles of Responsiveness for the most of his public life.
Another bottom line for CSR in the Age of Management it’s reliability on the business case for CSR but the principles of responsiveness which perfectly exemplified by Interface business transformations which involved sudden changes on how they sold, manufacture, and even reclaimed their carpets from customers and even establishing a carpet leasing structure to save or minimize disposal to the landfills. This business transformation is credited to the successful leadership from the top through its founder Ray Anderson which until now the company is fully committed to this strategy. It is not enough that Anderson initiate the transformation, it requires his hands-on involvement to be successful.
In addition, the Age of Management trusts businesses to manage collective benefit. Many people believe in the notion that most business are profit-driven and only for shareholders. Notwithstanding their sustainability effort, Walmart’s supply chain initiatives have forced its competitors in the retail business to practice a similar standard for product sourcing and supply chain efficiency. This involves undertaking a corporate-wide supply chain ingenuity and profit-driven effort to reduce their operating costs to address pressure from environmental activists. Walmart has partnered with World Wildlife Fund and organizations that are involved in environmental conservations on initiatives to environmentally source sustainable fish and forests produce (ww.worldwillife.org), they have joined Sustainability Consortium, an independent organization created to enforce environmental sustainability. They also have pledged to create a sustainable products index to gauge the environmental impact and sustainability and to eliminate carbon emissions of 20 million metric tons on their supply chain.
Overall, the problem with the Age of Management which includes advancement over CSR as PR, their reliability on business case and businesses as managing collective benefit does not address or failed to address the issues which CSR aimed for. But with Principles of Responsiveness, it all boils down to one thing that it is not completely true that company exist solely because of profit or to serve their shareholders only, it needs clarification and reorientation of its purpose. In the end, serving the society is the outmost purpose of business, through their safe, high quality products and services that is making a positive contribution to the society is the real essence of this principle.
- Visser, W., 2011. The Age of Responsibility: CSR 2.0 and the New DNA of Business. London: Wiley.
- Adey, Margaret, “A New Model of Business-Government policy Dialogue on Sustainability: The Case of Corporate Leaders Group on Climate Change”, University of Cambridge Programme for Sustainability Leadership Research Paper Series: No. 3, 2007
- Kash Ranga, Lisa A. Chase and Sohel Karim, “Why Every Company Needs a CSR Strategy and How to Build It” (Harvard Business School case 12-088, April 5, 2012).