“Thou Shalt not be Good Enough”: (Mis)understanding CSR

Abstract

Purpose -The paper's purpose is to improve understanding of corporate social responsibility (CSR), by critically examining two assumptions taken for granted in capitalist market economies as well as economic theory, and their consequences for CSR. Design/methodology/approach -The two assumptions of resource scarcity and the necessity to outperform competitors, and their consequences for one's understanding of CSR are discussed. Some criticisms of CSR are reviewed in this context. Findings -The paper argues that the named assumptions put pressure on individuals and induce fear, inhibiting individual reflection on the ends and consequences of economic activity. Moreover, if individuals look to organizations for alleviation of fear, this will inhibit such reflection on the organizational level. This lack of reflection leads to CSR being interpreted and practised in narrow ways, for example, as a public relations measure unconnected to core business. Thus, in order to arrive at a more holistic understanding and practice of CSR, the basic assumptions of scarcity and outperformance must be addressed. Originality/value -The paper positions the CSR concept, as well as the problems and criticisms related to it, in a broader historical, cultural and psychological context. Keywords Corporate governance, Social responsibility Paper type Conceptual paper 1. the assumption of the scarcity of resources as the main threat; and 2. the assumption that nobody, and nobody's work, is ever good enough.Both assumptions can be regarded as self-fulfilling prophecies. I contend that unless both are overcome, CSR will remain a misunderstood concept. A better understanding of CSR by firms and their stakeholders, on the other hand, may lead to improved interaction with civil society. Criticisms of CSRSome people protest against the -in their eyes, misguided -notion that commercial businesses should care about much more than their own business. The line of argument is that undoubtedly necessary tasks like protecting the environment or taking care of social issues should best be handled by other parts of society, legislated upon, etc. As long as organizations abide by the rules society has laid down for them (e.g. laws), they are best at doing what they are there for, which in the case of commercial companies is marketing their products and making a profit. Measures of CSR, then, lead to misappropriation of corporate resources (which go into the CSR programme instead of to their rightful claimants) and to misallocation of corporate resources (which are not used for their original purpose, but for purposes to which they are poorly suited). This argument implies the "neoclassical construal of the firm as a nexus of contracts" between managers and shareholders, which is surely the most prevalent view in management and in scholarship (Margolis & Walsh, 2003; see also Mintzberg, 1983).But could not CSR measures in fact increase profits, for example, because they avoid interference by pressure groups or make a company's products more attractive? Th...

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