Listening to CSR logic: the reconstruction of the global corporation

The argument is getting old. If you still think that CSR is about throwing money away, giving it to charity, or saving the planet despite the bottom line, you have not been listening properly. In reality, succumbing to the CSR movement is tantamount to accepting a changing socio-economic paradigm in the global business arena. The rules of the game have simply changed. CSR is not about trends; it is about globalization.

It is in part due to globalization and the rapid rise of the Internet that the century-old idea of Corporate Social Responsibility has received so much airtime of late. The fact is that today international and multinational corporations are subject to deep scrutiny since they involve and impact the world on a large scale. Our lives and our futures are wrapped up in the actions of these corporations.

There is no universally accepted definition of CSR today. Moreover, it goes by many other names: corporate sustainability, corporate sustainable development, corporate responsibility, corporate accountability, corporate stewardship, and corporate citizenship, to name a few. What began as an argument for philanthropy, and then changed to an argument for environmental protection, has evolved. As with most ideologies, it is dynamic and organic, changing with the addition of lessons learned. Proponents of the new paradigm talk about integrating and balancing profit, the environment, and society. The pay-off is the sustainability of the corporation itself – corporate optimization.

The fact is, we want our companies to make money this quarter to satisfy the wolves on Wall Street, but we also want our companies to be around fifty or one hundred years from now. In most cases, these desires involve incompatible stakeholders and, therefore, incompatible outcomes. That is, unless your executive team embraces the ideology promulgated by the new CSR movement, and integrates the vision throughout the organization.

CSR is about doing well while doing good. And western capitalist societies are the likeliest places for such a movement to take hold, for they are centres of excellence for constructive criticism, social challenges, freedom of speech, and “show me the money” mavericks. We are, after all, at the centre of the knowledge-based economy. If CSR can make it here, it can make it anywhere!

Innovation is the bailiwick of the knowledge-based economies, and globalization fuels this thirst for breakthroughs. CSR is helping to fuel this fire. It forces us to manage risks beyond the next quarter, and to leverage opportunities for corporate strategic planning. In fact, the triple bottom line concept has moved into the mainstream of corporate planning and shifted the balance of focus irreversibly from a myopic perspective on profit or environment alone, to a fully formed triangle between people, profit, and planet.

CSR is the new currency for corporate credibility. In a world where we are increasingly exposed to Enrons, credibility is a key factor for success. The fact that multinational firms have a global impact heightens the importance of promulgating a coherent, strategically aligned, and integrated global CSR policy.

The most certain thing about lasting change is that it is gradual and seamless – so that we only recognize the destination, not the journey. We are nearing the destination with regard to CSR. We all share in the finite resources of the planet, and we share them with generations yet unborn. To ignore or resist the paradigm shift is to jeopardize the very existence of our companies.

If you have not been listening properly, start listening now. Make a stakeholder list – an inclusive one; identify the impact on each stakeholder group; learn reporting and certification principles; design an integrated global CSR policy and create a CSR report; make someone accountable in your organization for keeping up-to-date on these topics; and communicate regularly with stakeholder groups, even when the news is bad. Corporate optimization means finding an approach to business that keeps your employees happy and
optimally productive, harmonizes environment and technology, gives your customers and your shareholders what they want, and secures the position of the company for the long run.

This is the new CSR. It is not a trend; it is the enlightened reconstruction of the modern global corporation.
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