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ARTICLE REVIEWS
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MANAGERIAL POLICY
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Submitted by: IQRA KHAN
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MB-08-12

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“CORPORATE SOCIAL
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RESPONSIBILITY”
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 Article review to the following three articles in the context of
Corporate Social responsibility (CSR)
1- “Attaining sustainable growth through corporate social responsibility ”
Written by George Pohle and Jeff Hittner
2-“Company Stakeholder Responsibility: A New Approach to CSR”
Written by R. Edward Freeman, S. Ramakrishna Velamuri and Brian Moriarty
2- “The Myth of CSR”
Written by Deborah Doane
The article “Attaining sustainable growth through corporate social responsibility” is written by
George Pohle and Jeff Hittner. Here they explain that CEOs have long been accountable to a
varied group of stakeholders – employees and communities, as well as investors. In climbing the
CSR Value Curve from compliance to growth, companies must understand and act upon three
dynamics in dealing with CSR. These dynamics are:
1-IMPACT FOR BUSINESS: from cost to growth
The maximum benefit from the CSR opportunity takes place when all activities on the CSR Value
Curve become integrated into a single company strategy. These efforts reinforce a company’s
social commitment with ongoing returns, often in the form of goodwill and typically indirectly
from a financial perspective.
2-INFORMATION: Visibility to transparency
Because the actions of companies are more visible than ever before, and customers as well as
other stakeholders have grown accustomed to such visibility, they are leading a demand for more
transparency. In essence, they are asking companies to act in a more open manner.
3-RELATIONSHIPS: From containment to engagement
Foster a relationship with customers– from senior managers to shop assistants, based on
continuous engagement through interaction and providing information they need.

When these activities are done in combination, CSR can become a dimension of a company’s
successful competitive strategy.
 Taking into consideration its SIGNIFICANCE, this article contributes to the new emerging
topic of corporate strategy i.e. “attaining sustainable growth using Corporate Social responsibility
(CSR)”. The feature that makes this article stand in the crowd is its practical statistics of
companies acquiring Corporate Social responsibility (CSR) and its impact on their revenues,
performance and growth. Massive amounts of information and opinions about companies, their
products and practices, are available in every part of the globe, every minute of every day; the
balance of power between business and society has shifted toward society and away from
business. With increased visibility of corporate actions, and fundamental change in customers’
perceptions of companies and their consequent purchasing behaviors, CSR now also brings
financial returns.

Until 80s Corporate Social responsibility (CSR) was considered to be a social

phenomenon, it was in 1979 when Carroll gave a more practical approach to Corporate Social
responsibility (CSR) with his 3c-Sr model. The literature in the 90s tried to answer why some
companies perform better than others and examined if CSR could be identified as one competitive
advantage. For decades companies have regarded as a cost to comply by the regulations of
government. Then came a time when customers themselves started being aware of social
responsibility of companies. They have started demanding more visibility in companies’
operations. So it became an absolute necessity for company to have a change management
within the company towards Corporate Social responsibility (CSR), fulfilling the emerging need for
customers. But now companies are seeing it as basis for growth and differentiation. This article
truly represents this contemporary view of CSR.

The Corporate Social responsibility (CSR) curve introduced in this article very elaborately
explains how a company moves from accepting it as a necessary compliance with local rules and
regulations, then incorporating it in its corporate strategy and finally culture. This in turn
ultimately leads to the increase in financial revenues of firm guaranteeing sustainable growth in
future. One thing that this article lacks is the implicit benefits seeking through CSR i.e. goodwill of
company that also helps in retaining its own employees and customer loyalty.
 So far as my PERSONAL EVALUATION to this article is concerned, the language used in the
article is comfortably easy. And the words, phrases, remarks that are made at the end of each
discussion bring out a “Must ponder!” state of mind in reader. Such denotative expressions
maintain the interest of the reader throughout the article where he consults his knowledge and
findings with whatever has been statistically justified in the article. The best thing about this
article is the visual aid it has used in visually representing the factorial data in form of bar graphs
and line graphs and pie charts.

The article has very smoothly justified that Corporate Social responsibility (CSR), which
companies considered as an unwanted compliance being imposed on them by government and
social institutions, into a fully integrated corporate strategy used as a tool to attain sustainable
growth. This is what we should call turning a duty into an opportunity.

Thus this article gives a very rude approach of Corporate Social responsibility (CSR)
towards attaining company growth only. It measures Corporate Social responsibility (CSR) just as
a tool to earn financial revenues only in the long-run. In my point of view the agenda of
Corporate Social responsibility (CSR) was not raised by people for this purpose. On the other
hand when I see businesses as a profit-seeking enterprises primarily, then I regard this
opportunistic approach of businesses as a perfect combination of being socially benevolent and a
profitable business identity at the same time. Businesses aren’t formed to do good for others
only; but they should refrain themselves from unethical and anti-social practices as a must do.
This is what our business studies teach us in our courses.

So I conclude with the idea that this new concept of corporate social responsibility (CSR)
in attaining sustainable growth in long run opens new horizons to the company in achieving
competitive advantage in today’s intensely competitive market.
 “Company Stakeholder Responsibility: A New Approach to CSR” is an Institute Bridge
Paper based on the research of R. Edward Freeman, S. Ramakrishna Velamuri and Brian Moriarty.
Based on a stakeholder approach, this paper outlines a new capability for organizations to
develop. They explain that Corporate Social Responsibility concept has outlived its usefulness,
because it is flawed in two respects. First, it promotes the “separation thesis,” the idea that
business issues and social issues can be dealt with separately. This endorses the destructive idea
that the underlying structure of business is either not good or is morally neutral. A stakeholder
approach acknowledges the intertwined nature of economic, political, social, and ethical issues.
Centered in the practice of management, it provides the manager with a pragmatic framework
for action. The second flaw with Corporate Social Responsibility is its focus on corporations. Social
responsibility does not only apply to corporations—it applies to all organizational forms. A
stakeholder approach applies as much to an entrepreneurial start-up and to a mid-sized closely-
held firm as it does to a corporation with diffuse ownership.

Ten Principles for “Company Stakeholder Responsibility”

1. Bring stakeholder interests together over time.
2. Recognize that stakeholders are real and complex people with names, faces and values.
3. Seek solutions to issues that satisfy multiple stakeholders simultaneously.
4. Engage in intensive communication and dialogue with stakeholders not just those who are
“friendly”.
5. Commit to a philosophy of voluntarism—manage stakeholder relationships yourself, rather
than leaving it to government.
6. Generalize the marketing approach.
7. Never trade off the interests of one stakeholder versus another continuously over time.
8. Negotiate with primary and secondary stakeholders.
9. Constantly monitor and redesign processes to better serve stakeholders.
10. Act with purpose that fulfills commitments to stakeholders. Act with aspiration toward your
dreams and theirs.
 Taking into consideration its SIGNIFICANCE, this article has put light on a very new idea
“separation thesis” with respect to Corporate Social Responsibility (CSR). This separation is an idea that
reaches very deeply into Western culture. It is reinforced by the disciplines of business, by our major
theoretical frameworks in management, and by many executives and business thinkers themselves. At its
worst it generates an absolutely destructive idea of capitalism—that capitalism is about “anything goes.”
After all, the theory says, “it’s just business.” Viewed in this way, corporate social responsibility becomes
an “add-on” to ameliorate the supposedly harsh consequences of this view of capitalism.

While many of the literature on Corporate Social Responsibility (CSR) up till now discuss all the
good aspects of its idea, but whenever things come to their actionability, they tend to disturb their image
sometimes. The whole concept of Corporate social responsibility (CSR) puts itself somewhere behind
when it comes to profitability of businesses. Although, this self-interest facet of Corporate Social
Responsibility (CSR) is also being identified by some literary scholars, yet no practical grounds have been
created for its remedy. On other extreme the answer to this criticism may be to fully abandon the concept
of Corporate Social Responsibility (CSR); which in turn is totally unacceptable to these critiques.

This article not only identifies the flaws underlying the concept of Corporate social responsibility
(CSR) but present a comprehensive mechanism based on ten principles to uproot these flaws. Through
these principles authors have presented a newer version of Corporate social responsibility as “Company
Stakeholder’s Responsibility”. This concept attributes the CSR as a responsibility of all stakeholders of a
company including customers, suppliers, distributors, financers, government institutions etc.

This article has a weak point i.e. it presents a more of qualitative factors in integrating Corporate
social responsibility (CSR) among its stakeholders. While bringing each and every member of business on
common interest of Corporate social responsibility (CSR) seems like building a castle in the air, its
application is a long process that requires added implicit and explicit cost to business. The article doesn’t
cover the point of how this added cost will be recovered. Businesses ultimately functions for profit
making; thus in the current context authors must bring out any future/prospective monetary profitability
to motivate businesses to go for Corporate social responsibility (CSR).
 So far as my PERSONAL EVALUATION to this article is concerned, the language used in the
article is moderately understandable. The visual attraction of article is nil because it contains no
single illustration. It’s a complete theoretical paper that argues with the authenticity of Corporate
social responsibility (CSR) on judgmental grounds. This article offers no such factual or statistical analysis
of real time examples to support its argument. Each of ten principles is separately explained with the help
of different examples.

The authors argue that Corporate social responsibility (CSR) should not be confined to big
corporations, rather it should be practiced by businesses of all sizes and field. But t he examples quoted
in this article are all of big giant corporations (i.e. coca cola, Nike, Johnson & Johnson etc) who
have considerable finances to support their Corporate social responsibility (CSR) program. So I find it
an incomplete approach on authors’ side that how come they argue on a thing when they don’t hold any
practical justification ground for their findings. Thus I really consider this approach as “building a castle in
the air”. At least authors should have cited at least one or two examples of such small businesses that are
successfully practicing Corporate Social responsibility (CSR). The end article commentary interview
with Charles O. Holliday, Jr., Chairman and Chief Executive Officer, DuPont is a useful insight to
practicality of Company Stakeholder’s Responsibility.

However it’s a nice concept presented against sweetly held Corporate social responsibility (CSR)
concept; especially the separation thesis that has finely connected the conventional CSR practices with the
Capitalistic structure of economy is an excellent move. Although the stakeholder’s responsibility concept is
not proven in the article but it has been presented in a nice way that brings our attention to another
dimension of Corporate social responsibility (CSR) where all the stakeholders should jointly contribute to
the achievement of CSR goals.
 This article “The Myth of CSR” is written by Deborah Doane, who elaborates some
formerly held myths regarding CSR in the light of truth. The unprecedented growth of CSR may
lead some to feel a sense of optimism about the power of market mechanisms to deliver social
and environmental change. But markets often fail, especially when it comes to delivering public
goods. But there are some strong business incentives that have either pushed or pulled
companies onto the CSR bandwagon. For example, boycott threats to Nike or high-profile
lawsuits of obesity against McDonald’s; may see CSR as a strategy for presenting a friendlier face
to the public. Once launched, CSR initiatives may provoke changes in basic practices inside some
companies. But no one could reasonably argue that these types of changes add up to a wholesale
change in capitalism. Ultimately, trade-offs must be made between the financial health of the
company and ethical outcomes. And when they are made, profit undoubtedly wins over
principles.

THE FOUR KEY MYTHS OF CSR:-

Myth #1: The market can deliver both short-term financial returns & long-term social benefits
In reality shareholders don’t wait for long term benefits if CSR fails to provide short term financial
returns.

Myth #2: The ethical consumer will drive change

Surveys show that consumers are more concerned about things like price, taste, or sell-by date
than ethics. The gap between green consciousness and green consumerism is huge.

Myth #3: There will be a competitive “race to the top” over ethics amongst businesses
Companies are naturally keen to be aligned with CSR schemes because they offer good PR. But in
some cases businesses may be able to capitalize on well-intentioned efforts, say by signing the
U.N. Global Compact, without necessarily having to actually change their behavior (Green
washing). While companies are vying to be seen as socially responsible to the outside world, they
also become more effective at hiding socially irresponsible behavior

Myth #4: In the global economy, countries will compete to have the best ethical practices .
Competitive pressure for foreign investment among developing countries has actually led to
governments limiting their insistence on CSR.

CSR can be little more than a public relation’s device – it fails to recognize that it is the
institution of the corporation itself that may be at the heart of the problem. CSR, in the end, is a
placebo, leaving us with immense and mounting challenges in globalization for the foreseeable
future.
 Taking into consideration its SIGNIFICANCE, this article works against Corporate Social
responsibility (CSR) practices being carried out these days. The Corporate Social responsibility
movement has grown so much in recent years from a fringe activity by few earnest companies
like the Body Shop, and Ben & Jerry’s, to a highly visible priority for traditional corporate leaders
from Nike to McDonald’s. Reports of good corporate behavior are now commonplace in the
media, from GlaxoSmithKline’s donation of antiretroviral medications to Africa, to Hewlett-
Packard’s corporate volunteering programs, to Starbucks’ high-volume purchases of Fair Trade
coffee. In fact, CSR has gained such prominence that the Economist devoted a special issue to
denouncing it.
The article has discussed four of the myths associated with Corporate Social responsibility (CSR)
that big corporations use against anti-CSR justifications of critiques. And the way it has brought
out the real picture of these myths actually practiced by these big names is wonderful. For
example one myth says that in today’s world when consumer is much aware, companies race
each other to become more socially responsible. But in reality the race is just to portray one’s
company’s image as socially responsible to get PR more than other company; and for this
purpose companies are even bribing the international associations for support. This is what we
call making the companies naked in front of public.
The article also discusses the counter argument of corporations that they are legally
bound to the interest of its shareholders in first place. But the article complies with this argument
in such a taunting way (in “charming psychopaths”) that corporations may feel ashamed of their
argument. This type of naked faces of companies have become just the work of the media and
newspapers, but this article has really shown itself as socially responsible by bringing real face of
big names in front of its readers. The author has tried to justify with the topic he wanted to
discuss in every way. This piece of paper is new to its kind in literary work.
 So far as my PERSONAL EVALUATION to this article is concerned, the language used in the
article is very casual and easy to understand. Some pictures of criticized corporations are also
given who are now practicing so-called Corporate Social responsibility (CSR) in front of the world.
It has a sarcastic touch when it criticizes the commonly held beliefs about Corporate Social
responsibility (CSR) that it finds its own ways. The add notes inside the article “Charming
psychopaths” has stated corporations as self-interested psychopaths in such an amusing way that
one feels the fact deeply. The only socially responsible thing a company should do is to make
money. The cover picture of two-faced man showing a single face to the world is very meaningful
to the article. It represents the whole crust of the article in this single illustration.

We as a consumer are unaware of the real facts of corporations who feign to be indulged
in social practices. It’s a myth that has been set in our minds that the real motive behind CSR is
the benevolence of corporations. Rather they are indulged in more unethical practices when their
actions and projections are totally different to the world. The article has made these big names
transparent in front of its leaders. And the way it justifies these myths wrong in the light of
economic and consumer behavior is totally relevant to our business studies courses. So
personally I find it very easy to understand the facts which otherwise have been difficult to
understand such deeply held behaviors of corporations. This is a short article but a very
comprehensive one that does full justice to the contemporary anti-CSR activities.
 COMPREHENSIVE CONCLUSION

With increased visibility of corporate actions, and fundamental change in customers’

perceptions of companies and their consequent purchasing behaviors, CSR now also brings
financial returns. This is a proven fact in terms of statistics presented in first article. This might
also be the reason why companies are running towards Corporate Social responsibility (CSR)
these days. Now companies are seeing it as basis for growth and differentiation. But it’s a very
rude approach of Corporate Social responsibility (CSR) towards attaining company growth only. It
measures Corporate Social responsibility (CSR) just as a tool to earn financial revenues only in the
long-run. Even then it can’t be denied that it helps a company in achieving competitive advantage
in today’s intensely competitive market. Corporate Social responsibility (CSR) should be spread
across whole organization, all its stakeholders; only then it can work as an integrated tool. The
anti-CSR critiques call it as a new tool to capitalist theory where big named corporations are using
it for their own good rather than to become socially responsible. This might be the reason that
small businesses aren’t going for Corporate Social responsibility (CSR). However one can’t deny
the fact that ultimately businesses are profit-making enterprises where they are obligated to
produce profits for its shareholders in first place. Then we come in front of a new conspiracy
where corporations are using Corporate Social responsibility (CSR) for their profit-making but are
feigning to be self-less entities who work for the society. But in reality not only they are NON-CSR
but ANTI-SOCIETY. They are engaged in illegal and unethical ways to pose themselves socially
responsible in front of the whole world. So what I conclude from this study of mine, regarding
Corporate Social responsibility (CSR), comprising of three brilliant articles by renowned sources is
that a company should be one-faced and fair in its practices. Either a business should be CSR or
non-CSR fairly. It should not cheat the society by feigning itself being its FRIEND and in real that
back stab them.