Is CSR the philosopher’s stone of modern business management?

Carlos García Suárez. Professor. Instituto de Empresa

1 February 2005

Some recent business trends, the author argues, are perhaps merely old wine in new bottles.

Recently, Spain has witnessed the appearance of concepts and terms associated, in one way or another, with the current overlap between a company’s business processes and ethics in the media and the language of large enterprises. Put simply, this overlap can be seen when we consider whether or not the company should assume responsibilities that stretch beyond the strict fulfilment of legislation, and maximize the return on investment made by its shareholders or owners.

However, the origin of many of these concepts is not a recent one and can be cited in work carried out mainly in the United States at the beginning of the 1980s. Unavoidably, this origin has filled the Spanish language with anglicisms. Such concepts include the particularly interesting term stakeholder management. This is especially common and refers to the existence of a variety of parties interested in the functioning of the company, many without any contractual relation to the enterprise itself. Its main theoretical reference is Freeman (1984). Even more popular today is corporate social responsibility, whose main theorists include Carroll (1979). Other related paradigms which have appeared include reputation management or triple bottom line (environmental, social and economic), sustainability, global reporting, diversity management and, particularly as a result of recent scandals (Enron, WorldCom, Parmalat), corporate governance.

18th-century ideas

These and other similar terms are beginning to be used in our country by business leaders. They are sometimes presented by the media in such a way that they appear as the latest discovery of deep-thinking, strategic deliberations, or as the definitive philosopher's stone that turns a company’s traditional desire for moneymaking and growth into something socially acceptable. In any case, their variety and frequent appearance can create a sensation of confusion and even doubt as to which objectives business behavior should indeed have.

In this context, it would be desirable to see consolidation of concepts and tools, together with a sincere effort on the part of the media, business owners, managers, consultants and academics, to explain these concepts in simple Spanish. Furthermore, and more important, efforts should be made to avoid placing a false and unnecessary cloud of mysticism on ideas that are surely useful and valuable, but which are not radically new and have been the subject of discussion of one kind or another since the times of Adam Smith (1723-1790), and more specifically since the Industrial Revolution.

It would also be a good idea to ask academic circles to create a model that would make it possible to bring all these questions together; not only to satisfy educational and academic needs, but to furnish society with clearly defined principles and simple tools.

Perhaps the first potential immorality we are facing in this context is dealing with these matters in a superficial way. We are more concerned perhaps with exploiting their capacity for attracting the public and the media than with considering in detail what we really want them to mean, in the development of the culture and strategy of our businesses. But there must be no doubt that, in the long term, business leaders in this globalized, highly connected world, will be those who act in sincerity and consistency, as well as those who succeed in anticipating the needs of today’s society.

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