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Limits of CSR: mere lyrics versus the current political economy paradigm


Natalya Turkina

By

September 6th, 2013


Natalya Turkina endeavours to pin down and assess the notion of corporate social responsibility.


When I started to research corporate social responsiblity (CSR) a friend of mine exclaimed: “So you are studying something that does not exist!” My interest did not decrease after that, although I got many skeptical comments from some professors as well. Probably for many, the debt crisis in the Eurozone or the reasons of the financial crisis of 2007-2009 seem to be more up-to-date and crucial topics for research. Why? Because they are all about money – the key issue of the current economic paradigm.

CSR, on the contrary, has become a vague object for research, which presents some methodological and even conceptual problems. How to determine it? How to measure its effectiveness? What are the driving factors? And what should a benchmark look like? All these questions are growing in number but still stay unanswered. However, in my view, this growing interest in CSR is not only all the rage but actually a sign of the shift in the existing political economy paradigm.

Notably, scientific interest has been growing in parts of the world other than North America and Europe. The overview of developing and emerging economies adds to or sometimes contradicts the general concept of this phenomenon, which previously had already been relatively widely-researched in the context of Anglo-Saxon economies. However, all these researches sometimes start to look just like fuzz and buzz and the research object itself reminds nothing else but fluff created by corporations in their attempt to react to or anticipate reactions from possible stakeholders and keep them silent. In other words, it is indeed difficult to analyze something that can change from time to time, from corporation to corporation, from country to country. That is what makes CSR a difficult field for research, although not a minor one.

CSR is not just a management tool, not just a psychological issue, not just a result of institutional pressures, not just the nexus between society and business. The phenomenon of CSR covers many aspects of many fields of knowledge; but the major difficulty of its understanding still lies in the differing meaning of CSR established by different companies. According to Alex Carey, an Australian pioneer of the study of corporate propaganda, “the twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power and the growth of corporate propaganda to protect corporate power against democracy”. It cannot be said better.

Unfortunately, CSR in its present state reminds more a form of propaganda rather than truly socially and environmentally justified agenda. CSR is a corporate agenda. In the case that it is a good agenda it can meet some social needs and tackle environmental problems. But in the case that it fails to do so there is no corporate responsibility for these failures. Yes, a company can be punished by indirect fines: stock prices may go down, some NGOs may protest, in the worst case it may lose a license to operate. However, fulfilling CSR agenda remains a purely corporate prerogative and very often it is far from real social needs and environmental challenges.

Thus, CSR is a tool of corporate power or a burden depending on what form of CSR and national context we are talking about. Nevertheless, in most of the cases CSR will remain limited in terms of the scale of problems it can address. At the local level, such untouched issues can be found anywhere where the focus is artificially shifted from more serious problems (e.g. high level of local pollution) to window dressing activities (e.g. some charity and philanthropic activities). At the global level, the situation is even worse: combating poverty and malnutrition, solving water supply problems in many regions, and many other global challenges often are not met by companies because these issues simply stay outside of the corporate “zone of activity”.

Then the question arises: how much should we expect from corporations? Given that many MNCs are financially bigger and politically more powerful than a number of state economies it is logical to expect corporations to take the high road. Otherwise, we will get stuck in a situation where we are satisfied with any CSR report even though it has no significant impact, and does not bring us closer to a state which can be called a better, cleaner, fairer and happier place to live in. It is all lyrics.

Unfortunately, nowadays the political and economic paradigm is based on the value of money and financial efficiency, not a long-term aim. However, some signs of change can be observed and the shift in this paradigm will sooner or later occur. That is why all this growing interest in CSR and sustainability, although sometimes just a following of “fashionable” trends in science, will inevitably enhance this shift. Besides that, such indicators of socially responsible activity as the growing number of social enterprises and initiatives show that we are on the right way.

References

Carey, Alex (1997): Taking the risk out of democracy. University of Illinois Press, p.18

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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