Challenging the CSR Bandwagon
Businesses Should Focus on Doing Business - Ethically
Maybe businesses should focus on what they are good at and stay out of dabbling in worthy causes. Why? Well quite simply, if an oil company does an excellent job at extracting, refining and delivering oil products then it will fulfill its obligations to society. It will employ many people - who all pay taxes. It will give business to many suppliers. It will pay corporation tax. It will boost the economy and fund the taxes and social programs of the elected government.
We would not expect a school, a hospital or a police force to put their scarce resources into CSR programs. They should focus on educating pupils, helping the sick or catching criminals. So why do we expect banks and pharmaceutical companies to divert resources into 'good causes'? Shouldn't they leave that to the organizations dedicated to those causes?
Of course businesses should act ethically. They should treat their customers, their employees and their suppliers well. They should take care with the environment they affect. This is all good business practice that helps corporate improve the performance. Consider this. A bank spends $10m on buildng a nature reserve in its CSR program. If that $10m went into profit instead then it would pay an extra $3m in tax - which would pay for more teachers, nurses and policemen. It would pay say an extra $3m in dividends - which would be better for shareholders and pension funds paying pensions. It would retain say an extra $4m for investment in research or innovation or to strengthen the reserves. Where does the $10m serve society better?
Is CSR a worthwhile focus for corporate time and effort or is it a palliative, a smokescreen or a PR exercise? Perhaps businesses should do well what they do well and leave doing good to the proper agencies.
Paul Sloane speaks on leadership and innovation
Published by Paul Sloane
I am a Speaker & Author of books on lateral thinking puzzles, leadership & innovation. I help organisations to improve creativity and innovation. I give keynote talks and I facilitate brainstorms and worksh... View profile
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2 Comments
Post a CommentDear Paul
I agree with you but would like to twist the argument a bit. If CSR is carried out as you describe it, the business practices are flawed. What is required for leading companies to day is a genuine concern for internal and external environments and stakeholders.
Without that everything the company does becomes void of meaning, which is utterly transparent these days
Paul, Corporations should not necessarily "do" corporate social initiative but they shouldn't be discouraged to fund the organizations who do. Who and what they choose to fund does influence my decision to patronize or invest in those companies. This is as important to me as how profitable they are or how good the products are. It is risky business but is the difference of me being indifferent, a promoter or a detractor of their product or service.