Nowadays, it became a commonplace practice among many large companies in the West, to take pride in having incorporated the concept of Corporate Social Responsibility (CSR) into the very core of their operational philosophy. This practice, however, cannot be deemed thoroughly justified because the main conceptual provisions of CSR appear to be utterly inconsistent with the foremost principles of the functioning of a market economy.
In my paper, I will explore the validity of this suggestion at length, while promoting the idea that CRS is best defined as merely another PR-strategy, deployed by these companies, in order to convince people that there is nothing wrong about the process of the privately-owned commercial enterprises taking over the functions of government.
I will also aim to illustrate that CSR is, in fact, the integral part of the neo-Liberal economic agenda, reflective of the assumption that the ideal state of affairs in the realm of economics can be achieved by the mean of allowing companies to be in the position of defining their own approaches towards contributing to the society’s overall well-being.
The paper’s research method will be concerned with reviewing the relevant literature that contains analytical insights into the subject matter in question and elaborates on what can be considered their overall discursive significance.
The methodological soundness of this approach to discussing CSR is predetermined by the paper’s size-wise format, and by the fact that the would-be discussed concept is rather ambiguous – something that can be illustrated by the absence of a universally applicable definition, as to what CSR actually stands for.
As it was mentioned in the Introduction, the existing definitions of CSR can hardly be deemed fully consistent with each other. Nevertheless, it will be appropriate to suggest that these definitions are based upon the same assumption that, while striving to remain commercially competitive, businesses should proceed with reaching this particular objective in a thoroughly ethical and socially beneficial manner (Gholami, 2011).
The main theoretical premise of CSR is that, by choosing in favor of conducting their operations in the socially responsible (ethical/environmentally friendly) way, companies are able to contribute towards increasing the rate of these operations’ long-term commercial sustainability.
In its turn, this premise reflects the idea that, due to being rational agents, both: the affiliates/owners of a particular commercial company, on the one hand, and the rest of community members, on the other, are equally interested in ensuring the systemic sustainability of their shared environmental niche. Hence, the main postulate of CSR – social welfare and corporate profitability- is not only closely interrelated, but they, in fact, derive out of each other (Mackey, 2014).
This postulate, however, is merely theoretical, and as such, it has very little practical relevance. The main reason for this is that the very idea that a particular company should benefit from investing in social projects, as the mean of proving itself a socially responsible commercial entity, is inconsistent the fact that as of today, the debt-burdened economies of Western countries (particularly of the U.S.) have grown utterly stagnant and consequently – vulnerable to the financial crises, such as the one of 2008 (Sanders, 2012).
What it means is that the interest rate-‘fuelled’ economy of the West, as we know it, simply does not have any sustainable future, by definition – something that can be illustrated, in regards to the fact that the budget-deficits of Western countries continue to increase in the exponential progression to the flow of time.
Given the fact that the main purpose of just about any commercial organization is to generate profits, and the fact that due to the above-mentioned, it is specifically the short-term commercial objectives that are now being considered the only legitimate ones by most businesses, the concept of CSR cannot be referred to as such that stands much ground.
As Doane pointed out: “Investments (in CSR) are particularly unlikely to pay off in the two to four-year time horizon that public companies, through demands of the stock market, often seem to require… investments in things like the environment or social causes become a luxury” (2005, p. 25). Moreover, there is no good rationale to believe that the situation, in this respect, will improve any time soon.
The reason for this is that, due to the on-going process of outsourcing, the actual generation of wealth has now been relegated to the Second and Third world countries, which in turn renders more and more people in the West nothing but a ‘social burden’ – even if they happened to be formally employed.
Consequently, this exposes the fallaciousness of the very idea that (with the help of CSR), it would be possible to turn Western countries into ‘welfare states’ in the future – without wealth, there can be no ‘welfare states.’ Yet, it is specifically this idea that continues to serve as the conceptual justification for the adoption of CSR by companies/organizations (Aiginger, 2006).
What also does not allow us to refer to CSR in terms of a legitimate business-practice, is that it is the subject of many different and even mutually contradicting interpretations. After all, it will not be much of an exaggeration to suggest that there can be as many definitions of what the notion of ‘responsibility’ stands for, as there are people on this earth.
However, the higher is the role of the element of interpretation, within the context of how the would-be deployed business-policies are being designed, the lesser is the likelihood for the deployment of these policies to prove an asset.
This allows us to come up with yet another explanation to the fact that, despite being conceptually erroneous, CSR continues to be referred to as a thoroughly appropriate approach to increasing the operational effectiveness of commercial organizations – the concerned practice makes it easier for these organizations to indulge in tax avoidance. This suggestion is consistent with the findings of many empirical studies, which aimed to assess the commonly overlooked effects of CSR.
For example, according to Hoi, Wu, and Zhang, “Using a large sample of U.S. public firms over the period 2003–2009, we find that firms with… excessive CSR activities in a given year, have a higher probability of engaging in tax sheltering” (2013, p. 2027). Therefore, the adoption of CSR by companies and organizations does make a certain sense. However, it differs rather drastically from the originally intended one.
Finally, the fact that the concept of CSR is not discursively legitimate can be illustrated, in relation to this concept’s yet another important postulate, concerned with the assumption that, in order to prove a success, the adoption of CSR (as one of the quintessential principles of business) should appeal to both: manufacturers and consumers. The surrounding socio-economic reality, however, points out to something opposite.
Specifically, to the fact that, contrary to what the promoters of CSR claim it to be the case, the idea of sustainable (ethical) consumption has very little to do with the de facto realities of modern living (Marais, 2012).
After all, as the relevant statistical data indicates, when it comes to buying a particular item, most people do not bother with making any ethical inquiries into what were the qualitative aspects of this item’s production (Carrigan & de Pelsmacker, 2009). This simply could not be otherwise – the most fundamental laws of economics predetermine the perpetual continuation of this situation.
Therefore, rather than being a practically applicable principle of business, CSR is, in fact, more of a pretentious sophisticated, but essentially meaningless buzzword. This, of course, raises a legitimate question – if the very conceptual premise of CSR is rather fallacious, then how come this practice continues to be praised, as something that is indeed being capable of helping companies to prove themselves the agents of social progress?
The answer to this question can be formulated as follows: CSR is nothing but just another PR-strategy, which serves as the justification for the advocates of neo-Liberalism to persist with promoting the idea that there should be no governmental control over the functioning of businesses (Brooks, 2010).
It is understood, of course, that the majority of ordinary citizens will never consider this particular idea even slightly appealing. The reason for this is that people intuitively know that there can be no limits to the corporate sense of greed and that, when allowed to operate in the ‘self-regulative’ mode, privately-owned companies will necessarily end up aspiring to attain a monopoly, and to consequently become thoroughly unaccountable, in the social sense of this word (Golob, Podnar & Lah 2009).
Therefore, in order to put a ‘friendly face’ on the process of private businesses becoming the masters of their own, which in turn results in the lowering of living standards within the society, the advocates of neo-Liberalism came up with the idea of CSR. This, of course, once again suggests that CSR cannot be discussed in terms of a reasonable business-concept.
The main findings of our research, in regards to what are the qualitative aspects of the concept of CSR, can be summarized as follows:
The concept of CSR stands in opposition to the main methodological principles behind the functioning of a free-market economy.
The hypothetical benefits of the integration of CSR into the corporate culture of a particular company/organization can only become apparent in the long-term perspective, which in turn deems the concerned concept inconsistent with the 21st century’s economic realities.
As of today, the concept of CSR serves mainly the purpose of allowing large businesses to divert people’s attention from the actual issues of substance, within the context of how these businesses operate.
I believe that these findings fully correlate with the paper’s initial thesis. Apparently, CSR is indeed best described in terms of yet another capitalist myth, which is there to help to legitimize the complete deregulation of the economy-sector in the West, so that there would be no obstacles on the way of the rich growing even richer and the poor becoming even poorer.
References
Aiginger, K. (2006). Competitiveness: From a dangerous obsession to a welfare creating ability with positive externalities. Journal Of Industry, Competition & Trade, 6(2), 161-177.
Brooks, S. B. (2010). CSR and the strait-jacket of economic rationality. The International Journal of Sociology and Social Policy, 30(11), 604-617.
Carrigan, M., & de Pelsmacker, P. (2009). Will ethical consumers sustain their values in the global credit crunch?. International Marketing Review, 26(6), 674-687.
Doane, D. (2005). The myth of CSR. Stanford Social Innovation Review, 3(3), 23-29.
Gholami, S. (2011). Value creation model through corporate social responsibility (CSR). International Journal of Business and Management, 6(9), 148-154.
Golob, U., Podnar, K., & Lah, M. (2009). Social economy and social responsibility: alternatives to global anarchy of neoliberalism? International Journal Of Social Economics, 36(5), 626-640.
Hoi, C., Wu, Q. & Zhang, H. (2013). Is Corporate Social Responsibility (CSR) associated with tax avoidance? Evidence from irresponsible CSR activities. Accounting Review, 88(6), 2025-2059.
Mackey, S. (2014). Virtue ethics, CSR and “corporate citizenship”. Journal Of Communication Management, 18(2), 131-145.
Marais, M. (2012). CEO rhetorical strategies for corporate social responsibility (CSR). Society and Business Review, 7(3), 223-243.
Sanders, P. (2012). Is CSR cognizant of the conflictuality of globalization? A realist critique. Critical Perspectives on International Business, 8(2), 157-177.