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MONTHLY FEATURE

December 2002

Corporate Social Responsibility:Serious or Just a Trendy Fad?

Are you a Sceptic or a Convert - do you see CSR as an expensive waste of time, a trendy option or a serious business activity? Whatever your current leaning, an article in the Harvard Business Review (HBR)[1] - and our take on it - may help you decide.

The HBR article outlines research on the "earmarks of fads". This MHCi monthly lines up CSR against their eight earmarks to see how CSR stacks up or whether it should be dismissed along with other fads as the article says: "suited for a simple world, they have limited utility in the real one."

 

The eight fad tests:

1. Simple: "Fad concepts are easy to understand and communicate and tend to be framed with labels, buzz words, lists and acronyms." CSR has a fountain of labels and acronyms (so many that we have set up a Glossary on the MHCi web-site to help provide clear definitions) and this is certainly one of the major downsides in making CSR a serious management tool. During a presentation on CSR to the ESCP European School of Management in Paris (April 02), I asked the graduates and postgraduates to write an 'Elevator Pitch[2]' to define CSR. Despite a generous prize, there were no takers....two days of debate and presentations on CSR had opened up more issues than the students could easily summarise. Hence CSR is certainly not easy to understand!

2. Prescriptive: "Though a fad's fundamental ideas might be sound, the need to be simple but prescriptive makes their action points easy to misinterpret or inappropriately apply." One thing about CSR is that, although the prescription is a large one, it does not have to be taken all at once and the instructions for its ingestion are usually very clear. For example, practitioner Adrian Henriques details an action plan for stakeholder M dialogue and gives clear, methodical guidelines in his short work Sustainability- A Managers Guide[3] (BSi, 2002). But as in the old saying 'You can bring a horse to water but you cannot make it drink,' there is a view about CSR that it cannot, and should not be, over-prescriptive although we have argued before that some legislation is necessary to level the playing field.

3. Falsely encouraging: "...all kinds of fads are better at raising hopes than delivering results..." CSR highlights and gets to grips with major corporate issues. A company focussing on CSR is usually doing so not only because it is convinced of the tenet "Doing well by doing good" but also because the management is aware of risks highlighted by its stakeholders. Monsanto, for instance, is changing its company culture through its CSR commitment and is positively reinventing itself[4].

4. One-Size-Fits-All: "Fads claim universal relevance, proposing practices that adherents say will apply to almost any industry, organisation or culture..." That CSR can be addressed by any size of company from trans-nationals like Shell and BT to SMEs like Bovince Ltd[5] is true. Yet the needs of these companies, as well as the scope for CSR, differ so their CSR engagement has to be tailored to the requirements of their stakeholders, the company aims and their resources.

5. Easy to Cut-and-Paste: "Because fad management ideas must be simple and easy to apply, they're amenable to partial implementation."

The beauty of CSR is that a company can test the sustainable waters before going for a paddle and way before considering total immersion - you can start with partial implementation. But, CSR is a process: two things will ensure that the CSR activity is not tossed aside like a fad: one, the benefits of CSR will kick in (for example, improved recruitment and retention or fuel savings based on a new environmental approach) and second, increased stakeholder engagement will fuel the engine of CSR involvement.

6. In tune with the Zeitgeist: "Because fads focus on the concerns of the moment, they tend to apply to a few specific issues rather than addressing the fundamental weakness or soundness of overall business practice" CSR focuses on modern business weaknesses be they in human resource management, corporate governance or in (missing) environmental policy. No one would disagree that each one of these is a key and meaty issue: CSR does not duck them. Further, a thorough dialogue with a firm's stakeholders will draw out all problems and concerns not simply the topical or petty ones.

7.Novel, not radical: "..their freshness is often superficial, and, as such, fads don't unduly challenge basic managerial values." CSR has strong historical roots, whether you look as far back as Greek Ethics or Victorian Corporate Philanthropy, so the concept is hardly novel. CSR does ask awkward questions and argues for change so if the will is there at CEO level then real strategic and sustainable change can take place[6].

8. Legitimized by Gurus and Disciples: "Many fads gain credibility by the status and prestige of their proponents or followers, rather than through empirical evidence." The fact that governments (including the EU), universities, businesses, NGOs, and other associations are running with and promoting CSR is a sure sign that there is more substance here than snake oil. Innumerable social reports show faith and speak volumes. There are carefully considered books by an increasing number of well-informed CSR thinkers and practitioners such as Michael Hopkins[7]. CSR is also an issue that is increasingly being given an airing in the media, whether in discussion on BBC or in print in The New York Times or The Economist[8].

In their review of fads and management classics, Miller and Hartwick comment that "if a management approach shares most of the fad features described here, beware. If it looks too simple to work, it probably is." And if you are still not convinced by this article that CSR is not a fad but a real management tool, then you can base your continuing research on Miller and Hartwick's closing paragraph:

Does the approach have a track record for performance and measurable outcomes in similar companies facing similar challenges? Does it address problems or opportunities that are high priorities for our company? Are the changes it would require within our company's capabilities and resources? Yes answers to these questions suggest an approach likely to pay off and endure.

[Contributed by Ivor Hopkins, Director and Partner, MHCi]

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[1] Danny Miller and Jon Hartwick "Opinion - Spotting Management Fads" Harvard Business Review, October 2002

[2] A maximum of three minutes to present the potential impact to a CEO's company in the three minute ride up to the Executive Suite .. but see 5 minutes with the CEO www.mhcinternational.com/CEOandCSR.htm

[3] See www.henriques.co.uk

[4] insert reference

[5] see MHCi webvid with Peter Rosen from Bovince - www.mhcinternational.com and an article on SMEs in CSR and SMEs

[6] The obverse was true at Enron where senior management used CSR activity as PR only, to mask their illegal activities. If they had taken CSR into the core of the business and made it a real corporate value, instead of cynically exploiting it, then Enron would not have collapsed

[7] See Michael Hopkins: The Planetary Bargain: CSR Matters (Earthscan, April, 2003, forthcoming)

[8] Which does take a rather negative view - see Is CSR dead in the water?