The Social Responsibility of Corporations Is To....

Milton Friedman (1962, 1970: 33) famously asserted, "There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." His 1970 article in the New York Times Magazine elaborates his rationale, including the misuse of principal's investment capital by the agent and the notion that social responsibility equates to a pseudo-tax of the corporation.

In the past decade or so, though debates about corporate social responsibility (CSR) remain (May, Cheney, & Roper, 2007), most practitioners and academics have moved beyond Friedman's thinking, determining that CSR provides numerous benefits both to the organization and to multiple stakeholders. Job applicants find organizations with CSR programs as more attractive places to work, customers value the community commitment implied by CSR, and CSR initiatives bestow a license to operate in the local community. Some research suggests that CSR programs can provide a financial advantage or a tax reduction. (I won't even mention how CSR can't possibly make up for the externalities involved in industry.) In 2013, India mandated that corporations meeting certain criteria spend 2% of its profits (determined by averaging profits in the past three years) on CSR programs. Even without these incentives or requirements, some executives firmly believe that good ethics demand investment in CSR.

This is not to say that CSR programs give firms leave to perform irresponsibly in other areas or that all CSR programs are created equal. In some cases, companies with a reputation for CSR can pay a penalty in reputation costs when they engage in harmful behavior. If CSR initiative are seen as inauthentic or fail to resonate with the company's strategic mission, values, or core competencies, stakeholders will be suspicious of them. Overall, though, investment in CSR should be viewed as a necessary strategic initiative.

Although companies provide varying levels of detail on public pages, then often like to tout their CSR and environmental programs with extensive information and photographs. I was surprised , when I was researching Amazon's CSR activities for this blog, to find very little on their website relating to community involvement and corporate philanthropy. After some digging, I found a very sparse section on "Amazon in the Community." There, the company summarizes their philosophy on CSR:

At Amazon, if we do our job right, our greatest contribution to the good of society will come from our core business activities: lowering prices, expanding selection, driving convenience, driving frustration-free packaging, creating Kindle, innovating in web services, and other initiatives we'll work hard on in the future.

I couldn't really believe it: this credo seems straight from Friedman! As reported by Slate, complaints about Amazon's penuriousness were published as early as 2007. In 2012, The Seattle Times called Amazon a "virtual no-show in hometown philanthropy." Their article reported, "several current and former Amazon employees said they have wanted to change the company culture to encourage more giving. But colleagues told them not to bother — they'd be better off figuring out how to do good on their own." One employee who asked if he could arrange for a donation to a non-profit directly from his paycheck was informed he would be charged a 6% fee by the payroll provider.

Since these exposés, Amazon seems to have increased its CSR activities. Their community page lists a number of non-profit organizations who have received grants or in-kind donations. Amazon also mentions employee volunteer efforts, but provides no details. Even before Amazon was criticized for their lack of largess, they did use their visibility to increase donations from individuals. After 9-11, Hurricane Katrina, the Japanese Tsunami, and Hurricane Sandy, Amazon posted notices that allowed their customers to make 1-click donations to the American Red Cross.

More recently, they have introduced Amazon Smile. When customers shop through the smile.amazon.com portal, 0.5% of their purchase total is donated via the AmazonSmile Foundation to a non-profit selected by the customer. (On Huffington Post, Brady Josephson warns how this program might prove disadvantageous to charities.)

Though Amazon has made some positive strides in the past few years, primarily by encouraging giving through customer efforts, as well as through increased donations to non-profit organizations, to meet the minimum expectations of key stakeholders, they need to increase their CSR efforts. Some stakeholders who are dissatisfied with current efforts include employees, vendors, and the local community. Simply by listening to the needs of these groups and determining how they might meet these needs through their core competencies would be a productive starting point. Outlining strategic CSR focus areas can maximize the impact of the CSR initiatives. Employing a corporate social responsibility professional can give CSR a higher profile in the company and give a centralized point for coordination and logistics and offer consistency and better communication.

As both an intrigued observer and Amazon customer, I am hopeful that Amazon will continue to build on the momentum generated by the launch of AmazonSmile.

References

Friedman, M. 1962. Capitalism and freedom. Chicago: University of Chicago Press. 

Friedman, M. 1970. "The social responsibility of business is to increase its profits," The New York Times Magazine: 32-33.

May, S., Cheney, G., & Roper, J. 2007. The debate over corporate social responsibility. Oxford: Oxford University Press.

But I'm Not in the CSR Department!

Some readers may feel they can't make an impact for good at work because they aren't in their organization's CSR department or their company may not have events in which employees can participate. Even if you are in that position, you can become a social intrapreneur in your company to promote positive social change. Social entrepreneurs are those individuals who create a mission-driven organization, usually a for-profit company, to solve a social or environmental problem. Social intrapreneurs work within the boundaries of an existing for-profit company to solve social or environmental ills. (Gifford Pinchot, founder of the Bainbridge Institute, is credited with coining the term "intrapreneur" - see his Ten Commandments for intrapreneurs here.)

In Forbes Magazine, Joseph Agoada wrote a column, "2014's Most Valuable Employee: The Social Intraprenuer" with a promise to provide strategies for social intrapreneurs during the upcoming year. Net Impact has published a report, Making Your Impact at Work: A Practical Guide to Changing the World from Inside any Company, that includes steps an employee can take to become a social intrapreneur as well as case studies of successful intrapreneurs. Another toolkit is available through the League of Intrapreneurs, an organization founded to support "corporate changemakers who are working to transform business from the inside out." SustainAbility has produced its own guide, The Social Intrapreneur: A Guide for Corporate Changemakers. These guides and toolkits provide practical, step-by-step plans for tackling an issue about which you are passionate.

Social intrapreneurship may not be a common phrase in corporations, but attention to the phenomenon is growing. The BMW Foundation, created by the famous car manufacturer in 1970, has identified social intrapreneurship as a key focus area. The foundation views social intrapreneurship as a vehicle that benefits employees, companies, and communities. Benefits to companies are explored in a 2013 Guardian article, "How Does a Social Entrapreneur Add Value to a Business?" Author Emma Stewart asserts that social intrapreneurs provide innovative products and services, such as GE's Ecomagination line and Levi's Water
"Superheroes in Business Suits: Why the World Needs Social Intrapraneurs" by Nate Silver discusses the solutions to social challenges that arise when social and environmental change is informed by functional business expertise and supported by corporate networks and resources.

In the case of Levi's Water>Jeans, the corporation benefited through a new, innovative product that meets the needs of consumers who want to have less of an environmental impact. Employees benefit from the sense of meaning and accomplishment from achieving a significant impact in terms of reduced water usage in the production cycle of denim jeans.

Any employee of any business can make a case for a social intrapreneurship project; however, some organizational cultures contribute to the success of social intrapreneurs. Net Impact found that the support and openness of managers provided the best context for social intrapreneurship.

Now that you know you don't have to be in the CSR department to advocate for positive social and environmental change, what passion project will you advance at work?

Brookhaven National Laboratory Gives Back

The Adopt a Platoon organization was formed to support deployed military personnel. Individuals, organizations, and companies who adopt a platoon pledge to sent at least one care package a month along with cards and letters through the adopt-a-platoon program, though AAP also has other campaigns interested parties can join.

Brookhaven National Laboratory (BNL), a research institution funded primarily by the U.S. Department of Energy, is one organization that participates in the AAP program.

Photo by Brookhaven National Laboratory. This work is licensed under a Creative Commons Attribution 4.0 International License.

Brookhaven doesn't provide a section on their website about employee volunteer programs, but it does seem that many employees feel called to serve their nation and community. In addition to the AAP initiative, employee volunteers recently provided gifts and gift cards for those in the community who might not otherwise have the resources to celebrate through the Community Youth and Family Services Agency's Adopt-a-Family Program. Tara Shiels of the Lab’s Community Relations Office, who coordinates the Brookhaven Lab donations, remarked, “It was amazing. On collection day, the gifts just kept streaming in to our conference room. It really put me in the holiday spirit.” The lab's press release provides photographs from Brookhaven National Laboratory Adopt-A-Family Activities.

One of the past activities that caught my eye was completed in 2010, when delegates from the lab attended the Federally Employed Women (FEW) annual meeting in New Orleans. Attendees from the lab, along with some spouses, spent two hours making 335 booms filled with natural material like hair for Matter of Trust to help soak up oil from the BP oil spill.

FEW conference attendees from BNL with the pile of 335 booms they made to help clean up the oil in the Gulf.

MaryAnn Maggio, an employee of BNL who had been heartbroken when watching the coverage of the oil spill, decided to arrange the service activity in conjunction with the FEW conference. Maggio reflected on the experience, “It’s about women being passionate and making a difference. I think we made a good showing.”

BNL's community outreach activities show the diverse forms social action at work can take and demonstrate that not all activities need to be coordinated by someone in the CSR or community relations department. Any employee with a passion can marshall an organization's resources - human or otherwise - to address a social issue.

Mazda's Drive for Good Event

This winter, Mazda introduced a Drive4Good campaign. Like Subaru's "Share the Love" event, Mazda is allowing buyers of new Mazdas to select a charity from a list of four national organizations (Saint Jude Children's Hospital, The American Red Cross, the American Heart Association, the Mazda Foundation, and selected local organizations. 

(Aside: Mazda is missing the animal lover target market with their nationwide list since they haven't selected an animal-related organization, and three of the four organizations are not on the PCRM Humane Seal list of charities that refrain from engaging in or funding animal testing. In fact, this list makes me personally less likely to be interested in Mazda cars.) 

A unique aspect of the Drive4Good campaign is that for each test drive taken during November 25, 2013 through January 2, 2014, Mazda pledges an hour of volunteer time by dealers or employees.

To engage consumers, Mazda is promoting the #MazdaDrive4Good hashtag for social media sites. So far, almost $60,000 has been donated and almost 40,000 volunteer hours pledged for 2014. It will be interesting to how having a quota of volunteer hours determined by consumer test drives will change the implications of volunteering. If employees feel pressured to volunteer because of a sales promotion, it will likely create negative feelings and reduced meaningfulness. However, if the volunteer hours were going to be completed anyway, the employees would not feel any additional pressure, though the pledge itself might be hollow. So far, I can't find information on the administration of the program, but I will keep my eye out in 2014 for news.

Partnering with WWF-Pakistan

photo credit: NotMicroButSoft (Bedori Top Expedition in Jan 2014 via photopin cc

The Nation, an English-language paper in Pakistan, reported that employee volunteers of Lucky Cement Limited planted mangroves saplings at the WWF Wetland Center, Sandspit.

Anwar Naseem, Senior Director Operations, WWF Pakistan praised the efforts of Lucky Cement, observing, “Climate change is not only a slogan anymore; it has become a sad reality and a potential threat to our future. It is very important for the corporates to come forward and play their role in environmental conservation."

Until writing this post, I didn't realize that wetlands conservation was a priority for Pakistan, but there is a comprehensive Pakistan Wetlands Program supported by the government and many NGOs. The Salahif Organization reports:

Despite the generally arid nature of Pakistan's climate, the region supports an estimated 780,000 ha of wetlands that cover 9.7% of the total surface area of the country. In excess of 225 significant wetlands sites are on record in the prototype Pakistan Wetlands GIS Database developed during the PDF (B) Phase of the Pakistan Wetlands Program. Nineteen of these have been internationally recognized by the Ramsar Convention Bureau as being of global importance.

As evidenced by the photograph above, Pakistan's coast is home to several nesting sites for marine turtles. Overharvesting and pollution have negatively impacted the turtle population. The wetlands program helps not just turtles, but the entire ecosystem. Employee volunteer activities like that of Lucky Cement can play a role in creating awareness, fostering education, and reversing ecological damage.