of a crisis. This rationale once again risks confusing public
relations with social and business results.
A few corporations, such as Ben & Jerry’s, Newman’s
Own, Patagonia, and the Body Shop, have distinguished
themselves through an extraordinary long-term commitment
to social responsibility. But even for these companies,
the social impact achieved, much less the business
benefit, is hard to determine. Studies of the effect of a
company’s social reputation on consumer purchasing
preferences or on stock market performance have been
inconclusive at best. As for the concept of CSR as insurance,
the connection between the good deeds and consumer
attitudes is so indirect as to be impossible to measure.
Having no way to quantify the benefits of these
investments puts such CSR programs on shaky ground,
liable to be dislodged by a change of management or a
swing in the business cycle.
All four schools of thought share the same weakness:
They focus on the tension between business and society
rather than on their interdependence. Each creates a generic
rationale that is not tied to the strategy and operations
of any specific company or the places in which it
operates. Consequently, none of them is sufficient to
help a company identify, prioritize, and address the social
issues that matter most or the ones on which it can
make the biggest impact. The result is oftentimes a hodgepodge
of uncoordinated CSR and philanthropic activities
disconnected from the company’s strategy that neither
make any meaningful social impact nor strengthen
the firm’s long-term competitiveness. Internally, CSR practices
and initiatives are often isolated from operating
units – and even separated from corporate philanthropy.
Externally, the company’s social impact becomes diffused
among numerous unrelated efforts, each responding to
a different stakeholder group or corporate pressure point.
The consequence of this fragmentation is a tremendous
lost opportunity. The power of corporations to create social
benefit is dissipated, and so is the potential of companies
to take actions that would support both their communities
and their business goals.