Needless to say, the industry I myself work in — higher education — is in no way immune from sub-par business ethics. (Those of us involved in the teaching end of higher education don't like to think of it as a business, but at some level that's what it is, as long as a fee is being charged.) And what else can I call it but bad ethics, when a university offers courses teaching students to manipulate forces that don't exist in order to generate effects that don't happen?
I just saw my old friend and former colleague Mieko Nakabayashi. She is now a bright star in the Democratic Party of Japan (DPJ) who is running to represent Kanagawa's first district in Japan's lower house in the Aug. 30 national election. In many ways, she epitomizes Japan's opposition the DPJ: She is hard-working, innovative, and conservative on budget issues.
Mieko was doing "yuudachi" (evening campaigning at subway stations, targeting people coming home from work). This aspect of Japanese elections is the core of democracy here; the candidate and her staff burst on to the public squares near commuter railway stations to make the case for their candidacy. A DPJ politician who introduced Mieko harshly criticized former prime minister Junichiro Koizumi's deceptive administration, which he said only focused on postal reform. Today is the first official day of Mieko's campaign and she is working from 6am to 9pm each day to get her message out:
True to her unique background working on budget issues at the U.S. Senate years ago, she is a blue dog (in fact, her campaign color is marine blue, a link to Yokohama's maritime culture), fiscal conservative. In line with the top pillar of the DPJ platform, her key message is, Japan must stop wasting money. It is already the most in debt rich country in the world. Like the GOP in the United States, Mieko compared Japan's budget to a household, asking passersby whether they would feel OK with running a household with such high levels of debt (to income).
Regular readers will know that, over the last month, I've posted 3 blog entries critiquing the term "corporate social responsibility" (CSR). I've asked, rhetorically, whether the "C," the "S," and the "R" make sense.
When walking into a reception filled with people I need to meet, I've always been able to turn it into an enjoyable experience by asking people what kind of volunteer work they do. It's even more fun for me when they're involved on nonprofit boards; this opens up a world of wonderful conversation--all the way from learning about the work of the organization, to how the person found it, to the fascinating group dynamics of boards, to leadership, etc.
Let’s face it: there is no such thing as a ‘sustainable brand.’ Achieving true sustainability means constantly thinking about ways of giving back more than a company takes from the environment and society. In essence, sustainability means creating tangible value for stakeholders.
Trust: Why Business Lost It, And How To Win It Back (Part 3 of 3)
If business wants to regain the public’s trust, they’re going to have to be trustworthy, and employees are the key. Here are three basic steps to engage your employees, build social capital, and win stakeholder trust.
There's a lot here, so take your time with it, read it in pieces, and as always, share your thoughts and insights.
Trust: "Can I get a loan?"
Many companies are turning to Corporate Social Responsibility as a strategy to win back the trust of their stakeholders and customers. But there is an irony here. For this strategy to work, it requires the very ingredient it seeks to generate - trust. Let’s consider exactly what a company is proclaiming when they use the phrase “Corporate Social Responsibility” (CSR).
CSR is a form of corporate self-regulation. Businesses promise to obey the law and maintain ethical standards in their activities. They are promising to promote the common good of the communities in which they operate, and proactively curtail any and all functions that may cause harm, whether specifically illegal or not. The popular maxim of People, Planet and Profit is the triple bottom line. Essentially, the company is taking responsibility for their actions and how they impact: a) the environment, b) consumers, c) employees, d) communities, e) various stakeholders, and f) the entire public sphere. It is a pretty significant commitment.
So, why in the world would I trust you with any of this ‘self-imposed’ regulation and prioritization if I don’t trust you in the first place? You cannot prove you are trustworthy by asking people to trust you even more.
This time around I want to share some thoughts and ideas that came up for me this week about CSR and the conversations we have about it (and as a preview, if you keep reading, you’ll get to hear what Elvis Presley thinks of sustainability).
Critics of President Obama's pick for the US Supreme Court are trying to turn the assertion that Sonia Sotomayor is "empathetic" into a negative. And yet there is research into moral psychology dating back at least as far as Adam Smith's Theory of Moral Sentiments that makes clear the role of empathy in ethical decision making (see reading list below).
Among the things one can’t avoid noticing after living in North America for more than two years is the bizarre use of the ‘S-word’. It recently keeps popping up in the context of health care reform in the US but it also rears its allegedly ugly head in many other contexts.
DC's public school system has 45,000 students and an abysmal dropout rate of about 50%, typical of large cities. With a goal to remedy this dropout "catastrophe" (Gen. Colin Powell's term), while being constrained by a tight economy, DC Chancellor Michelle Rhee is looking to- in her words - "leverage opportunities for the greatest change."
While some corporate leaders have been well meaning advocates for corporate social responsibility, early adopters have been concerned that CSR will only catch on in a serious way if we can prove its value to the financial bottom line.
Richard Buery, 37, will soon depart from his position as Founder and CEO of Groundwork in East Brooklyn, N.Y., to head up one of New York City's oldest and most venerated institutions, The Children's Aid Society. Buery himself grew up in East Brooklyn, where more than half of the population lives below the poverty line, and with the highest crime rate in all of New York's five boroughs.
After attending Stuyvesant High School, a magnet school in Manhattan, and continuing on to Harvard College and Yale Law School, Buery returned to his home community to establish Groundwork, a profoundly effective organization that helps young people to achieve academic success. Just a few years earlier, in 1999, Buery co-founded iMentor, a highly successful mentoring organization.
As the newest leader of Children's Aid, Buery will head the organization founded by 1850's social reformer and innovator Charles Loring Brace (who preceded the term social entrepreneur by well over a century). Brace and Buery share the vision that all children deserve the opportunity and society's support to help them to become productive and successful adults.
A couple of weeks ago, I asked Why the "C" in "CSR"? After all, not all companies are corporations, and most people interested in CSR seem really to be interested in the ethical responsibilities of companies quite generally. Today's question: Why the "S" in CSR? What's so social about Corporate Social Responsibility? The short answer, presumably, is that CSR is intended to get managers to think not just about their responsibilities to shareholders, but to society more generally.
The report offers insight into what consumers feel makes a green corporation stand out, their perceptions of brands, and where their spending is going in the next year. A global attitude toward green issues is painted by the data. Apparently the U.S., though its heart may be green, is more focused on the greenback.
The United States tops the list of countries where economic concerns overshadow environmental ones. The 17% of U.S. consumers more concerned about the environment than the economy stand out in stark comparison to Brazil's 62% and India's 53%. Economic concern is mirrored in the top reason given for not purchasing green products and services – 64% of those in the U.S. consider these too expensive. (Consumers in other countries feel more limited by the availability.) The U.S. consumer does plan to spend more on these products and services over the next year – at least 39% of those surveyed do. However, the extent to which they plan to raise their spending places them at best in the middle of the seven countries surveyed. This is not to say that U.S. consumers don't feel that being green is important, they do, just not as much as consumers elsewhere.
"CSR" stands for "Corporate Social Responsibility." Just what "Corporate Social Responsibility" itself means is subject to more than a little debate within CSR circles. There's no clear definition, though there seems to be rough agreement that it has something to do with corporations, and their social responsibilities.
(I've blogged before about problems with CSR: Down With CSR! Up With Business Ethics!)
Today's question: Why is there a "C" in "CSR?" That is, why is CSR about specifically Corporate social responsibilities? To see why the "C" is odd, it's important to note that not all businesses are corporations, and that at least some (maybe not all) CSR advocates define CSR in such a way that it at least seems relevant to all commercial organizations. (At least one CSR textbook goes so far as to define "business ethics" as a sub-topic within CSR.) Certainly lots of CSR advocates take the term to be at least roughly equivalent to, and perhaps a superior replacement for, the term "business ethics." So why the focus on corporations in particular, rather than businesses in general?
Some possible answers:
1) Corporations have unique social responsibilities, ones that make it worth singling them out. Well, corporations do have some special characteristics (aggregation of labour & capital; separation of ownership & management; limited liability, etc.), but none of them is unique to corporations.
2) All the biggest, most important companies are corporations.That's false. The accounting firm Ernst & Young, for example, is one of the biggest companies in the U.S., and it's not a corporation. It's a Limited Liability Partnership. Trusts and co-operatives can also be pretty big and pretty important commercial entities. Presumably they have social responsibilities too.
Interview with Jim Redden, Institute of International Trade, University of Adelaide (Australia), about CSR as required course for business undergraduate students. http://evolvingchoice.com
Should CSR training be mandatory for all business students?
It seems that if we are to have corporate citizenry at all levels of business, this needs to be the case. Currently most CSR managers are internal hires, coming either from ‘corporate communications’ departments or technical backgrounds. It’s much harder to find specialists who have the training to execute the concept of ‘doing well by doing good’.
However, most universities have been slow to offer students the option to learn about CSR, let alone making it a core component of business degrees.
The University of Adelaide has recognised the need to incorporate CSR into their business curriculum. Their ‘Corporate Responsibility in Global Business’ course started out as a Masters elective, but in 2010 will become a compulsory subject for Bachelor of Commerce students in their final year.
When is it a good thing to have a culture of secrecy within a company? Some would say 'never' - that it is always a good thing when you get maximum disclosure on all matters. I'm not so sure.
Take Apple as a case in point. The company has loyal fans within its customer base because of the superiority of its product design, and its overall 'cool' cachet.
For some of the campaigners, it is way too secretive. It doesn't, for instance, disclose the identity and location of its suppliers. It doesn't produce an integrated sustainability report. It is heavy handed in stopping people disclosing inside information about what the company's doing.
There is a good case that some of these things are what makes the company so successful.
When a new headliner Apple product hits the shelves, the company does not - like some I could mention - have to pay people to stand in line waiting to get access to the new gadget. The products generate the 'buzz'. The buzz is infectious and it drives sales.
But a key part of being able to achieve this is also the element of surprise. If competitors knew which suppliers were working on Apple products, intelligence about what the new products were and could do would be on the agenda big time.
A few months back I decided to summarise Coethica’s experiences of supporting smaller business using CSR to help their bottom line.
The idea at the start was to demonstrate how you can quickly and inexpensively add value to your business by using concepts found within the CSR agenda.
The suggestions have been practical, easy to understand and requiring minimum financial and time investment. I’d like to bring it all together to begin to look at a more strategic approach and widen your business radar. This is where the real value of being an ethical and responsible business lies.
Initiatives are great but by understanding the bigger picture a little more you can start to embed a more efficient and profitable ethos across your company, your supply chain and to your customers.
The Big 8 are meeting next month in Italy to discuss global financial regulations. Is it just me or is it ironic that Italian Prime Minister Silvio Berlusconi is hosting an economic regulatory summit based on free market principles? Italy may be a “democracy,” yet the PM holds a monopoly over Italian media (print, radio and TV), and has often been accused of unduly influencing elections (his own) and manipulating regulatory structures to suits his private business needs…
Oh well, America has had its share of monopolies, tainted elections and lax regulatory oversight in its recent past. Judge Not, Lest Ye Be Judged…
Meanwhile, back at the Ranch (Washington, D.C.), financial institution regulatory changes take center stage. The Battle between Oversight Agencies begins.
A few weeks ago we wrote about the growing phenomenon of ethics pledges at business schools, and its likely impact on avoiding the kinds of ethical problems involved in the current financial crisis. Several people have now been pointing us to a recent article in the New York Times on an Ethics Oath instigated at Harvard Business School. As a voluntary, student-led initiative, this is pretty much in line with the vogue for pledges in the US that we discussed in the earlier posting. That it has happened at Harvard, however, appears to be news to the NYT, presumably because this is about as deep into the mainstream MBA establishment as you can get. The logic here being: if it's good enough for Harvard, it'll probably be good enough for any self-respecting business school.
A couple of years ago in anticipation of a Democratic White House and a new approach toward trade policy, I advocated a revised definition of "fair trade:"
Adam Smith showed that economic freedom allows people to maximize their potential to the benefit of all society. But total freedom, as Thomas Hobbes argued, leads to a short and nasty life. The Aristotelian notion of moderation might help reconcile this paradox: Trade should be neither too free nor too regulated.
Moderation, the "golden mean," and the middle path have recently come to characterize the current administrations of the two largest economies (using PPP) and largest emitters of CO2--the so called G2, China and the United States. Based on our conversations in China during our last two trips in the past year, two themes keep coming up: One is that although China's fate is tied to that of the United States, many Chinese feel fairly confident that their economy will pull through the financial crisis with no major political instability. In fact, some Chinese have sounded downright triumphant about their country's more influential status and its potential economic robustness.
Some days, it seems as if every other blog, news brief, RSS feed, and newsletter hails social media as the great communications opportunity of the 21st Century for news and information related to corporate social responsibility.
As someone immersed in this new and rapidly growing field, I can report that yes, social media does offer amazing possibilities, especially for companies and organizations working with all things CSR. The Twitter-Facebook-LinkedIn tool kit seems a potential game changer for leveraging the transparency, encouraging the dialogue, and soliciting the feedback that CSR stakeholders require.
There are also, as always, a few things you should know. Call them the “3-D Rules” of social media for CSR. Pay attention to them and you’ll get an in-depth picture of the opportunity—and the questions still to be answered.
Definitions. We nod when we hear “social media” as if we all agree on what it is. While there is a general idea that is generally accepted, there is debate on whether all social media is effective for business purposes.