Many companies striving to be good corporate citizens today face an internal tug of war between giving attention to community initiatives that address social problems and the growing demand to make environmental issues paramount.

At Cummins Inc. they found a solution not by making a choice but by facing a challenge.

On the occasion of the company’s 90^th anniversary in 2009, 62 teams of Cummins employees from 11 different countries accepted a challenge to develop projects to improve the environment in their community. Read the rest of this entry »

Dr. Aneel Karnani’s commentary in the Wall Street Journal,  “The Case Against Corporate Social Responsibility” is a good illustration of the challenge facing the business management strategy field in the 21^st century — namely to comprehend the changing role and impact of business in society and integrate this understanding into contemporary management theory.

Like many critics of CSR, Dr. Karnani’s world view remains firmly rooted in the 20^th century social contract where governments (supposedly) took care of social responsibility and business took care of business.  For Dr. Karnani, corporate social responsibility at its core is nothing more than a misguided distraction for business leaders and managers who should be focused on “profit maximization.”

While he acknowledges that companies sometimes can do well by doing good, his view is more often that they can’t, and furthermore postulates that this “makes it more likely that we’ll ignore the real solutions to these problems.” He argues that if business had a meaningful role to play then societies’ pervasive and persistent problems would have been solved long ago by companies seeking to maximize their profits.” In his view the “real” solution to societal problems is a return to a world of more government regulation and intervention. As he notes, government regulation’s “greatest appeal is that it is binding. Government has the power to enforce regulation. No need to rely on anyone’s best intentions.”   

While one can appreciate Dr Karnani’s desire for a simpler time where governments take care of society and business takes care of business, in reality we live in a much more complex world. Read the rest of this entry »

It may not have the impact of a screaming headline in the New York Post but the cover story proclaiming “The Case Against Corporate Social Responsibility” in a Wall Street Journal special section has sparked the kind of outrage Rupert Murdoch could love.

The CSR world is atwitter (literally and figuratively) about the opinion piece by Dr. Aneel Karnani, an associate professor of strategy at the University of Michigan. The headline alone was enough to prompt sharp responses to Karnani. But he really drew fire with remarks that the notion companies can pursue profits and seek to serve the public interest is an “illusion” that is “potentially dangerous;” and that when profit and public interest align “the idea of corporate social responsibility is irrelevant.”

Karnani sees government regulations as the “ultimate solution” to balancing profits and the public good and argues that CSR can in fact distract from more effective initiatives. “The only sure way to influence corporate decision making,” Karnani wrote, “is to impose an unacceptable cost—regulatory mandates, taxes, punitive fines, public embarrassment—on socially unacceptable behavior.”

To no surprise, shortly after the special section of the WSJ hit the street, virtual steam could be seen rising from the CSR regions of the blogosphere and twitterverse. Some initial responses to Karnani’s comments may even have had Michigan officials expecting an angry mob descending on the Ann Arbor campus with torches and pitchforks.

Fortunately, cooler heads have prevailed among the corporate citizenry. What follows is a sampling of comments, rebuttals and criticisms from bloggers and others offering more thoughtful responses to Dr. Karnani. Read the rest of this entry »

A recent opinion piece in a Wall Street Journal special section by Dr. Aneel Karnani, an associate professor of strategy at the University of Michigan, has created a stir. In the item headlined “The Case Against Corporate Social Responsibility”, Karnani asserts that the notion companies can pursue profits and the public interest concurrently is an “illusion” that is “potentially dangerous.” He goes on to say that “companies that simply do everything they can to boost profits will end up increasing social welfare,” and that when profit and public interest align “the idea of corporate social responsibility is irrelevant.”

While the headline of that article is admittedly unfortunate, Karnani is not advocating for irresponsible behavior by corporations. He advocates for aligning business strategy with the public good when possible. He touts government regulation as the “ultimate solution” to balancing profits and the public interest when profit-seeking methods may be at odds with the public good. “The only sure way to influence corporate decision making,” Karnani wrote, “is to impose an unacceptable cost – regulatory mandates, taxes, punitive fines, public embarrassment – on socially unacceptable behavior.”

We all long for a world where alignment of interests is so great, regulation so effective, and social and environmental ills so minimal that corporate social responsibility is assumed and examination of its role is irrelevant or obsolete. In the meantime, Dr. Karnani himself points out significant deficits in our current legal, regulatory and social paradigm and proposes ONE solution out of many possible by emphasizing regulation. We are working today under assumptions about markets and social norms that evolved in a simpler time and that may not be true in the 21^st century of “too big to fail,” environmental stress, and globally networked corporate operations (read people). With all of the complexity, potentially conflicting values and norms, and resulting ambiguity that exist in our globally networked world, any discussion that seeks to establish productive strategies for sustaining business and society or minimum standards of acceptable behavior is welcomed by leaders and employees of corporations alike.

Companies are full of people who work to deliver long-term value and preserve the natural and social environment that makes value-creation and enjoyment of life possible. At the Boston College Center for Corporate Citizenship at the Carroll School of Management, more than 350 member companies and thousands of individuals participate in programs, access research, and share best practices that they can use to align their CSR and profit strategies. Dialogue about how to achieve the greatest value most effectively is part of the process of determining what actions we can take to serve our mutual interests. No company can solve all the world’s ills, but each can contribute a bit by focusing on where they or their employees can make a difference, whether it is by being a better employer, a more responsible steward of resources, a contributor to healthy and safe consumer habits, or as a supporter of community needs.

Companies can and do make positive contributions whether they are B Corporations or publicly traded giants. Any examination of ideas that creates dialogue that helps us figure out how we make business and society better – together – is good.

The following blog is excerpted from In Good Company: Vault’s CSR Blog.

How do job seekers and business school graduates view the rising awareness around concepts like triple bottom line, corporate responsibility, and ethical management? I conducted a series of interviews with four MBA candidates whose focus in graduate school is on corporate social responsibility (CSR): Ashley Jablow, Geetanjali Singh, Whit Tice and Larry Furman. (See below for more about each of the students.)

Read the rest of this entry »

According to a report from the Foundation Center, corporate foundations reduced their giving by an estimated 3.3 percent in 2009  - a much smaller decline than those reported for independent and community foundations. Grant dollars slipped to $4.4 billion, falling below the record $4.6 billion posted in 2008 but matching the level of corporate foundation giving reported in 2007. Read the rest of this entry »

Going green continues to rise as a goal of companies looking to address environmental issues in a genuine way that improves their reputations with the public and consumers. Recent reports in USA Today provide evidence of an additional benefit of environmental initiatives – they can make the grass look greener to today’s top college graduates who are demonstrating in their college choices that sustainability counts.

USA Today reported that universities and colleges are putting on the green to attract students who are serious about environmental issues. Mark Orlowski, founder and executive director of the Massachusetts-based Sustainable Endowments Institute, told the newspaper that the trend is growing at schools large and small “as a way of attracting the best students possible.” According to the Institute’s 2010 College Sustainability Report Card, 69 percent of colleges and universities were incorporating a sustainability message during the admissions and student orientation processes.

A separate USA Today story notes that two-thirds of students surveyed for the Princeton Review’s recent College Hopes and Worries report said a college’s “environmental commitment” would be a factor in where they applied.

Fast forward four years and an effective message about environmental commitment could work for companies looking to attract top young graduates as employees.

The value of corporate citizenship efforts in finding and keeping top-notch employees is becoming clear to a growing number of companies. The Boston College Center’s upcoming Profile of the Practice report will include survey results showing that 59.1 percent of respondents cite employee retention and recruitment as one of their companies’ top three explicit business-related goals of their corporate citizenship strategy.

And it would seem the majority of companies can just stay the course with their corporate citizenship approach in order to capitalize on the drawing power of green. The 2010 Profile of the Practice echoes other surveys in identifying environmental sustainability as a top focus of companies’ corporate citizenship agendas. Based on responses to the Profile of the Practice survey, environmental impact/sustainability is covered in the strategies of 73.5 percent of companies that have a strategy. In addition, protecting the environment is rated as one of the top three social/environmental goals of corporate citizenship strategies.

Beyond providing an obvious benefit to Mother Earth, companies that operate with the environment in mind may be able to reap business benefits when it comes time to harvest the next crop of corporate leaders.

Look for release of the full 2010 Profile of the Practice report this fall.