June 05, 2020

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From Social Obligation to Social Identity

Doing good because you want to is more effective than doing it because you "have" to.


By Ron Schultz

Part of the Creating Good Work series

The Elephant in the Room

We are of benefit to others for many reasons. Some of them are self-serving; others are truly altruistic. When it comes to something as potentially powerful and far reaching as Corporate Social Responsibility, self-serving interests are often the elephant in the room. That does not make them bad, but it does speak to the basic principles under which we do business.

By law, corporations have a fiduciary responsibility to do nothing more than produce profits for their stockholders. So where does CSR fit in that scenario? Do we justify it as something akin to a marketing/branding expense? The question that seems to hover somewhere over CSR efforts elephant-in-the-roomis often: does doing something that benefits others, for perhaps the wrong reason, still make it the right thing to do?

The cynic might accuse corporations that fall into this category of attempting to whitewash their image or in some environmental cases, today, greenwash. The intention may be good – we want to be more environmentally conscious – but somehow the effort isn’t quite up to the intention. The Internet has made exposing these efforts far more obvious. But more on that in a short while.

Doing Good, But Why?

The question is then one of how corporations choose to act in the C-suites and how that shows up in public. Are they performing well because it’s who they truly are, or because of the need to appear well on a scorecard, out of a sense of obligation?

With the advent of such standards compliance lists as the Global Reporting Initiative (GRI), The ISO 26000 and the International Integrated Reporting Council (IIRC), a whole industry has sprung up around making sure corporations are not only in compliance with CSR ideals, but are meeting their obligations.

With the transparency of today’s media, more and more businesses are finding themselves obliged to comply in order to demonstrate they aren’t trying to sucker their consumers into thinking they’re a good citizen, but they have the actual numbers to show they are.

Does Motivation Drive Performance?

So is being obligated to be a good and responsible corporate citizen just as good for a company’s brand as actually being that way because it’s how the company wants to do business? Is being good to you because I was told I have to be good to you different from my being good to you because that’s just who I am? Is it fair to grade corporations against that same standard?

The distinction here is one my colleagues and I have been discussing for years: is the best way to describe a corporation’s community involvement corporate social responsibility or corporate social performance? Or stated differently, obligation versus a healthy corporate identity.

Rebranding Isn't Enough

In some instances, corporations are pushed to make a shift toward a new and positive identity because they have been shamed for professing great community efforts only to be found to be using workforce practices bordering on slavery. Because of situations like these, some enterprises have realized that their survival depends on an ability to demonstrate a new identify and make sure that the consuming public knows and experiences Walmart-proteststhat change.

Of course, rebranding is not cheap. Billions are spent annually on image and brand. But in this consumer-savvy age, image is not really enough. If an enterprise is greenwashing, it won’t take long for the word to get out via social media that what is being said is not really the case.

Getting caught in such duplicity is not something that is quickly forgotten. It seems that no matter how “green” Walmart gets, their treatment of their employees, whether real or perceptual, always rises up and costs them millions in advertising campaigns to tell the world how good they really are and how happy their employees are.

But perhaps we shouldn’t be too harsh on unfulfilled intentions. Because of the ever-present media eye, a company might actually learn, something like a child, that certain behaviors are better than others. And acting in an authentic and positive fashion is far more beneficial to everyone involved.

Changing the Rules Changes Behavior

So how does an enterprise move itself from being driven by obligation to one whose identity is truly an authentic, living and breathing, attitude of doing well by doing good?

Two critical aspects that we presented in Creating Good Work – The World’s Leading Social Entrepreneurs Show How to Build a Healthy Economy were how change happens and why it sometimes doesn’t.

In past blogs we discussed the idea of principles, models, rules and behaviors. Simply, if we change our model to better meet the ideal of our principle, we have to simultaneously change the rules that govern that model, as well as change the behaviors driven by it. Change any one element and you have to change them all. Leave any one out and change fails.

From Obligation to Performance

Moving an environment of CSR compliance and obligation to one of corporate social performance is more than just adhering to a set of rules and regulations being enforced to change behavior. It may ultimately require a shift in the business principles that guides the endeavor.

If a company found that what was keeping them from operating as they wanted were the principles on which the company was founded, it would then require a total alteration of the models that were designed to emulate those principles as well as a complete modification of the behaviors and rules that made those now flawed models work.

Redefining Corporate Identity

Making a principled change on an individual and personal level takes a tremendous act of courage. But redefining an existing corporate identity ismoney-scale far more complex.

To move an organization from corporate social obligation to a corporate social identity, in which there is no need to comply because it’s who they are, has very real and tangible benefits. Studies by MIT, McKinsey, Harvard, The HIP Investor and dozens more have all shown: corporations that operate with great regard and generosity toward the communities within which they do business out-perform the market year in and year out by 4-5%.

So, responsibility or performance? The question ultimately falls to the consumer. Do they care if a corporation is merely following rules and regulations to fulfill their social obligation? Or do consumers want their corporate social partners to be exemplary citizens and demonstrate what could be truly great about our corporate social interactions?

The fact remains that being of benefit to others is the right corporate social action to take, and judging from the return, well worth the effort, even when the ultimate goal is shareholder profit.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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