Are you familiar with “Corporate Social Responsibility (CSR)”? What is your view of it? There are many terms and viewpoints that have sprung up around the concept, the more ubiquitous ones being “Creating Shared Value (CSV)”, “Triple Bottom Line (TBL)”, “Corporate Moral Responsibility (CMR)” and quite recently “Corporate Responsibility (CR)”.
All the concepts seem to imply that corporations have to return something to society, since they have profited so much from it. This is crazy! In the first place, we do not deserve to be paid, i.e., given value, if we have not provided goods or services of great value to others. The more fundamental the nature of the goods and services provided, the greater the stability and the greater the GENUINE value. There is also a PERCEIVED value. Many categories of costly branded goods are snapped up, not because of GENUINE value, but PERCEIVED value. Here, I am talking about GENUINE value much more.
A business enterprise delivers value to customers and gains profit as a result. The value may be already known or it may be created by being introduced to the customer, who then realizes that the new series of goods or services is highly beneficial to him. For example, child care services are already known and well-established. If someone should devise a way whereby the child is not only cared for in a safe, nurturing environment that promotes a lifestyle of entrepreneurship from that early age, but is able to help the parents harmonize their schedules so as to maximize their engagements with their child, thus building strong bonds that would otherwise be superficial, parents might see that as a highly coveted additional benefit and thus engage the provider for those additional services, and be willing to pay a premium for them. Both seller and buyer stand to derive greater value from this additional service. This is where genuine value is engendered.
Those of you old enough to remember the movie “Wall Street” would remember that this was one of Gordon Gekko’s sayings. As we know, movies are very often representative of what actually goes on in real life. And so exploitation of natural resources, minority groups, “less-developed” peoples and other categories goes on. Very often, those in authority over nations devise legislation that keep their populations under their control, ensuring that labour remains “cheap”, thereby enriching themselves by allowing other nations to play the raptor over the rich prey of their own nations’ resources, including their own people. Of course, those same authorities get their share of the spoils too! Well, it seems now that there is a race to see which nations can get to the top of the “expensive labour” category more quickly. “Cheap” labour is starting to become scarce. And so exploitation of “others” continues in other guises. As long as greed remains a valued vice, we will continue to exploit each other rather than provide increasing value to each other. As we do as individuals, so we will do as corporations. I say we will even continue to do so if greed is allowed into “social enterprises”, which are supposed to buck the exploitation trend.
So, whither CSR? Whither regulation? We all know that you cannot legislate a value-givers mindset into existence. What is needed are circumspect buyers who have determined not to be clothes horses or walking fashion advertisements. When the critical mass of such buyers is attained, perhaps only genuine value-delivering business enterprises will even get a chance at incorporation.