The Debate over Corporate Social Responsibility

SANDRA WADDOCK

Understanding corporate citizenship is a difficult proposition at best, made more so because understanding and performance can differ depending on circumstances and context. In many parts of the world, normal business operations, strategies, and conduct are increasingly being challenged by protests against globalization and global companies. Companies' performance on human rights, labor standards and working conditions, corruption, exploitation of natural resources, marketing practices, and local community impacts, among others, increasingly calls into question corporate integrity and stakeholder and ecological responsibility. In many ways, it is the successful companies whose practices most frequently fall under the critical scrutiny of outside watchdogs, nongovernmental organizations, and activists, while less successful or less visible (particularly nonbranded) companies seem to proceed largely under the radar screen.

In this context, simple efforts to deflect criticism by, for example, donating to charities or engaging in volunteerism (the typical U.S. corporation's historical response to the need to establish its corporate citizenship) fail to establish companies as good social actors or provide credibility to their efforts to establish themselves as corporate citizens. In part, the questions arise because of the very strategies and operating practices that have resulted in financial, economic, and market success. Something more than charitable contributions and imagebuilding initiatives is needed when a company's corporate citizenship depends not just on external perceptions of its explicit social contributions but on its business model and practices.

No one could doubt the strategic and financial success of such companies as Wal-Mart, Starbucks, Microsoft, Home Depot, and CVS. Each of these and numerous other large, high-growth, high-flying companies has succeeded with strategies that have allowed them to achieve enormous scale economies and significant clout with respect to their suppliers and employees, domination over competitors, and customer loyalty. Yet there is a dark side to their successes, a dark side that results from the very seeds of that success. That dark side involves the impacts that extremely successful companies such as these have on the societies and communities in which they are embedded and the amount of power that they wield over their stakeholders in the very process of achieving success.

In a slightly bigger context, something is dreadfully wrong with the system when successful corporate strategies result in social ills just by virtue of their success. The better some companies perform, the more discouraged and concerned some people are about the quality of life, the sustainability of the planet, and the set of values that are driving societies. Yet this seems to be the reality of the economic model and corporate incentives that dominate

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