Corporate social entrepreneurship

Today we have another in our occasional series of guest bloggers. This time up its Christine Hemingway, a visiting fellow at the International Centre for Corporate Social Responsibility, Nottingham University. Here she is talking about what she calls corporate social entrepreneurship. 

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In the wake of the global economic crisis caused by financial irregularities and lapses in corporate governance and personal integrity, part of the fall-out has been a big kick up the backside for business ethics. There is renewed vigour which has boosted momentum behind the growing CSR movement and the need for ethical business, with the clarion call: “How can we prevent this from happening again?” So I was really interested to see the idea of the B companies in the last post: a practical approach to positioning the corporation as social enterprise, which involves stakeholder governance, backed by legal certification.

This looks like a great step forward. But there isn’t a magic solution and so we cannot expect a ‘one size fits all’ systemic answer in our attempts to prevent corporate irresponsibility. I’m sure the folks at B-Lab would be quick to agree that it’s the people as well as the systems that are important. It’s people who take their decisions when going about their daily activities at work - some with potentially harmful consequences. And even with the most efficient, slickest of systems, you cannot legislate for the individual actions and decisions made by all the employees who work across the supply chain. And as Crane and Matten pointed out [re the Toyota case]: whilst failings in corporate governance continue to happen, they’re not perpetrated by a band of Machiavellian Dr Evils out to screw the innocent consumer.

Many of the cases of bad management we keep hearing about are perpetrated by people who feel that they ought not to speak up, because ultimately it’s not their responsibility (surely the boss knows best?). Or, by people who think that a small deception is maybe all part of the ‘game’ of business, which is to maximise profitability. I’m talking about the very many people at work for whom business ethics is simply just not on their radar. Even if they have heard of it, it might be a nice idea “but it’s just not applicable here.” Hence we might say that it’s not highly valued by them, because they don’t see it as necessary. So we continue to see these lapses and it’s a continuing cycle.

Yet, there are other employees who do value CSR. Like the sustainability managers that were interviewed and discussed in the Visser and Crane paper on change agents: “devoting their time and energies to addressing social, environmental and ethical issues.” What’s more, in another recent study that I conducted within the confines of a major FTSE100 listed firm, some employees were found also engaging in these issues – acting as Corporate Social Entrepreneurs - and some of these didn’t even have CSR as part of their formal job role. Eh? Let me explain.

As an ex-corporate manager turned business ethics academic, I felt that there was an imbalance between all the research into the bad decisions and not enough on the socially responsible decisions. I felt that if we could learn more about the personal values underlying CSR, then this would be an excellent starting point from which to build a socially responsible corporate culture. My own experience in business tallied also with some of the academic papers I had read about champions of CSR, and whilst social psychologists have been studying the effects of our personal values on our behaviour for decades, it seemed to me that we needed to know much more about the personal values of corporate employees in order to give us greater insights into CSR.

This was going to be tricky, because the psychologists tell us that we all generally share the same values, such as safety; family and friendships. The difference between us, though, is the different emphasis that we place behind these common values, which results in a more nuanced picture of our different priorities. So, what emerged from this research, were four very general ‘types’ of people.

The ACTIVE Corporate Social Entrepreneurs (CSEs); highly principled moral leaders, who enlarge their own role to encompass a socially responsible agenda at work. They demonstrate both awareness of ethical issues and involvement in them and the courage to speak out at work. They are characterised by ‘collectivistic’ values, e.g., helpfulness; caring for others’ welfare; of equality and treating people fairly. They are also characterised by the independence and risk-taking commonly associated with entrepreneurship.

A second group, the CONCEALED Corporate Social Entrepreneurs – in common with the ACTIVES - express their passionate belief in their personal, moral obligation to society. However, the difference between these two types of CSE is their perception of a supportive corporate culture and the ensuing limits regarding the extent of their SR activity at work. This results in some activities being confined to outside of work and also produces frustrations and some degree of job dissatisfaction.

In contrast,I also found CONFORMIST and DISASSOCIATED corporate employees, who support the prevailing stereotype of ethics not being on the radar. The key distinction with the previous two groups, however, is that these informants place greatest emphasis on their ‘individualistic’ values regarding their own capability and career ambition and the importance of their families and home life. And whilst the DISASSOCIATED dismiss the strategic relevance of CSR to the firm’s success: a number of CONFORMISTS have formal SR job roles and express the benefits of their SR activity as good for their career (because it was encouraged by the company) and also the personal satisfaction associated with SR activity.

All this helps add a psychological perspective to the study of business ethics in practice. For some it may be reminiscent of the eminent psychologist, Abraham Maslow. He is well-known to students of business and management as the guru who invented the ‘Hierarchy of Needs’, but he also wrote about our personal values. This, in a roundabout way brings us back to the ‘B’ companies. In their context, the ‘B’ stands for ‘Benefit’. Yet it echoes Maslow’s ideas regarding what he called people with ‘B-Cognitions’ (the B stood for ‘being’ as opposed to ‘having’), i.e. motivation regarding the welfare of others in order to become, as one book reviewer put it, “the best version of yourself” (see ‘The Farther Reaches of Human Nature’ 1975). So, too, these B companies striving to be the best by ‘doing the right thing’ and achieving true sustainability, in the fully inclusive sense. Consequently, we’re reminded that it’s personal responsibility that has to underpin the governance systems in order to develop CSR.

Photo by punk_drizzle. Reproduced under Creative Commons license