Corporate social responsibility in a global context - a new free download

The new edition of our textbook on CSR, Corporate Social Responsibility: Readings and Cases in a Global Context, written with our colleague Laura Spence, hit the shelves a few weeks ago - just in time for the new academic year. And we're pleased to see that it's flying off those shelves pretty fast too. In its first month alone, the book sold almost a 1000 copies, which is pretty good going - and a big uptick on like-for-like sales from last time around.

The second edition is quite a change from the first. It's still based around readings of classic and recent articles on CSR, but we've updated more than half of these, written three brand new cases, and overall it has a much more textbook-like feel to it. Along with Routledge, the publishers. we've worked hard at refreshing the design and contents to make the text much more user friendly, more lively and engaging, and with a great new companion website to help students and instructors make the most of the book. This includes a whole bunch of annotated links to CSR in practice which help readers see where theory in the book turns into practice as well as links to career resources for budding CSR professionals. Of course, there are also all the usual instructor resources like powerpoint slides and teaching notes, as well as a cool new "Case Club" which has suggested cases for each of the chapters in the book. It really is as close to the complete package for a CSR course kit as we could get it.

To mark the launch of the book, we are making available, completely free, a download of the first chapter, "Corporate social responsibility: in a global context", over at the Social Science Research Network. This is the exact same version as you'll find in the book, downloadable as a pdf. You don't need to sign in, register, or anything. Just go to the right page and click "Download This Paper". It's that simple.

The chapter is a good basic CSR 101 for anyone trying to get their head's around the subject. Among other things, it includes discussion on the nature and definition of CSR, and its emergence in different national contexts (including developing and transitional economies) and even different organizational contexts (such as small and large firms, and public, private and nonprofit organizations). As with the previous edition, although we discuss a whole bunch of different definitions of CSR, we don't introduce a new one. Instead we try and capture what is common across CSR definitions in order to determine the main unique features of the phenomenon. We call these the six core characteristics of CSR, which are shown in the Figure below.

Six core characteristics of CSR

Reproduced from Crane, A., Matten, D., and Spence, L.J. (2013), "Corporate social responsibility: in a global context." In Crane, A., Matten, D. and Spence, L.J. (eds), Corporate social responsibility: readings and cases in a global context, Abingdon: Routledge (p. 9).

As we are often heard remarking, CSR is a field of "conceptual anarchy". Hopefully by reading the introduction, and who knows, maybe reading more of the book in class, at the library, or just for your own enjoyment and education, we can hopefully help you navigate through some of the confusion to reach a clearer, if no less complex, understanding of a sometimes elusive idea.

See also: Our top 10 tips for teaching CSR

Danger due to: ethics

John Dalla Costa, the renowned business ethics writer and consultant teaches with us at the Schulich School of Business. He's also an occasional blogger at his site www.ceo-ethics.com. We love the piece he's just posted on the dangers of thinking that because you're doing ethics, you're going to be more ethical. With his permission, we're reposting it here since its a conversation we agree that needs to happen.

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Are ethicists more ethical than their peers in other disciplines? It’s an interesting question. A recent study published in the journal Metaphilosophy provides a limited data point, but the news, at least if you’re an ethicist like me, is not good. Comparing how university professors engage students, the researchers found no difference between ethics professors and other faculty. Even though the ethics experts set an ideal, and acknowledged that not following through on that standard was morally wrong, in action, the experts in ethics were indistinguishable from fellow academics.

Are you surprised? I’m not. But I am distressed.

I’m not surprised, because if ethics were truly relevant, or if we really understood them to be effective, we’d be invoking them with much more frequency and rigor. Canada is knee-deep is scandals, with Senators whitewashing expense reports, the Prime Minister’s Chief of Staff paying for the white paint, and the Mayor of Toronto careening from one violation of the public trust to another. Ethics are AWOL, and no one seems to be missing them.

The same is true in business. Ethics have become IKEA-like contraptions for compliance. All the imagination and enquiry have been purposefully engineered away, so that all ethics and compliance officers need to do is follow the illustrated instructions, and assemble the pre-cut pieces.

Before Lehman Brothers and Bear Stearns imploded in 2008, I managed to download the codes for ethics and conduct from their respective websites. It turns out that they were derived from a boilerplate, following numerically identical categories, and using mostly similar jargon, with only one or two cosmetic flourishes reflecting idiosyncrasies of corporate history. It would inconceivable for these global finance behemoths (or their peers) to use Quicken to do their taxes. But that’s basically what they did for their ethics – adopting a four-page template, in the name of the Board of Directors, to set the terms and scope for their ethicality. Not surprisingly, both companies got full return on their investment.

There is a good reason why we’ve talked so little about corporate ethics since the financial crisis: most corporations had already subscribed to compliance projects pre-2007, and nothing has changed since.

I’m distressed because ethics-without-ethicality repeats the diminishment of restraint and responsibility, which led to previous market failures and economic crises.

As bad as were the deceptions perpetrated by Enron, it was much worse that these accounting lies were intentionally papered-over by its auditor, Arthur Anderson. Similarly, as irresponsible as were mortgage tactics and securitizations floated by the banks in the run up to the financial crisis, it was much worse that the ratings agencies, like Standard and Poor’s, assigned Triple AAA credit value to derivates that their own in-house experts considered junk-grade. When sentinels sell-out, when they simultaneously over-estimate their virtue and under-deliver on the promise they are entrusted to uphold, bad things happen to everyone.

In his book, Confronting Vulnerability, Jonathan Schofer reminds us that moral laws and ethical rules need continuous replenishment. His point is that, while established as bulwarks against human vulnerability and exploitation, ethics are themselves vulnerable and exploitable. We fall-back on ethics as if on auto-pilot, with such doctrinaire rigidity that we cease using any critical thinking as we apply them in life’s complex ambiguities. Or, perhaps worse, we take them for granted until they become easy take-over targets for other ambitions or motivations. Principles share with practitioners the fragility of our human finitude. The most unethical thing is often denying our personal limitations for seeing what is right, and deciding what is true.

We don’t know if this research confirms that ethicists too have ceased being reliable sentinels. But it is the question that should distress and challenge us – ethicists and non-ethicists alike.

John Dalla Costa

www.ceo-ethics.com

Photo by blind dayze. Reproduced under Creative Commons licence

Fun facts about corporate accounting scandals

Regular readers will know that we have a soft spot for corporate responsibility infographics. The one below, which recently crossed our desk courtesy of Accounting-degree.org, provides a nice overview of some of the big corporate accounting scandals of the last 15 years or so. The title may be misleading - it hardly seeks to capture the biggest scandals of "all time" - but it does give a good summary of those that have happened in recent memory. And the sources of the details they provide are cited - most of which (but not all) are pretty reliable. So if you want a five minute summary of all that's wrong in the world of accounting fraud, and you don't mind a strong US bias, this is a good place to start.

One thing we particularly like are the "fun facts" accompanying each scandal. OK, so most of these are not really much fun at all - is anyone laughing about the introduction of Sarbanes-Oxley after the Worldcom and Enron scandals? - but they do point to some of the absurdities of the system in which the accounting scandals have taken place. Enron being voted most innovative company six times in a row by Fortune magazine, Lehman brothers being honored with "Most Admired Securities Firm" a year before its collapse, AIG execs getting $165m in bonuses just after posting the largest quarterly loss in American corporate history and getting a government bailout? It doesn't say much about how well we scrutinize or reward supposedly "successful" companies, does it?

It's also interesting that the infographic has been created by an organization promoting online accounting degrees (we might add that their other Featured Article is titled "10 Accounting Tricks the 1% Use to Dodge the Taxman", which is also worth a look). Are they saying that an accounting degree will help avoid some of these problems in the future? That what we need are better accounting degrees? That an on-line offering is in any way more or less likely to lead people to engage in shady accounting practices? Clearly there is an important role for accounting education in here somewhere, but we're not too sure about the offerings being recommended by Accounting-degree.org, or even who the organization is or what its methodology is. In the spirit of good accounting, a little more transparency would be a good thing. But don't let that stand in the way of enjoying a nice infographic.

Source: Accounting-Degree.org

Photo by AJC1. Reproduced under Creative Commons Licence

Has 9/11 changed business ethics?

I can’t believe I just wrote this headline. Looking at today’s punch lines in North American papers or on TV, you can get the impression that 9/11 was the all defining event of the new millennium. And that pretty much nothing in the world has remained the same ever since.

There is a lot of hyperbole out there these days. As shocking as 9/11 appeared at the time the last decade has seen – in terms of loss of life or any other criteria we want to apply – much worse tragedies, injustices and atrocities. This includes a number of ways in which America and its allies have responded to 9/11 (8,500 American soldiers and contractors killed, 103.000 Iraqi civilians killed, according to today’s New York Times).

World politics aside – and there are more gifted minds and eloquent writers out there to address those issues – it’s still worth just engaging in this little thought experiment. So let’s play around with this thought for a second: if 9/11 is the day ‘that changed everything’ – what has its effect been on the niche of the world we are commenting on in this blog? Here are some thoughts off the cuff.

Blurring lines between the public and the private. 9/11 has given many governments new legitimacy in redefing the public and the private in their relation to their citizens. Email, phone conversations, financial records, tax statements are just prominent examples where governments have attempted to intrude the privacy of citizens – all of course in the name of fighting ‘the war on terror’. Conspicuously, many of this information is administered by private companies. Unsurprisingly, we then see that electronic privacy, identity protection and a host of other privacy issues have turned in ethical dilemmas for private business. Arguably, many of the ethical issues here would be on the agenda without 9/11 though, as the main driver of ethical contestation is the mere fact that advances in information technology have made those new ways of information gathering possible in the first place.

New business opportunities. Looking at how America and its allies have approached the wars in Iraq and Afghanistan it is evident that we have seen a surge in business opportunities for private military contractors, mercenary companies and security providers. As the Wall Street Journal investigation ‘Top Secret America’ has highlighted this also pertains to intelligence gathering, counterterrorism or homeland security. This all has propelled private business in a sphere traditionally occupied by governments and other – at least on paper – publicly and democratically accountable societal actors. Again, we can legitimately ask in how far this is really triggered by 9/11. As Naomi Klein has pointed out (‘The Shock Doctrine, Chapter 14), it was exactly on September 10, 2001, when Donald Rumsfeld held a Town Hall Meeting in the Pentagon announcing far flung privatization of military operations leading CNN to the headline on the very eve of 9/11: ‘Defence Secretary Declares War on the Pentagon’s Bureaucracy’! In this sense then 9/11 might have accelerated these developments and provided some much needed legitimacy – but the underlying ideas and intentions were hardly new.

Soaring government deficits. The current debate on government deficits in the US, UK and elsewhere is often directly linked to the so-called financial crisis of 2008/9. This however overlooks the fact that due to the ‘response’ to 9/11 certainly the US and the UK, had already heavily overstretched their budgets. The New York Times today cites a figure of $1.6trillion in costs for just the wars post-9/11. In some ways one could even argue that due to the constant distraction of two wars the looming financial disaster could grow largely unnoticed by governmental scrutiny. And the need to finance those wars made it all too tempting to keep interest rates low - with the widely known effects on cheap credit in America. As a result we now see more or less in all Western democracies an increase slashing of classic welfare state provision. As many commentators have pointed out retreating governmental provision of health, education or other public services has been a key driver in a shifting expectation towards business in engaging in these arenas – the UK probably being the best laboratory to substantiate that thesis.

New issues in diversity and discrimination. Certainly in the US, 9/11 has heightened scepticism towards all things Muslim. This is certainly reflected in tightened immigration laws and the general perception of the public. Conspicuously, there is relatively little case evidence that this has also played out in business. While gender or sexual orientation have been well documented there is only scant evidence of actual discrimination on the basis of being of Muslim faith. This may, however, be more credited to the fairly palpable ‘Teflon’ of political correctness with which those topics have been touched since then in business.

A multipolar world and the rise of China and India. One of the most interesting developments in the US has been its heightened restrictions on immigration of highly educated young people including those graduating from American universities. This has had a number of implications for business both in the US and the rest of the world. Most obvious are changes in those industries where America is still quite advanced, most notably IT, electronics and software. All these industries have in the past and still at present do rely heavily on an influx of foreign-born professionals. While it has become more difficult to hire this talent at home, places such as India have immensely benefited from this. Much of the software development and business process outsourcing of leading US companies is now done in Bangalore, Hyderabad or Mumbai. In this sense, with the US becoming less open to a free movement of people we see that this has benefited other parts of the global economy. This has also been visible in University education. Countries such as the UK, Canada or Australia have seen a surge in international students who found their ambition to study in the US rendered impossible after 9/11.

For business ethics this move towards a world where the US in many fields has lost a pole position is quite interesting. With growing business interests in emerging economies we see, at the same time, an interest in business responsibilities and ethics growing in these parts of the globe. We can certainly argue that the last decade has seen much stronger influence and relevance of other areas of the globe. Business ethics, 30 years ago, was by and large an American subject. This is no longer the case today.

Arguably, much of the changes we discuss here have a fairly tenuous link to 9/11 as such. The events had their most severe impacts on ethics in government, warfare, international relations and how governments have (dis-)respected basic human rights since then. Some of it, as we think, has had a trickle-down effect on business. But maybe the gist of it is still best summarized by commodity trader Carlton Brown in the movie The Corporation: ‘In devastation, there is opportunity!’

Photo by JessyeAnne, reproduced under the Creative Commons licence.

Controversies in university funding: LSE and the Libyan connection

The London School of Economics has been embroiled in a major controversy regarding its relationship with the under-siege Libyan regime, and most particularly Saif Al-Islam Gaddafi, the son of the Libyan leader. Last week saw the shock resignation of the LSE's Director, Sir Howard Davies, as a direct result of the crisis - a major scalp for those arguing that the university had put commercial interests before its academic integrity. But the case is far from clear cut.

So what has got the internationally acclaimed university into such hot water? The critical issue here is the receipt of money from sources attached to the Libyan regime, including a donation of £1.5m from a charitable foundation run by Gaddafi's son, and £2.2m paid to the university to train Libyan officials. To complicate matters, Davies also acted as an advisor to the Libyan sovereign wealth fund. Oh, and Saif Al-Islam Gaddafi is an alumnus of LSE, whose PhD, awarded in 2008, is now the subject of a heated plagiarism scandal. As with the recent case of Karl-Theodor zu Guttenberg, the German Defence Secretary that we covered two weeks ago, an on-line campaign to identify and make public alleged plagiarism offences in Gaddafi’s doctoral thesis has gathered considerable momentum, forcing the university to instigate an academic offences investigation. Who knew that PhD plagiarism would be such an on-trend internet phenomenon in the first months of 2011?

Davies' resignation from his role as Director of LSE could not have been envisaged only weeks ago. But with Gaddafi senior and his Libyan regime now widely condemned after the dictator’s brutal response to the public uprising in the country, (and Gaddafi junior very much defending his father’s position) those with links to Gaddafi have also increasingly come under fire. And it’s not only pop stars like Usher, Beyonce, and Nelly Furtado. When a university such as LSE is linked in such a direct way to human rights abuses, it is no surprise that its reputation will come under fire. As Davies remarked about his resignation:

"I advised the [LSE] council that it was reasonable to accept the money and that has turned out to be a mistake," he said. "There were risks involved in taking funding from sources associated with Libya and they should have been weighed more heavily in the balance."

Well yes, that’s probably so. University leaders do have a responsibility for upholding the reputations of their institutions. And despite the recent charm offensive from Libya, it certainly did continue to pose a significant reputational risk. But then with hindsight that is, of course, easy to say. The UK government was certainly strongly encouraging the LSE to engage more with the country and there’s definitely a strong case to be made that bringing the educational heft of the LSE to the Libyan regime might well have made a contribution to enhancing openness and democracy in ways that only a liberal education can. This side of the argument was persuasively presented by our former colleague, Darryn Mitussis, writing in the Letters pages of the The Guardian newspaper:

“Introducing the children of autocracy to the best traditions of critical, reflexive British education and inculcating anointed leaders with the rigours of public accountability and transparency is a wonderful and deeply subversive thing to do (irrespective of the fee accepted). If – and only if – accepting the money required a compromise in the academic integrity of the syllabus then resignation is appropriate. If academic standards were not compromised and it was still wrong to take Libyan money, then it is also wrong to take money from any number of government scholarship schemes funded by undemocratic states (including Saudi Arabia and China) that prepare their chosen future leaders for business, political and scientific leadership.”

There is clearly a broader issue here about the appropriate balance of public, private and international funding for education. But we agree that given the reality of so much external funding, the main issue with funding is whether it impedes academic freedom. When “strings” are attached to funding the ethical problem is one of misusing power to distort knowledge. With “no strings attached” arrangements, this moves to a more vague “complicity” with undesirable people or organizations or being associated with “dirty money”. Not that these are inconsequential considerations. But there is certainly a good case that can be made for using “bad” money for “good” ends – as critics of Microsoft’s monopolizing tactics might recognize in the Bill and Melinda Gates Foundation, for example. In the case of LSE, there is no evidence as yet of any such strings – but maybe Davies' prompt resignation could hint at further skeletons in the closet. Time will tell.

Ultimately though, universities should be (but are not) better prepared for the risks associated with their funding arrangements, especially in the UK where a great deal of controversy is attached to funding sources in higher education (a subject that barely raises a peep in North America). We should know, having both worked in a CSR centre initially funded with tobacco industry money (which understandably caused a storm) and now occupying chairs named in honor of a company featuring no less than two disgraced CEOs (HP), and a business man who among his many accomplishments was responsible for bringing the renowned animal lovers KFC to Canada (George Gardiner) – neither of which has raised a murmur.

When we joined the BAT-funded International Centre for Corporate Social Responsibility at Nottingham University in 2002 we quickly joined Jeremy Moon, the Director, in establishing a governance structure and a funding policy that ensured academic independence and scholarly freedom along with clear lines of decision making and reporting. LSE, by comparison is now nearly 10 years later only just talking about a developing guidelines for donations as part of an independent inquiry into the Libyan affair. Perhaps it would also be wise to belatedly start tackling the issue of plagiarism more concertedly. Davies was unlucky to take the fall for an unexpected series of events in the Middle East. But he only has himself to blame for not instituting the systems and structures necessary to deal with the problems effectively in the first place.


Photo by Leo Reynolds. Reproduced under Creative Commons Licence

Dial M for mission.

We often get asked about how we got into this strange academic world, why we do work in responsible business, and, well, isn't it about time we got ourselves a proper job? Sometimes our answers are glib but with a touch of truth about them ... we like getting up late, we can wear what we want, it's cool to be able to do pretty much exactly what you want, whenever you want. Yes, the freedoms are pretty great, we have to say (though not everyone thinks that our sartorial choices should be quite so free).

But truth be told we also have a bit of a mission ... not a big capital M Mission to change the world, to reveal the truth to the great unwashed, or to convert all those immoral business people into saintly Crane and Matten disciples. OK, so we do like to occasionally come over all guru-like, but usually we can;t keep a straight face long enough. Who would believe that we really have all the answers? We have trouble enough just getting the questions right. But perhaps we do have a smaller, more modest mission of a sort. One that's something like making a difference to how people think about responsible business, whether they are students, researchers, practitioners, or just the random people that bump into our blog through the magic of google. Being a university professor gives you lots of opportunity to do this, and it's probably this more than anything that get's us out of bed in the morning. Either that or the thought of breakfast. Or a girlfriend who really does have a proper job. It's certainly not the money.

Anyway, you're probably wondering, why are Crane and Matten getting all existential on us today? Why the sudden need to talk about the ... ahem .... "mission". Is it the end of year reckoning getting the better of them, the need to put things in place, start listing achievements, and work out where it all went right/wrong (delete as appropriate). Maybe. But it's also because we just seem to be getting asked a lot recently. So to put you in the mood too, check out Andy's recent interview by the Association for the Advancement of Sustainability in Higher Education (AASHE). He talks about what got him started researching in this field, what students are looking for now, what the big trends are, and what gets him excited about his job (besides getting to wear the funny hat at graduation ceremonies, and the big end of year bonuses of course).

AASHE is an association of colleges and universities that are working to create a sustainable future. Their mission "is to empower higher education to lead the sustainability transformation." It sounds a bit more impressive than ours, so we were happy to chat with them about what we were up to in our research and teaching. We're not sure it's going to empower anyone, at least not without providing a whole lot of other tools and resources that organizations like AASHE typically try and deliver. But it might get them thinking. You can't ask for more than that.

Oh OK, you can. Just don't ask us for more than that. At least not before noon.


Photo by Martin Kingsley. Reproduced under Creative Commons license