Monday, October 6, 2008

Another Look at "Social Responsibility"

Even before our discussion in class last week, I have been particularly interested in corporate social responsibility. Val brought it to my attention after class, that after one of my usual rants (the one that included Ben and Jerry’s… yes, I realize that there were many and I appreciate your patience with me) that I indicated that I was so moved by their talk at Vanderbilt last year that left the Student Center having a complete understanding “of what I want to do with my life”. It wasn’t until Val brought it up that I recognized that I never clarified what that was- and maybe it was in the interest of time, or out of a desire to not loose my train of thought. Either way, I think it is that interest that also propels this Blog entry, and so I apologize in advance if it sounds rather dramatic. And so to answer your question Val, I do not want to be a professional ice cream scooper or even better, taster, (although I agree with you that that would be fun!) but rather I am intrigued by Ben and Jerry’s attempts at incorporating “social responsibility” into their primary vision and I would love to pursue consulting with the intention of directing organizations about how to integrate (into their existing processes) “socially responsible” elements. That being said, I am sorry for the life story, here is where I think this fits in to our class work:

Although I recognize that Milton Friedman does have some valid points about the problem with compromising profits in the name of an “artificial responsibility” [considering that “only people can have responsibilities”] I believe that the two are not mutually exclusive. Aside from the Ben and Jerry’s example, couldn’t we imagine a situation in which it would be in the organization’s best interest (i.e. increased profits) to act socially responsible? Independent from the (still) mysterious Body Shop woman’s promise to donating 5% of her profits to charity, what if we followed Don Quijote’s example of an imaginative leader (aha! a good example of where this principle could be beneficial if controlled!) and found a way for ‘social responsibility’ to benefit both parties without risking profit.

To kick start this idea, lets imagine a small business, “X”, is interested in introducing a new candy bar. Their target consumer is between ages 15-18. Business “X”, before releasing their candy bar, wants to ensure that their target demographic understands what the candy bar is and why it is better than other candy bars on the market + wants to get them to by this candy bar = recognizes the necessity to conduct market research. In the past, organizations might employ an external marketing organization to conduct a research study, compile a focus group, compare their competitor’s strategies etc. Although these have been successful for many businesses, one limitation has been revealing avenues to directly communicate to the consumer. So here is where this idea of “social responsibility” could be integrated into business “X’s existing processes…who better to understand what the audience wants and needs than someone in that audience? Why couldn’t business “X” depend on a high school aged “Ivan intern” (at no cost to them) to disseminate information about the candy bar, educate business “X’s” marketing team about their audience, relate to the customer, and more adequately explain the value proposition of the product? Wouldn’t this give business “X” the marketing scope and audience understanding they need to be successful while also expanding their opportunities to directly reach their target audience? Doesn’t this also allow “Ivan intern” to put a highly valued career experience on his resume? And isn’t this benefit heightened if Ivan aspired to go to college but is from an under resourced school where extracurricular opportunities are limited? I recognize that there are limitations to this example, i.e. Ivan’s ability to perform these tasks effectively and the time taken to train him but couldn’t we really get somewhere with this?

Another example. What is stopping Fido’s (coffee shop on 21st; I highly recommend it) from hosting an event organized by Children’s Hospital volunteers to make slippers for patients? The Children’s Hospital uses Fido’s space (brings all of the necessary supplies) and benefits from Fido’s existing popularity and name recognition. Meanwhile Fido’s increases their profit (immediately because of the increased traffic flow through their store on the day of the event and after in establishing a new clientele base/support).

Another example. The Vanderbilt women’s lacrosse team decides to “adopt” an 11 year old girl with brain cancer. This adoption includes having Makenzie appear at games and sit on the sideline with the team, giving extra Vanderbilt gear to her and her younger brother, inviting her family to the end of the year celebration banquet etc. Makenzie benefits from the love and support the team offers her and her family (without doing anything extra but including her in what is already expected of the team) and the team finds some extra energy and motivation to appreciate the game, their teammates, and the health of their bodies… and, if they are lucky, like Northwestern (who has won four national championships since the year they “adopted” Jacklyn) they might find their love and care for another translates into success.

Regardless of the type of business or team, organizations have a collective power, (money, resources, support) to do what people cannot on their own. If, in agreement with the contingency theory, an organization is equally affected by the external environment as the situations, transactions, processes etc. that occur within, I argue that it is exceedingly important to cultivate abundant and healthy and relationships with external parties (i.e. the community). Rather than expect public service or “social responsibility” to consume profit, let’s explore ways that we can accomplish both: allow “corporate social responsibility” to penetrate existing processes and consequently if not increase profit, at least maintain what would be gained without integrating socially responsible ideals.

As long as we can find ways for organizations to minimize the “transaction cost” of integrating such “socially responsible” events into corporate processes I am confident that we could cultivate a new corporate culture- one that enhances the communities of which these businesses are a part without compromising profits. And who better to start these movements than the leaders of these organizations? I am not suggesting that this “vision” for transforming corporate America need be created and maintained solely by the leaders: that it is limited by “providing a vision and influencing others to realize it through non-coercive means” (Heifitz, 1994). Rather if our current short-comings in not taking advantage of businesses’ collective power is a problem (and I argue that it is), the solution should not come from leaders who exclusively influence “the community to follow their vision” but from those that “influence the community to face its problems” (Heifitz, 1994). This style of leadership would look more like Sashkin’s model (oh the “e”s = express, explain, extend, expand) with a modified “first step” (Sashkin, 1989). Without going into all of them, I suggest a “modified step” that (rather than encouraging others to be committed to “the leader’s vision”) requires a leader to “focus others’ attention on key issues [the lack of corporate social responsibility]- helping people grasp, understand and become committed” to the cause: thus depending on “effective followers” to collaboratively create a vision (Sashkin, 1989; Kelly, 1998). With this adjustment, I think Sashkin’s outline of effective leadership would be very valuable in this situation especially in that it allows followers to be “empowered” to affect real change. Change that does not separate from the bottom line, but embraces a socially responsible means to enhance it.

“Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.”
Margaret Mead


  1. Jessica,

    Couldn't agree more. I believe that the most ignored yet ostensible fact concerning business, is that it is comprised of people!! PEOPLE, NOT PROFITS, ARE THE ESSENCE OF BUSINESS. This is not to say that profits don't matter, but without people businesses cannot exist, whereas thousands of businesses attest to the fact that albeit unsuccessfully, enterprise can and does take place without profit margins.

    Once we recognize that businesses are comprised of people, then we can begin to question the primary purpose of business. Is the primary purpose of business to create and capture rents, consequently garnering profits for shareholders, or is the primary purpose of business to make goods and services that benefit society? Are those ends mutually exclusive? Which should take precedent?

    I believe that your blog makes an excellent argument for the notion that benefitting society and gleaning enough profit to compete and endure are not mutually exclusive goals, but the complexity and creativity begins and ends with one word, PEOPLE!! Until we embrace as McGregor coined, "The human side of enterprise" we are victims of our own systems, constructions, and notions and are ultimately unable to innovate toward any good whatsoever.

  2. "Never doubt that a small group of thoughtful, committed people can change the world." I feel strongly about this quote. The Big Test-The Secret History of the American Meritocracy , a book i'm currently reading for another class,happens to serve as a telling showcase of this notion.The book begins with a rather anecdotal account about the family history of Henry Chauncey,the founder of ETS, then goes on to talk about how the wide application of standardized testing, such as SAT,has changed American social structure.This influential testing program did not come into being as a result of the collective choice of the general public,but was the child of a motivated few,together with a right conbination of time and chance.I recommend this book to you.It's as fun as thought-provoking.


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