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Corporate Social Responsibility:
Not Always Such A Good Idea?
NGOs often put heavy pressure on companies to engage in Corporate Social Responsibility (CSR) activities. Many companies eager for positive PR, attempting to escape negative PR, or perhaps even possessed with higher motives, frequently take on the challenge. But should they?

CSR may simply be a rationale people use to avoid Personal Social Responsibility (PSR) argues Jagdish Bhagwati, professor of Economics and Law at Columbia University. He notes that CSR may be an exercise in "evading personal responsibility for doing good" and is "the flip side of blaming corporations for everything from obesity to scalding from spilled coffee...."

On the other hand, there is no question that CSR can be an effective means of defusing or preventing pressure from activist groups. NGOs such as Greenpeace regularly attempt, sometimes with success, to harass companies into taking/stopping particular actions or at least donating funds to a favored cause.

The article states that the "attempt by some NGOs and activists to impose a straitjacket on CSR, reflecting their priorities, is misguided and must be rejected." True. It would be socially irresponsible of companies to base their decisions on the demands of whichever NGOs engage in the most effective PR stunts.

Professor Bhagwati concludes that CSR decisions "should be left to each corporation to determine, just as PSR leaves altruism to each individual's conscience and sense of what needs supporting." He recommends that companies consider Kofi Annan's Global Compact initiative which includes ten guiding principles that leave signatories free to choose those they wish to actively support.

It's not enough to have responsibility codes only for businesses. There is also the need for a Compact that provides principles defining NGO Social Responsibility (NSR). Many NGOs do act responsibly and contribute to society. NGO responsibility, however, is no more inherent in an organization because it is structured as a non-profit than irresponsibility is inherent in a for-profit organization. The first NSR principle should be to reject publicity tactics which smack of extortion.

  • See "Whose social responsibility?"
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