Essay: How does Corporate Social Responsibility differ between institutions?

The discourse and agenda of Corporate Social Responsibility (CSR) are determined by both the nation and enterprise, who often have inconsistent ideas of the mechanisms and motives appropriate for legitimacy. My business classes engage in the topic as a positive commitment of corporations to contribute to sustainable economic development by weighing the costs of business activity to all stakeholders, internal and external. There is an all-encompassing idea that leaders of businesses find it critical to engage not only within their institution, but also with the communities in which they operate, and others affected by what they do. However, as we delve deeper, I am skeptical; this process seems far too oversimplified. While there is a general call for leaders to advocate for social “good”, Who defines this term? The process of outlining what is clearly “good” for a society is fundamentally impossible and subjective. Furthermore, where did this idea of CSR come from, and why do we need it? The suspicion of intentions of large businesses and their leaders is deeply embedded in our historical mindset (Spector 316). Some argue that it is a product of the Cold War, more specifically the consumerism mentality. Others say that Corporate Social Responsibility is an output of globalisation and the abolishment of nation-states. Corporations power widens as the power of the state shrinks. Companies become essential to the survival of government, becoming concerned with the “health of their workers, education of their employees, air quality, and the availability of life-saving drugs” (Schwab 109). Such enterprises involved in CSR must work alongside foreign governments, each varying in guidelines, and civil societies themselves. India, particularly since the beginning of the 21st century, has been creating a framework within which the CSR discourse is cultivating (Sharma 583). The problems that evolve from the social structure of society in the form of “caste, inter religious strife, poverty, unemployment, malnutrition, illiteracy, poor health and gender issues” make finding a role for CSR in India an arduous task (584). The government must also provide a lucrative political environment that is able to delegate responsibilities to the corporate. How does legislation balance this assignment of authority while still in control? The notorious Coca-cola/Pepsi pesticide scandal in Rajasthan, India, and the responses/interactions of a foreign multinational can provide us with a rough guide to understand a version of the ever-evolving state-society-corporate relationship (Raman 104). How does the government react to companies inviting themselves into their social sphere? How do the definitions of Corporate Social Responsibility differ between institutions and why might they push political limits? Not all corporations push limits, but rather engage in CSR in varying ways of value creation such as: corporate philanthropy, corporate governance, and corporate social entrepreneurship (Schwab 110). How can we delineate CSR so that it is fair to all stakeholders?
Gary Johns writes explicitly about Corporate Social Responsibility – dismantling it as a “political ideology that wants private interests to be subsumed by the public interest as defined by a narrow range of players” (Johns 369). Previously, using corporations as a vehicle for political modification was seen as imperialist. Johns writes that having such businesses do so in the “name of good principles” (371) leaves them susceptible to discrimination; it alters the corporation’s mission and improperly places it in the duty of authority. He poses an interesting question: “In whose interests should the enterprise be run” (371)? The interests of stakeholders should not be the sole interests considered. Klaus Schwab offers a subdivision of CSR and a new imperative for business: Global Corporate Citizenship. His definition states that “companies must not only be engaged with their stakeholders, but are themselves stakeholders alongside governments and society” (108). To Schwab, CSR leads to confusion. Rather, it is imperative to discriminate between the different types of corporate activities. The author then goes on to discuss what has led to the rise of CSR, namely, a shift in the global power equation, the emergence of a more active civil society, and an interest of the UN and World Economic Forum on the intersection of business and state (109). International organizations have largely focused on the development and exercise of programs, such as the UN’s Global Compact to “promote ethics, moral standards and socially acceptable principles” (Schwab 111). Companies experience more of a civic duty to contribute to sustaining the welfare of the globe. However, often for practical reasons, the head of a business shies away from CSR because their commitment is only recognized in the short term (116).
Bert Spector proposes an establishment period for CSR, including an excerpt from the Harvard Business Journal in 1946. It reads, “there is a type of literacy to be demanded from the leaders of the community such as we have never had in this country before… the country has to take world leadership” (Donald K. David 315).  The context of the statement implies that after World War II, demands will be made on american enterprises. Businesses were involved in war production, and executives declared their patriotism. The ideology of the Cold War hardened into the mentality of americans after 1949 (317). Using this framework, corporations were able to position themselves against the spread of communism; they could selfishly encourage free market trade and profess themselves as “agents of worldwide benefit” (319). CSR was an opportunity to authorize legitimacy in the new corporate world. We are able to see examples of such establishment within India. Author Seema Sharma claims in her article that, after 1991, India was one of the states in which the discourse of neo liberal philosophy of the West and Corporate Social Responsibility was arising (Sharma 583). Sharma gives three possible time periods for the emergence of CSR: the great depression, the cold war, and the onset of globalization (584). She states, “new forms of political regulation are required which are over and above the nation state so that the political order can be re-established and economic rationality circumscribed” (584). The academic journal goes on to discuss how India’s Prime Minister defined CSR, refusing to accept it as a western management concept, and how this allowed for the ‘carving’ of space for the corporate to intervene. However, the author reports that business institutions utilizing CSR as a vehicle for goodwill poses a threat. “The corporate are known to flout labor legislations, use underhand tactics, unfair and unethical practices in business with disregard to laws,” (591) says Sharma.
A clear-cut example of such disregard is the Coca-Cola/Pepsi pesticide leak in India, in alliance with groundwater exploitation leading to unfavorable impacts to villagers with little to no civic voice. The responses and interface between the corporate, state, and society are even more striking. Authors K. Ravi Raman and Neeraj Vedwan consider the discourse of Coca-Cola’s CSR to the Indian population in their individual complementary essays. Raman denotes it as “hegemonic… being used as a strategy by proponents of neo-liberal corporate led globalization but in a way that conceals the nature of interventions and the mechanism of its own invention” (Raman 113). While the corporate conceals the case, their CSR reports boast their economic assistance to other philanthropic endeavors, such as the preservation of groundwater and donations to HIV/AIDS foundations (Raman 109). This type of coverage leads us back to the question: What really is ‘good’ CSR? The concerns draw our debate to third world countries, in which Vedwan argues often indulges in negligence of proper international protocol (Vedwan 663).
The overall consensus of the six authors seems to be that the rise of Corporate Social Responsibility transpired after World War II, and gained recognition through the Cold War time period. After the Great Depression, businesses learned to serve their communities as a prevention technique for revolution (Sharma 584). Just a couple decades later, an anti-communist ideology was being spread by the ‘western’ world; business leaders were all risk in this endeavor. Harvard Business Journal read, “We, as citizens of the world, are engaged today in the most colossal struggle for the control of men’s thinking that the world has ever seen” (Spector 319). A “culture of consumerism” was circulating the globe, promoting capitalist jargon using the words ‘freedom’ and ‘choice’ (Vedwan 666). The 1970s for a major part of the world was categorized by the corporate introduction of ‘neoliberal reforms’ including “downsizing, cutting wages, reformulating conditions of labor, and plundering natural resources” (663). The introduction of CSR was, in a way, a strategy to suggest ethical obligation and invalidate the political ideological scrutiny of the globe (663). The government in India in 1976 had proposed the phrase ‘socialist’, therefore investing in a political evolution mechanism that implied supervision and authority of the Indian state. Only 15 years later, the country launched an agenda to liberalise its economy, leading to the proliferation of large corporate brands (Sharma 583). Another analogous understanding of all six authors is that the fall of the nation-state, consequent to globalization, allowed for unoccupied spaces for businesses to fill as solutions to civic stability. However, this leads to sticky integration of corporate, societal, and governmental functions. Corporate Social Responsibility is employed and understood according to the nation that governs it, which we will see, in many cases, is disrupting to the cultures and consumers within it (Sharma 592).