2010 - Public Relations Society of America
2010 - Public Relations Society of America
2010 - Public Relations Society of America
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the past decade. Despite the preponderance <strong>of</strong> companies conducting business ethically and<br />
responsibly, these episodes contribute to growing public distrust. On the other hand, the current<br />
economic conditions create a conundrum: businesses struggling to survive may not see<br />
themselves as capable, in these circumstances, to contribute financially or even in kind to the<br />
community welfare, though many in those communities stand in greater need than ever.<br />
The current economic situation notwithstanding, the challenge remains <strong>of</strong> defining the<br />
proper relationship between an organization, particularly a pr<strong>of</strong>it-making organization, and the<br />
society within which it operates. To varying degrees depending on the role <strong>of</strong> the free market,<br />
businesses play an essential role in societal functions: creating jobs; generating revenue; etc.; and<br />
those businesses depend upon society, largely through government structures, for services and<br />
infrastructure such as a skilled and educated workforce, transportation conduits, utilities, and so<br />
forth. Yet the struggle to strike and maintain the right balance, including between self-regulation<br />
and imposed regulation, is an ongoing one.<br />
Questions pertaining to CSR are daunting and expanding. No single study or even a<br />
stream <strong>of</strong> studies can hope to exhaust or settle the issues. This paper describes the result <strong>of</strong> a<br />
focused project aimed at revealing, within one geographic sector, the extent to which CSR<br />
matters in a measurable way, and suggests this rational measure is a reasonable gauge <strong>of</strong> moral<br />
impact.<br />
Literature Review<br />
We could begin this section with a lengthy discussion <strong>of</strong> how CSR should be defined, but<br />
the space would be better used to frame this project more narrowly. This author agrees with<br />
Werther and Chandler’s (2006) observation: “Businesses operate against an ever changing<br />
background <strong>of</strong> what is considered socially responsible. CSR is not a stagnant concept. It<br />
continues to evolve as cultural expectations change, both here (in the U.S.) and abroad” (p.12).<br />
Consequently, it is wise to describe CSR in more general, elastic terms than to define it<br />
succinctly so as to prevent the concept from responding to changing circumstances, expectations<br />
and opportunities. For the purpose <strong>of</strong> this study, it will do to acknowledge, as does Joseph<br />
(2001), that CSR embraces areas such as treatment <strong>of</strong> the workforce, impact on the marketplace,<br />
impact on the environment, support for the community and commitment to human rights. Smith<br />
(2003) <strong>of</strong>fers an equally broad approach, maintaining, “CSR refers to the obligations <strong>of</strong> the firm<br />
to society or, more specifically, the firm’s stakeholders – those affected by corporate policies and<br />
practices” (p.53). He uses the term “paternalistic capitalism” to convey the sentiment.<br />
As CSR issues continue to generate academic and pr<strong>of</strong>essional discussion, most<br />
representatives <strong>of</strong> both those sectors are familiar with the central arguments <strong>of</strong> whether CSR is<br />
an appropriate concern <strong>of</strong> business and, if it is, whether the motivation for it is to be found in<br />
pr<strong>of</strong>its or moral imperative. Berkhout (2005) summarizes the face-<strong>of</strong>f well, citing Milton<br />
Friedman’s familiar claim that the only responsibility <strong>of</strong> business is to make pr<strong>of</strong>its while acting<br />
within regulatory constraints. Berkhout says the contrasting position is that CSR actually<br />
reinforces rather than undermines pr<strong>of</strong>it-making potential. Still, he concludes that, “Both sides<br />
agree that a company should only adopt practices that are deemed pr<strong>of</strong>itable” (p.16).<br />
Significantly though, Smith (2003) notes that the call for socially responsible behavior by<br />
business is becoming more urgent, driven, he says, by globalization and the expanding power<br />
businesses exert. He points out that demands for responsibility are coming from “mainstream<br />
quarters <strong>of</strong> society” (p.55) as well as activists. Handy (2002), even well before the recent<br />
economic downturn, passionately but reasonably noted and lamented the prevailing business<br />
measure <strong>of</strong> merit – shareholder value as gauged by share price. He acknowledged that corporate<br />
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