2010 - Public Relations Society of America

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