Corporate Social Responsibility in Context:
Links: Imagining Other Index page
For further notes on economists and related political ideas, see:
Marx (and related sections of notes on political philosophy),
New Statesman supplement, ‘Should Business play a role in
addressing poverty in the
* For Chapter 1: definitions:
The IEA has – along with the Adam Smith Institute – received money from the tobacco industry:
* For Chapter 2: history (part 1):
How far have we come with CSR? Article reporting a round-table discussion February 2014:
http://www.theguardian.com/sustainable-business/new-calling-for-capitalism - seems to me to show we have made little headway. Criticised as obstructing more social awareness is the system of stocks and shares (“the drive for shareholder returns reflects a ‘systems-wide problem’”) [what’s new there?!]
Still, says one participant, capitalism is such an incredible system it can do things really quickly and engage incredible powers of innovation but “they’re just not really pointed in the right direction” [how is the system to get turned round to point in the right direction?]
Suggestions include making sure the education of professionals in the financial services should include what seems now to be called ESG – environmental, social and (corporate) governance issues [the first srb/csr courses in higher education started over 40 years ago – not much progress here, then]
We need to educate civil society said another participant... [without saying how – apart from discriminating purchase of ISAs etc – the public is going to affect the outlook of finance companies, pension funds etc: where is the leverage?]
And this means more transparency... [so more information is all we need?]
Fund managers have to lead, say some – UK pension funds have assets of £2 trillion... and Tony Greenham of New Economics Foundation makes the [time-worn] point that ‘It is easy to make a case that, over the long-run, profit and protecting long-term wellbeing will coincide’ [I used to follow the NEF, but this point only takes us round in a circle: the whole system is based on short-term profits/returns on shares]
The only concrete proposal appears to be Carbon Tracker, which shows that there is more coal and oil still to be extracted which we just cannot afford to use ‘if we are to stay within internationally agreed targets for reducing CO2 emissions’. So, if the true value of fossil resources were reflected in the value of the extracting companies... In other words, once pension fund managers and central bankers realise the risks they are running, they will realise the business case for investing in a greener economy.
This, it is claimed, is compatible with market economics and competition [but how are fund managers and bankers going to be persuaded of all this?? The crucial question remains unanswered it seems to me!]
* For Chapter 3: history (part 2):
Topics in alphabetical order:
Sir Geoffrey: Obituary,
reminded me of my earliest work on Corporate Social Responsibility: Corporate Social Responsibility - Contents Page. Peter Donaldson’s television programmes, based on his book Economics of the Real World, were a strong influence on me, (and I used recordings of them in my teaching) and if I remember rightly, Donaldson interviewed Chandler about the ‘social responsibility of business’ (as CSR was known then) – and I was struck by his strong, clear argument that business simply had to do good for society.
Of course, he was no revolutionary – not a socialist by any
stretch of the imagination, but the presence in business of people like him
probably convinced me that to stick narrowly to a radical and/or revolutionary
line was not going to have much effect on the real world. Undoubtedly
Ethical shares – Money Gdn, 080809 questions investment in Tesco and other supermarkets. Jupiter Ecology doesn’t, but many others do (incl. F & C Stewardship Growth, the biggest of the ethical funds). But Tesco has sales of £1 bn a week, and an investor can put pressure on them to be more ethical – e.g. Co-operative Investments’ Sustainable Leaders Trust. See also Guardian’s book: Green Money: how to save and invest ethically by Sarah Pennells. £7.99
Multinationals: April 17th 2011, Observer: lists ‘invisible giants’ – i.e. business multinationals which try to keep a low profile: Glencore (trades in minerals and metals, grain and energy, plans biggest stock exchange flotation ever: $60 bn, creating 485 instant millionaires…); Saudi Aramco (controls ¼ of world’s oil reserves, 55,000 + employees, may have exaggerated amount of oil reserves); Cargill (US agribusiness – 80% owned by descendents of founder WW Cargill – including 7 billionaires); ISS (Danish outsourcing company, cleans RAF bases, provides security at hospitals etc – 250,000 employees); INEOS (UK/Swiss: chemicals – part-owner of Grangemouth refinery); Bridgewater Assocs (hedge fund, focuses on currency speculation, trading govt bonds, and fixed-income debt); Permira (UK private-equity, owns: Hugo Boss, Birds Eye, the AA, Saga, New Look – capital of L18 bn); Noble Group (Hong Kong – trading company); Koch Industries (US 2nd largest private cy in the US, employs 70,000 and made $32 bn acquisitions since 2003); Sinopec (China – petrol group 7th in Fortune list of biggest companies, revenue $187 bn).
Philanthropists and business leaders, to support campaigns to preserve environment (etc). Article G 28.12.2011 – Juliette Jowit on how campaigns such as ending slavery involved a well-known figure e.g. from the world of business. With slavery was Charles Grant, chair of East India Company
Who declared his support for William Wilberforce. British lawyer Polly Higgins wants ‘ecocide’ to be made illegal – by making it a fifth crime against peace in the international criminal court. Need to open an amendment to the 1968 Rome Statute that established the court and with two-thirds of the statute’s signatories in agreement it would become law. (Ecocide is illegal in war but not in peace-time!). Higgins believes she needs a prominent figure to back the campaign – e.g. Bill and Melinda Gates (have spent more than $26bn on their foundation, promoting development and health – but acknowledging that climate change is part of this). Or Warren Buffett who has also given away billions to good causes and opposes new coal-fired power stations. Even the chair of Nestle, Peter Brabeck-Letmathe, who has said charges for water ought to be increased (presumably only in the developed world!!!).
Notes Cameron’s determination to privatize, but also the difficulty of comparing private with public/in service provision – though the latter is public and transparent...
Worker-owned enterprises: Letter Guardian from Andrew Gunn former Chair Employee Ownership Assn. says what a pity Cadbury didn’t follow John Lewis, Ove Arup, Tullis Russell, Scott Bader and Baxi Group into employee ownership.
Caulkin, Simon (notes from The Observer)
14.06.09: Simon Caulkin is losing his column because of cost-cutting… In his last piece he writes: whenever people were asked about their view of management, there was a totally different picture to what management itself claimed: “the talk was of empowerment, shared destiny, pulling together: the walk was increasing work intensity, tight performance management, risk offloaded to the individual” – the talk was flat organisations: the reality, centralization and a yawning divide between other ranks, required to minimise their demands for the greater good, and a remote officer class whose rewards had to soar to motivate them… Employees were the most valuable asset – until costs had to be cut.” The customer wasn’t king: hence all the mis-selling scandals.
Shamefully this story reached its climax under a Labour government (*) that not only encouraged ethics-free market-led management principles in the private sector but even imposed them on the public sector. The credit-crunch is a management failure (not a market failure). Labour also oversaw: Soviet-style targets and inspection regimes, and locked government into lucrative contracts for IT with private suppliers that have “made the public sector systemically less capable than it was 12 years ago”.
The management model that has run us for the past 30 years – along with the economic model (rational expectations, efficient markets) is “bust, dead, finished – a mortal danger to us and the planet.” But there have been saner voices “at the margins” – e.g. John Lewis; and there should be more academics engaging with big issues (at risk of losing their jobs!); “courageous public-sector managers who find ways of circumventing the draconian targets regime to do what they know to be right” should also get more support now the old model is dead.
Norms matter – because as Michael Sandel said in the 2009 Reith lectures – “they so easily become self-fulfilling”. We need to be debating the norms that go with a “post-financial form of management.”
(*) See also Will Hutton in same issue – see pp17 socialism since Marx.htm #Labour in thrall to finance
07.06.09 the bankruptcy of General Motors: this company was the embodiment of ‘the visible hand’ (Alfred Chandler’s expression) i.e. management. Contrasting with Ford, GM had rational administrative co-ordination, a multidivisional structure, with separate divisions corresponding to each market segment (Chevrolet, Cadillac etc). This model was highly influential on other firms. Peter Drucker wrote The Concept of the Corporation after observing them in the 1950s.
However, Ford adopted GM’s management model and succeeded in producing so many cars so cheaply that it undercut GM (though it had to use more advertising and make cut-price offers to overcome consumer resistance…) – then the Japanese found how to produce cars cheaply but of better quality, and were more in tune with what customers wanted.
Since the 1980s GM has been in difficulty, outdone by Ford, and it tried changing brands, management, etc. to no avail.
The GM management model has not been discredited though, and is popular in the service sector: financial and communications companies have been developing global low-cost supply chains, and mass-produced services – the emphasis is on economies of scale and low transaction costs achieved through specialisation and standardization – result: white-collar factories (HM Revenue, DWP etc) which are inflexible, error-prone and customer unfriendly just like car assembly plants. But we can’t use he mass production approach in services – the ‘standardise-specialise-automate’ formula doesn’t work where there is a variety of service demand… Services need well-organised humans, not computers to produce effective (and cost-effective) results.
Services need to develop a post-industrial management model: more sensitive to customers (than mass production is), more responsible (than the financial sector is), and less wasteful – by dismantling the GM model.
31.05.09: 40 years ago, markets were restrained by checks and balances, whilst individuals were fairly free – now the reverse is true, markets are free and individuals hemmed in (*). In management also, in the 1960s there was a more paternal management (and less of it!), and it was reined in by collective bargaining, stronger trade unions, and convention – so that management, in reaction, demanded its ‘right to manage’, and there were complaints about ‘workers’ demands’ (which all seems strange today!).
Since then, ‘risk’ has been passed down to the workers e.g. in terms of pensions, and there is more control of the individual through appraisal, targets and inspection – whilst manager have more freedom.
The results of all this were very
bad: free financial markets destroyed pension pots and savings. Globally the
share of income going to capital has risen at the expense of labour. See the
In The Puritan Gift by Will and Kenneth Hopper, it is argued that until the 1970s, management was based on Puritan values: the collective is more important than the individual (and idealism, skills, and the ability to organise behind a single aim were valued). But then ‘neo-Taylorism’ came into favour: quantitative techniques, ‘cult of the expert’, and consequently the worship of heroic CEOs and of business schools. ‘Raging self-interest and the malign influence of shareholder value did the rest’.
However, the Hoppers suggest that now the most enlightened
firms are looking to
(*) but of course individuals now have more ‘free choice’ in consumption of goods and leisure… though ‘you can fool some of the people all of the time, and all of the people some of the time…’ see notes on the consumer, Chapter 5 (link below).
The Luddites – article from Post-16 Educator 68, July - Sep 2012, by David King, former molecular biologist who has written on issues relating to genetics and society since 1990. He is involved with www.luddites200.org.uk (email email@example.com): Nov 2011 – Jan 2013 is the 200th anniversary of the Luddite uprisings.
They opposed - not all technology but - technology ‘hurtful
to Commonality’ (i.e. the common good). They only destroyed those machines that
would destroy jobs. In Feb 2012 the government passed the Frame Breaking Act
introducing the death penalty for machine breaking. They were also opposed by
the owners of larger mills, magistrates and troops. Riots destroyed two mills
David King argues – as do I (in Chapter 4 and Chapter 6) – that technology is not neutral, but works within a system. Also that science grew up with capitalism and with a desire to dominate nature.
See also: the
‘The story of science is normally told as if it developed independently from society, yet in reality science could only happen in a society [with the same values]: pragmatism, empiricism, materialism etc. The liberal view that science follows its own internal dynamic, driven only by curiosity, is designed to mask the fundamental intertwining of science and capitalism... even in its purest form scientific discovery serves capitalism by creating a more and more accurate map of nature, creating opportunities for manipulation.
Marxists have tended to believe in the myth of progress through technology, and have abandoned their own method of examining the social context when thinking about science and technology.
Since the 17th century the ruling concept of
Western society has been the smoothly functioning, efficient machine. This has
underpinned the division of labour, and led to the obsession with ‘management’
of society etc. A recent paper for a conference on Earth System Governance
said: ‘You cannot manage what you cannot measure.’ Taylorism,
eugenics, Technocracy all follow.
Above the 1933 Chicago World Fair proclaimed: ‘Science Discovers, Technology Executes, Man Conforms.’
Capitalist technologies empower the powerful and marginalize the weak.
The idea that science/technology can be used to manipulate the climate – is ‘entirely out of touch with reality... simply insane’!!
See also notes on the labour movement (social movements notes).
Lucas Aerospace lives! Anne Karpf wrote in Guardian: http://www.guardian.co.uk/commentisfree/2012/jan/31/jobs-growth-workers-vision?INTCMP=SRCH
(– see also Chapter 4, link above).
Daily Mail: 2 leading corporate governance consultancies have criticised Daily Mail & General Trust for its dual share structure which allows chairman Lord Rothermere to control the company, and recommended that shareholders reject its remuneration report in protest. Editor Paul Dacre has a £1.3m salary – while the Mail is always complaining about ‘fat cats’.
Management: study by The Work Foundation, published 160110 (see G) by Penny Tamkin, leaders who remain focused on numbers and targets - and tasks - need a paradigm shift, to focus on people… Based on 250 in-depth interviews, six high-profile organisations. Separated good from outstanding leaders: latter always show best behaviour – no tantrums; use selves as facilitator of better performance from others; careful to be consistent (merely good leaders adopt ‘WYSIWYG’); see things holistically; don’t just delegate but stay in touch with staff afterwards asking how they got on, rewarding them etc. Institute of Leadership and Management found (‘Index of Leadership Trust’) similar in recent study – and that almost a third of employees have low or no trust in senior mgt teams, but trust is cornerstone of good leadership. Key is not expertise, knowing the answers, but ability to facilitate new solutions.
5 key skills: seeing the bigger picture, understanding that talk is work, giving time and space to others, encouraging growth learning and engagement, putting ‘we’ before ‘me’.
MBAs and CSR:
Limitations include fact that very few managers have MBAs, and it would prove very difficult to enforce a code for the whole ‘profession’.
But self-regulation, openness and constant feedback are features of internet: eBay, Wikipedia, open source… (Economist 060609)
McClelland, Grigor – Quaker businessman and academic – obituary, Guardian 15.11.13: (did I encounter his work when teaching SRB?)
* For Chapter 5: the consumer by topic, in alphabetical order:
#turbo-consumers (also Baudrillard…)
Eliane Glaser has received flack for her book: Get Real – in Guardian Review 31.03.12 she replies especially to those who say that ‘people are not stupid’: we are all being manipulated and persuaded of things – and she still uses the concept ‘false consciousness’ (see Marxism...). Points out that Nudge idea was promoted in 2010 by Cameron in his ‘nudge unit’ it was to work with such as McDonalds and PepsiCo, and it was directed by David Halpern, former advisor to Blair, and author of: ‘Mindspace: Influencing Behaviour through Public Policy.’ Government, he says, should ‘shift the focus of attention away from facts and information ‘and towards ‘automatic processes [and] altering the context in which people act’. It should become a ‘surrogate willpower’. See:
(Jessica Shepherd, G 151209):
Government (DCSF) inquiry, under Prof. David Buckingham, finds that children as young as five should be taught how to deal with the onslaught of advertising aimed at them… Companies now sponsor school awards, playgrounds (outside school), computers etc. Debatable whether the new products etc introduced are of benefit. Some online marketing techniques ask children to recommend products to their friends…
The Real Mad Men – about Madison Avenue – see csr books…
Brand names: in China Western brand names are
being carefully translated: Nike = ‘Enduring and Persevering’ (pronounced Nai ke), BMW = ‘Precious Horse’ (pron: Bao ma), Coca-Cola = ‘Tasty
Fun’ (pronounced Kekoukele), Heineken = ‘Happiness
Power’, Tide = ‘gets rid of dirt’ (pron: Taizi), Reebok = ‘quick steps’ (Rui
bu), Marriott = ‘10,000 wealthy elites’ (Wan hao) ... (Michael Wines, NY Times 27/11/11)...
Child labour: – and exploitation of third world workers: http://www.guardian.co.uk/world/2013/jul/28/india-sweated-labour
Book: Starbucked: a double tall tale of caffeine, commerce and culture – Taylor Clark, Sceptre, L12.99. Good account of the problems of coffee production, and promises to deal with ethical issues, but is weak on these: not good on unions, and ignores plight of coffee-producers (better conditions during Cold War, as US introduced guaranteed prices and quotas, because afraid of unrest in Latin America turning to pro-communist movement…
Tim Lang (prof of food policy, City Univ) says “we ought to have a worker-sensitive, pro-public health, climate-friendly, ‘right-on’ food supply system. Instead the focus is always on the big three – price, convenience and hygiene…’ He also argues that Government and business together have to agree standards (it can’t be left to Tesco!). In 2006, the Sustainable Consumption Roundtable concluded (Looking Forward, Looking Back): “The evidence suggests that, historically, the green consumer has not been the tipping point in driving green innovation. Instead, choice-editing for quality and sustainability by government and business has been the critical driver in the majority of cases.” i.e. unsustainable etc goods need to be cut out before they get on the shelves!
If object to “choice-editing” (i.e. argument that should be left to consumer) problem is that “there are already people in these companies controlling how and when a bean is grown, what it is sprayed with, whether it is flown in etc. They are already choice-editing.” (Says Tim Lang)
Only question then is, do we trust government and business to do the choice-editing?
‘Greed culture’: Average American consumes more than his weight in products each day, according to annual report of Worldwatch Institute. The cult of consumption and greed could wipe out any gains made from action on the environment. Project director Erik Assadourian: environmental damage is driven by ‘unsustainable habits’. In the last decade, world consumption of goods and services rose by 28% (to £18.8 bn). These habits are not a natural result of growth but due to ‘deliberate efforts by business to win over consumers’.
Average western family spends more on their pet than is
spent by a human in
Younger generation more aware, and school meals had improved (less wasteful, more nutritious). ‘Has to be a wholesale transformation of values and attitudes’ (Suzanne Goldenberg, G Jan 2010).
yearly spend on PP in the
87,000 people a year in
there are just over 8,000 supermarkets in
Neal Lawson: All Consuming www.allconsuming.org.uk – G 030809: we are now turbo consumers – shopping is the predominant way in which we know ourselves and each other – consumer industrial complex of: designers, advertisers, psychologists and retail consultants… the point is to leave us unfulfilled so that we go back for more (nothing new there then! See Vance Packard and John Berger). Totalitarianism … now arrives with a smile on its face as it seduces us into yet another purchase… we are watched, recorded and ordered by our shopping desires. Millions refuse all this, either downsizing or doing ethical shopping – but they are leaderless.
See also Zoe Williams on the psychology of the August 2011 riots: http://www.guardian.co.uk/commentisfree/2011/aug/09/uk-riots-psychology-of-looting - links with Baudrillard: reference in Current Affairs and Issues notes.
For Climate Change (and Global Warming) and the sceptics go to (Social Movements Chapter 8) climate change.
Topics in alphabetical order.
Britain and the developing world.
Aid: ‘Third world’ and aid: New
International Devt Secretary, Andrew Mitchell,
supports overseas aid (NS 020810). Mentions that 4,000 die from malaria each
day, of whom 75% are children under five. Govt has pledged £500
million a year on this. Overall health aid budget is less than £1
bn. Cites Paul Collier: The Bottom Billion. Argues that aid is
Interesting and worrying piece by George Monbiot, on how Bono has fallen into the trap of becoming a lackey for western governments and business:
BAE: (see CSR
Ch 7, SM Ch 4, Section 4) now admits charges of false accounting and making
misleading statements, in dealings with SFO in
Current ‘expenses scandal’
has little to do with MPs’ expenses: it’s come about now because ‘our economic
system can no longer extract wealth from other nations’. For 300 years
We had peace in
Alavi: Capitalism and Colonial Production – the
resource flow from
Ralph Davis: The Industrial
Revolution and Overseas Trade: from the 1760s
Hobsbawm: The Age of
While the French overthrew
their monarchy, our aristocracy was using enclosure to seize wealth from the
poor, as well as taking remittances from
The Blood Never Dried: in 1748
Mike Davis: Late Victorian
Holocaust: between 1876 and 1877 wheat exports from
Joseph Stiglitz: Globalisation and its Discontents: northern traders gained hundreds of billions of dollars from Asian economies through the IMF’s enforced liberalization of capital – and this precipitated the Asian financial crisis of 1997-8.
Is the dominance of the
Fair Trade: article in NYT/Obs Dec 11th 2011 about row developing within the movement: Fair Trade USA wants to break with the man body and make changes such as taking coffee from large plantations (otherwise banned) and to put seal on products with less than 10% fair trade ingredients (elsewhere is 20% minimum).
Sales of Fair Trade goods
were $5.8 billion globally in 2010, and $1.3 bn in
How appalling, that so little TV time is allocated to factual programmes about the ‘majority world’ – for example Phil Harding (G), reporting on Oxfam study:
www.oxfam.org.uk/globalswitchoff: ITV broadcast 5 hours of factual
coverage of the developing world in 2007. Most of our programmes are about US
Kony 2012: – video about the Ugandan warlord Joseph Kony, made by Jason Russell. Observer 03.03.13 has piece on how it and his charity – Invisible Children - was attacked. Kony had abducted 30,000 children and turned them into soldiers and sex slaves. The video ‘went viral’ (in six days it had 100 million hits). But when Jason had a breakdown, 10 days after the release of the video – probably suffering from post-traumatic stress – this too became a viral video and was then used to discredit his charity. And Google hits for Kony went from zero to 100 in a day, then went down to zero again.
Jason feels his breakdown was because he got
reactions that were polar opposites: Bono et al praising him,
and others attacking him as a ‘white saviour’ sending money to corrupt places
etc. The video was dismissed as ‘slick’ – even though it represented nearly 10
years of interviews etc in
Lessons: the power of the internet (where you can find statements that Kony is dead... Says Jason: ‘This is a generation raised on Instagram and a tweet That’s your
news. That’s your actual news... a multiverse of stories – the truth never has a chance’), hostility to aid, suspicion of mental illness... And the difficulty of ‘getting’ people like Kony...
Record corporate profits as proportion of
Poverty: Bono claims – at TED conference on global poverty (Feb 2013) that proportion of the world’s population living in extreme poverty ($1.25, i.e. 80p, a day or less) has declined from 43% in 1990 to 21% in 2010. If this rate continues, extreme poverty would hit zero% in 2030.
Examples: Dharavi, slum in Mumbai – approx. 1 million residents
(two-thirds of popn of M live in slums, M is richest
houses ¼ of
G 270110: tax lost to developing countries through corporations’
tax avoidance is between 30 and 180 bn each year – compare
From Guardian, 06 and 07.11.07: companies in the banana trade are paying less than half the tax expected, by locating subsidiaries in low-tax havens (transfer pricing).
Tax paid by UK-quoted companies in 2000 was 26.6%, and in 2004: 22.1% (would expect 30%). They say they are cutting costs to the benefit of shareholders, but tax is not a cost, but a distribution out of profits. Tax is a return to the society in which a company operates, and pays for use of infrastructure (physical and e.g. legal), education of workers that the state has provided etc.
A company is a legal entity, and this gives it a licence to operate, which in turn carries an obligation to pay tax on profits – and that tax should be paid where it operates, since here it finds staff, customers and infrastructure.
Transnationals pay tax
where their “brand” or “purchasing network” or “distribution network” are
located. They are assisted by lawyers and accountants, e.g. Pricewaterhouse
Cooper is alleged to have been involved in setting up a tax haven in
This is not only avoiding their social responsibility, but leads to public paying higher taxes (e.g. in Britain ordinary people’s tax rates have risen as companies’ have fallen) and encourages people to think the way ahead is to opt out of society.
By Richard Murphy, director of Tax Research LLP, see www.taxresearch.org.uk/blog
The lack of sanitation is the biggest killer of children under five in the developing world. Hopes of eradicating poverty and hunger depend on sorting out safe sanitation, more than on any other intervention. www.wateraid.org