Is the Socially Responsible Corporation a Myth? the Good, the Bad, and the Ugly of Corporate Social Responsibility

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Academy of Management Perspectives

May

F R O M

T H E

E D I T O R S

Is the Socially Responsible Corporation a Myth? The Good, the Bad, and the Ugly of Corporate Social Responsibility by Timothy M. Devinney

Executive Overview
Despite differences of opinion about the efficacy of corporate social responsibility, there is a general consensus among academics, policy makers, and practitioners that corporations operate with a social sanction that requires that they operate within the norms and mores of the societies in which they exist. In this article I argue that the notion of a socially responsible corporation is potentially an oxymoron because of the naturally conflicted nature of the corporation. This has profound implications for our understanding of corporate social responsibility, what we view as the relevant issues relating to it, and how we investigate its role and impact.

Corporation: An ingenious device for obtaining individual profit without individual responsibility. Responsibility: A detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck or one’s neighbor. In the days of astrology it was customary to unload it on a star. Ambrose Bierce, The Devil’s Dictionary (1911)

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t is a central tenet of advocates of the concept of corporate social responsibility (CSR) that corporations receive a social sanction from society that requires that they, in return, contribute to the growth and development of that society. There is little argument as to the existence of this sanction but considerable debate as to whether it requires more of the corporation than the obvious: enhancing the society by creating and delivering products and services consumers want, providing

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employment and career opportunities for employees, developing markets for suppliers, and paying taxes to governments and returns to shareholders and other claimants on the rents generated by the corporation. For those with a narrow conception of CSR, the corporation has little, if any, obligation to the society other than the creation of economic rents that can accrue to the stakeholders with recognized rights to those rents. For those with an expansive view of CSR, the corporation should serve as an instrument of public policy by other means. For those seeking a compromise, CSR is something in between these two extremes. The discourse between the two extremes has, to some extent, taken on the characteristic of a religious debate, since little fact or science has been brought to bear that would reveal what the costs and benefits of CSR truly are. This has arisen not simply because many of those involved in the debate have a vested interest in the outcome and

Timothy M. Devinney (T.Devinney@unsw.edu.au) is Professor of Strategy in the School of Strategy and Entrepreneurship at the Australian School of Business. Copyright by the Academy of Management; all rights reserved. Contents may not be copied, e-mailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express written permission. Users may print, download, or e-mail articles for individual use only.

2009

Devinney

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hence want to control the rules of the debate, but more because the definition of CSR has itself been malleable (see, e.g., Aguilera, Rupp, Williams, & Ganapathi, 2007). To those with a more corporatist orientation, CSR includes activities such as mandated environmental and occupational health and safety practices, but excludes claims by outside stakeholders on the rents of the firm (Banerjee, 2007). To those with a more expansive viewpoint, CSR involves corporations acting on behalf of the disadvantaged and demands active claims on rents by broad sections of the society, however defined. Hence, in a Kuhnian...
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