Not Business as Usual

This post is in response to Aneel Karnani’s article in the Wall Street Journal, The Case Against Corporate Social Responsibility.

Before I comment on the article I want to talk about some fundamental trends:

  • Many old world companies are hierarchal structures that are under threat because of the new way in which consumers and employees are interacting with them.
  • Consumers want brands that they relate to, talk with them and not at them.
  • Similarly, employees are increasingly wanting to work for organizations that are flatter more transparent and are built around values the Gen Y relate to.

The WSJ article is built on the fundamental premise of ‘business as usual’.

After 2008 there has been a fundamental shift in business, employee and consumer mindsets that states that corporations are public citizens. A company without its people is only a set of processes that fall apart without the support of any one of it’s stakeholders – employees, consumers or shareholders. The company cannot therefore exist without ignoring the fundamental principles of Sustainability and Social good.

Today the fight by indigenous people in many parts of the world and the reduction in trust against corporations is only a function of the unsustainable practices by many. Sustainability and social good are fundamentally interlinked, taking a reductionist view that only talks about profitability implies ignoring the very real trends in customer and employee behaviour that we see today.

Companies who have understood this trend have fought back with changed products, greener supply chains, reduced emissions and flatter work structures with increased transparency and built in CSR initiatives that support core values.

A change in behaviour has been propelled by the corporate desire to ‘do no harm’ as well as to ‘do well by doing good’. But there are times when change is fundamentally difficult, in many such cases corporates take the path of CSR initiatives that may be extraneous to core principles. While in both cases there are examples of greenwashing and internal naysayers and a struggle for resources, It does not take away from the fact that the world is facing the threat of depleting resources and growing population, to have a long term view of business, Sustainability and CSR are no longer optional.

The increased role of the corporation in society is a reality and cannot really be seen as ‘dangerous illusion’ after all many corporations are larger than countries today.

In conclusion – “It is no longer business as usual“. The WSJ article takes the case against CSR in a reductionist view and does not conduct a systemic analysis of the trends of today.

Taking this point and many more Aman Singh builds a brilliant case against the views of Aneel Karnani. Read it here, In Good Company: Vault’s CSR Blog – Why There Is a Case for Corporate Social Responsibility, Despite WSJ’s Obituary.

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