Ethics vs Profits?
I have generally viewed Corporate Social Responsibility as an initiative that mitigates and hedges the social risk that accompanies the aggressive growth of organizations, but also as one that is separate from their regular value-based management strategies. The insightful commentary in the HBR article “The Truth about CSR” however proves otherwise.
The Theater one strategy of pure philanthropy is detached from the business objective of profitability. Theater two and three strategies are in line with Milton Freedman’s idea that the social responsibility of business is to increase its profits and Edward Freeman’s opinion that capitalism’s success is when all stakeholders work together to create something that none of them can singly bring to fruition. In fact, Corporate Social Responsibility very easily complements Value-Based management. Grupo Bimbo in Mexico and Target in the USA combine their strong brand image and philanthropic reputation to benefit the community and themselves in a Theater two strategy.
Hindustan Unilever’s Theater 3 Approach
Project Shakti, Hindustan Unilever’s attempt at a Theater three or transformed business model demonstrated monumental success in not only creating revenue, but in also widely benefiting the communities it operates in.
The existence of stakeholders other than shareholders is a reality. Acknowledging this reality and being fair and beneficial to all stakeholders makes business and ethical sense.
Stakeholders United!
Sources:
- Rangan, Kasturi, Lisa Chase, and Sohel Karim. “The Truth About CSR.”Harvard Business Review. Harvard Business School, 01 Jan. 2015. Web. 17 Sept. 2015. <https://hbr.org/2015/01/the-truth-about-csr>.
- http://www.hul.co.in/Images/unilever_diagram_v3_502x357_tcm114-414067.gif
- http://network9.biz/wp-content/uploads/2014/04/Branded-content-profit-vs-ethics2.jpg
- https://www.google.ca/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCKu438jC_scCFQKjiAodXmAERw&url=http%3A%2F%2Fservicecommunicationstoday.blogspot.com%2F2010%2F06%2Fservice-communication-plan.html&psig=AFQjCNFiz3av5e-AxVBQpDxTvO6o4nw_cg&ust=1442594735143673