From the WTO and G8 protests of 1999 (which was the largest ever anti-globalisation event at the time) onwards to the recent Occupy movement, skepticism to the role of the corporation has been matched by large corp’s own growth, and influence. It’s no surprise then that when many big firms try to launch corporate social responsible (CSR) initiatives, their motives are routinely challenged by critics.
“Even worse, the more business has begun to embrace corporate responsibility, the more it has been blamed for society’s failures.” Michael Porter
But CSR is a very one dimensional way of assessing an organisation’s social impact. Companies create value in many obvious ways that frequently get overlooked – job creation, boosting local economies, and providing infrastructure (of course these have to be weighed against the company’s negative impact – exploitation of natural resources etc.)
Can big companies deliver social value?
Pre 1950s, companies’ purpose was often intertwined with a social mission. Delivering shareholder value was inseparable improving local communities and caring for its employees. Many great examples can be seen in the likes of Quaker, Cadbury or Guinness.
Since then (citation needed) CSR has seemingly replaced that function for most big businesses and this change has been seen to be disingenuine to really improving social issues and believed by many to be a way to compartmentalise the social function of a business.
Increasingly the role of doing social good has been parceled into ‘giving’ charities grant making foundation, and CSR departments. All of which have been criticised for their ability to truly transform the conditions of the very people they are trying to serve, and often are perceived to create reliance upon the aid that is provided. This isn’t always true of course, many of these charities go far beyond and work closely with communities to create lasting and sustainable change.
With the increasing dominance of big companies, we need to find ways to help shift the balance back to the days of shared value. Many smaller efforts have been attempted. For example the notion of the social business as defined by Muhammad Yunus, founder of Grameen. Yunus created what has been described as the first micro-finance business – a sustainable model for helping impoverished entrepreneurs escape their situations by turning the traditional model of lending money on its head. Traditionally, loans are based on a risk assessment – if you’ve never been loaned money you’re unlikely to be a good bet – even worse if you don’t have a roof over your head or stable income. But then how does one escape their situation when you live in a community with no opportunities? Grameen Bank was created to leverage group and societal behaviours of peer pressure and belonging to help people stick to their goals and build successful businesses. It’s so successful in that its rates for defaults are second to none, especially when compared to traditional banks.
How do you create this kind of change? One mechanism is to celebrate those who are doing it and create incentives and encouragement for them to be more successful. This is exactly why the Fowler Center for Sustainable Value has recently sponsored a challenge on OpenIDEO.com to try to design such a platform.
It may be just as important to support the smaller self-initaited efforts of startups and NGOs as it is to encourage change in larger, monolithic enterprises. With the shift towards more purpose–driven firms, it seems obvious that aligning the dreams and aspirations of employees with the societal need to improve the well being of the communities we live in.
If you’re interested in this kind of problem, why not join our latest challenge on OpenIDEO.com.
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