Running head: CORPORATE SOCIAL RESPONSIBILITY 1

Corporate Social Responsibility:

Tangible Item or PR Fluff

Charmaine Barton

Dr. Angela Specht

June 08, 2015

CORPORATE SOCIAL RESPONSIBILITY 2

Corporate Social Responsibility: Tangible Item or PR Fluff

Social responsibility is generally defined as an ethical framework that can be used by an

entity, organization or person, to make decisions that enhance or benefit society at large. It is

easy enough to see “social responsibility” in decision making based on World Wildlife Fund

(WWF) Canada’s slogan “For a living planet.” Social responsibility can even be seen in Pierre

Trudeau’s famous “Just watch me,” regarding the Front de Libération du Québec (FLQ) crisis in

1970 and the eventual imposition of the War Measures Act. However, until recently, it was hard

to see social responsibility in private sector slogans: “Only in Canada? Pity” (Red Rose Tea);

“Swedish for Common Sense” (IKEA); and “Always” (Coca-Cola). But in the early twenty-first

century “socially responsible” slogans abound in the private sector: “Buy a Lady a Drink” (Stella

Artois); “Loads of Hope” (Tide); and, “Campaign for Real Beauty” (Dove). Is “corporate social

responsibility” (CSR) something solid or is it “directed self-interest” on the corporation’s behalf?

This paper will look at how CSR is defined in academia, the media and by the

government. The paper will then consider whether or not the public-sector (i.e. government

should regulate/legislate CSR on the private-sector. Further, a look at how relationships between

private-, voluntary-, and public-sectors have/not changed under CSR. Finally, the paper will

discuss if CSR is an important public policy and advocacy area, in an era of increasing global

trade and internationalization. In conclusion, this paper will attempt to answer the question: Is

CSR a “real” thing, or is it merely directed corporate self-interest?

What is “Corporate Social Responsibility”?

Before tackling the phrase, each word should be defined separately. Using the on-line

reference “dictionary.com,” each word is defined thus: Corporate is an adjective defined as “of,

CORPORATE SOCIAL RESPONSIBILITY 3

for, or belonging to a corporation”; which is defined as “an association of individuals, created by

law or under authority of law, having a continuous existence independent of the existences of its

members”; thus, a corporation is inanimate, as it can survive the death of one of its members.

Social is an adjective defined as “of or relating to human society.” The trickiest word/concept:

Responsibility is a noun defined as “the state or fact of being responsible”; whereby responsible

is an adjective defined as “having a capacity for moral decisions and therefore accountable.”

Thus, “corporate social responsibility” could be defined as “an inanimate object, created by

human beings, making moral and accountable decisions on behalf of human society.” Wait!

What? A car (inanimate object that can outlive its creators), created by workers at Ford, can

make moral and accountable decisions about human society; no. Ford Motor Company

(inanimate, no corporeal body), created by stockholders, can make moral and accountable

decisions about human society; maybe.

In People versus Corporations: A History (Anonymous, 2007), the author states that the

USA originally imposed legal measures to limit corporations and their ability “to amass wealth

and power, including limits on ownership of land, personal liability of shareholders for the

corporation’s debts; and the right to withdraw a charter if the corporation failed to serve the

public interest” (emphasis added, p. 12). However, a US Supreme Court decision, based on the

14th

Amendment in 1868, supposedly, declared that a corporation was equal to a ‘natural born’

person (Anonymous, 2007)1. Therefore, under this ruling, a corporation (as an “individual”) can

make a moral decision and be held accountable for its decisions regarding social issues. Further

on, the author states that the idea of “corporate responsibility” emerged between the two world

1 Some authors/academics believe that the US Supreme Court did not make this decision. They believe the

generally accepted “decision” was the court clerk’s interpretation of the decision. See http://money.howstuffworks.com/corporation-person1.htm

CORPORATE SOCIAL RESPONSIBILITY 4

wars (Anonymous, 2007, p. 12) and then the axe dropped. Milton Friedman, the father of

‘neoliberalism’ (Anonymous, 2007) or the originator of “The World’s Dumbest Idea” (Denning,

2013), declared that business’s only “social responsibility” was to increase profits (Friedman,

1970).

Friedman dismisses the “legal fiction” of corporations as artificial persons in his article,

as he is talking about the arena of “business” where corporations and companies compete (1970,

p. 173). Friedman states that “Only people can have responsibilities … a corporate executive is

an employee … [who] has direct responsibility to his employers … to make as much money as

possible …” (1970, p. 173). Individuals may feel “social responsibility” and feel impelled to

donate time or money to causes s/he feels is worthy (Friedman, 1970, p. 174). But a

businessperson has no right to “tax” customers, employees or the stockholders (Friedman, 1970,

p. 174) and then unilaterally decide where this money will be spent (Friedman, 1970, p. 175).

Even if a businessperson stepped into the public-sector to impose and spend taxes on “social

responsibilities,” the businessperson is not an expert on how to contribute to “fighting inflation”

as a social good (Friedman, 1970, p. 175). Friedman does provide a hypothetical situation that

some would call “socially responsible business” and others would call “justified [expenditures]

in [the business’s] own self-interest” (1970, p. 177). However, the observed result of Friedman’s

1970 article was businesses’ pursuit of maximising stockholder share-value, which appears to

have ignored “any concerns for employees, customers or society” (Denning, 2013).

While the New Internationalist states that CSR has not silenced dissent and that the

“ruthless moneymaking machine will not endure in its current form” (Anonymous, 2007, p. 13),

leading magazines such as Forbes (Denning, 2013) and Macleans (macleans.ca, 2014), present a

compelling argument that CSR, with its attendant change in business attitudes and ethics, is

CORPORATE SOCIAL RESPONSIBILITY 5

coming of age and is making a difference in civil society. Many of the examples in the

Macleans’ (2014) list are wholly environmental: reduction of CO2 emissions; restoration of

wildlife habitat; and, rooftop solar panels for retail shops. Yet, the Macleans (2014) list shows

that other “social” goals have been met: Loblaw signing the Bangladesh accord on fire and

safety; Talisman Energy’s “publish what you pay,” especially to governments in high-risk

countries; and, 3M conducting environmental and energy impacts across its whole supply chain.

In many ways, CSR is the embodiment of the call to create and teach business ethics to the next

generation of business leaders (Ryval, 2008).

Within the Canadian government CSR is explicitly explained within the Department of

Foreign Affairs, Trade and Development Canada (DFATD) literature. DFATD describes CSR as

“the voluntary activities undertaken by a company to operate in an economic, social and

environmentally sustainable manner” (Foreign Affairs, Trade and Development Canada, 2014).

Canada’s embassies and missions abroad assist Canadian business “through conferences,

workshops and other activities involving [the] companies, representatives of host governments,

and [local] civil society” (Foreign Affairs, Trade and Development Canada, 2014). Some of the

more specific areas covered by DFATD are: anti-corruption and –bribery; transparency (see

Talisman Energy, Macleans 2014 above); conflict-sensitive business practices; conflict minerals;

and, due diligence in retail garments (see Loblaw, Macleans 2014 above).

Domestically, Industry Canada (IC) has an Industrial and Regional Benefits Policy (IRB)

(Industry Canada, 2014) that is used for large federal projects. In essence, Company A wins a

$200 million contract from Canada, thus Company A is legally required to spend $200 million

on goods and services in/on/within Canada (Industry Canada, 2014). For example, Irving

Shipbuilding and Seaspan (Vancouver Yard) are required under their contract with the National

CORPORATE SOCIAL RESPONSIBILITY 6

Shipbuilding Procurement Strategy (NSPS) to spend an amount equal to 100% of their contract

within Canada, or on approved “Global Value Chains” (PWGSC, 2014). As well, both shipyards

are looking at innovative and social means of meeting IRB “indirect” commitments. Seaspan is

looking at endowing a chair at UBC to bring “Naval Architecture” back to Canada2; Irving is

running an apprenticeship program for chronically unemployed Mi'kmaq youth, with guaranteed

employment at the end of program3. Though not explicitly termed CSR the IRB policy is

assisting Canadian businesses in learning about and participating in a form of CSR, to the benefit

of all Canadians.

As can be seen, CSR has many definitions and can be interpreted in numerous ways.

Corporations and businesses are collections of people gathered together for a reason. As such,

they are living, breathing, thinking organisms that need to reflect on where their “line in the

sand” is; the line (value, ethic) they will not cross in the pursuit of “maximising shareholder

value”. It may be of use for Canadian corporations and businesses to read the Tait Report (2000)

and Jocelyne Bourgon’s (2007) paper to better understand that conflicts between values will

arise and that it is normal.

Should CSR be mandated for Canadian business?

According to GlobalIssues.org Canada is currently ranked number ten out of 108

countries surveyed for CSR; ahead of Germany (11), the Netherlands (12), and the United States

(18). Paul Tsaparis’ (then head of Hewlett-Packard Canada) has asserted that only a

“comprehensive adoption of CSR” would be best for Canada’s global competitiveness (Foster,

2005, FP23); while Peter Foster believes that “lower[ing] taxes, increas[ing] R&D or

2 Seaspan website: http://www.seaspan.com/

3 Irving website: http://www.irvingshipbuilding.com/irving-shipbuilding-home.aspx

CORPORATE SOCIAL RESPONSIBILITY 7

improv[ing] education” would be best (Foster, 2005, FP23). The question then is: Should Canada

create a comprehensive list of CSR behaviours and then dictate this list to Canadian corporations

and businesses, under threat of legal penalties?

In looking at the myriad of areas that are considered laudable in the previous section, the

number of hours and the amount of work that would be required on Canada’s part to create a

“comprehensive CSR” policy is staggering. Is a comprehensive list of “acceptable” behaviours

and issues even possible? How could one person, one department or even one consultancy firm

explore every possible behaviour or action that could contribute to CSR? Furthermore, any

legislation would not be flexible enough to meet new or emerging areas of “need,” or take into

account evolving technology that may/not be CSR “friendly”.

The Porritt and Fauset debate in New Internationalist (2007) raises some questions about

regulating CSR. In essence, the debate is between a “government stooge” and an “anti-corporate

idealist” (Porritt & Fauset, 2007). Porritt believes that on-going dialogue between government,

corporations and the people will bring about change, eventually (Porritt & Fauset, 2007). Fauset

is mistrustful of both government and corporations, but that an acceptable start would be total

government regulation of corporate responsibility (Porritt & Fauset, 2007). While many of the

concepts discussed by Fauset are “socially responsible,” she does not provide practicable

suggestions. Throughout the debate Porritt (2007) suggests that as “the people” have voted in

government officials (p. 15), who can introduce market-mechanisms with “teeth” (p. 14) and

market instruments that affect the better-off people and not the less well-off (p. 14), if the

government wanted to. Hence, Porritt does not believe society should dismantle the current

system in search of Fauset’s “just world” (Porritt & Fauset, 2007, p. 16). Porritt believes that

working within and without an organization is the best way to advocate/force change (Porritt &

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Fauset, 2007, p. 15), because an organization, “cannot work in societies that are imploding”

because “the interests of corporations [and governments] must converge eventually” with those

of society because the organization is made up of people who live in that society (Porritt &

Fauset, 2007, p. 16). The debate covered many areas that within the milieu of CSR, but in the

end Porritt and Fauset could not agree on a first step.

It is difficult to answer the question of whether or not Canada should impose a list of

legally actionable CSR behaviours and possible priorities on corporate Canada. This topic is a

“hot button” for many people, based on their own personal values and ethics; which may be the

problem. People would normally rebel at a government mandating individual ethics, yet some,

like Fauset (Porritt & Fauset, 2007), believe that the government should legislate the ethical

behaviour of a group of people, when in the form of a corporation. The current DFATD CSR is a

set of guidelines, best-practices, and advice on how Canadian business can best do business

overseas. Each case is looked at on an individual basis to determine if the company is observing,

as best as possible, the suggestions. There is one area that is legally actionable; anti-corruption

and anti-bribery under the Corruption of Foreign Public Officials Act (Foreign Affairs, Trade

and Development Canada, 2014). Under the IRB policy of IC (Industry Canada, 2014) Canadian

business is legally responsible for meeting the requirements of the federal contract; but again in

assessing the indirect benefits, each case is looked at separately and in context of the local area. I

do not believe that a comprehensive CSR act should be legislated and forced on Canadian

businesses. It is too broad an area to be contained within one act. I believe that the legislation

currently in effect is “good enough” for now; but that on-going discussion between the public-,

private-, and voluntary-sectors needs to continue working on a concordance on how each sector

CORPORATE SOCIAL RESPONSIBILITY 9

can contribute to a “Canadian Social Responsibility”, for Canadians and other citizens of the

world.

Relationships amongst the sectors: Who’s who?

As can been seen from the previous two sections, it is difficult to have a specific

definition of CSR, acceptable to all, and that it would be difficult to legislate a “comprehensive”

CSR Act. All of the actors in civil society have now been introduced, but a closer look at whom

or what they are and how they interact with each other is required. One way of looking at the

actors is thusly: the public-sector, i.e. the government, cold, heartless, “the man” who forces you

to pay exorbitant taxes while giving businesses tax breaks, out-of-touch with the “common

man”; the private-sector, i.e. corporations, ruthless, money-grubbing, immoral psychopaths who

just want to rape the people’s pocket while destroying the natural world; and, the voluntary-

sector, i.e. the people, the pure-of-heart, who valiantly try to help each other in their dis-

empowered society, longing for the day when “revolution” will raise them up. As stated, this is

just one way of looking at the actors in civil society. Equally absurd characterisations, with the

private- and public-sectors as the down-trodden, could be fashioned.

However, the days of easy description between groups has long passed. The picture today

is a bit-more and a bit-less complicated than the absolutes that are craved by idealists. Civil

society is comprised of three sectors: public, private and voluntary. For many people this evokes

an image of a pie seen from above; a circle with three cuts, discretely dividing the sectors. This

picture is one of absolutism; a person can only belong to one sector because s/he is cut off from

the others, and many people believe in this picture. Nonetheless, with Canadians’ favourite pie

CORPORATE SOCIAL RESPONSIBILITY 10

being apple4, the absolutist belief in non-crossover or non-contamination is negated when the pie

is looked at from the side. After a pie is cut the filling tries to rejoin and re-merge with the other

pieces of the pie (or sector). As a piece of pie (or a sector) is removed from the territorial

boundary of the pie plate (or nation) one can see the filling tries to fill the void. Pieces of apple,

in this analogy, cannot seem to decide which side of the absolutists’ cut line they should be on;

causing some pieces to stay connected in the pie plate and other pieces being removed from pie.

But, people are not pieces of apple, blueberries, Saskatoon berries, or even strawberries.

Yet like a pie filling, people do not stay within one sector or piece of pie. This apple

piece (public sector employee) shared brown sugar (or faith) with that piece (private sector

employee), but shared cinnamon (animal rights advocacy) with that piece (volunteer at local

animal shelter). Every human organization in the world is comprised of human beings. People

voluntarily choose which organization and actions they wish to be a part of, whether it is a

government, private corporation, advocacy group or family. People choose, every day, which

actions and organizations are worthy of their time, thought, and money. Within the confines of

an absolutist’s view, a government worker can never be “truly” altruistic; a corporate employee

will always do what is best for the company to make more money; and, a volunteer may always

be a bleeding-heart. But the reality of civil society is not so clear.

According to Phillips and Graham (2000) the lines are blurring between the three

sectors. Hence, attempting to answer the question of whether or not relationships between the

sectors have changed under the banner of CSR is very difficult to answer. In many ways CSR is

a marketing-tool to enhance corporate images (Porritt & Fauset, 2007), but it also lends

legitimacy to corporations who enter into partnerships, with the other sectors, to tackle social

4 See http://www.bakersjournal.com/news/tenderflake-survey-reveals-canadas-favourite-pies-3862

CORPORATE SOCIAL RESPONSIBILITY 11

issues: education, gender issues, health, security, justice and human rights. Relationships

between the sectors have improved, by some measures, under the banner of CSR (Porritt &

Fauset, 2007). Yet, relationships have improved as governments have moved to a post-

bureaucratic model (Kernaghan, Marson, & Borins, 2000). Further, relationships have improved

as voluntary organizations realize that they cannot go it alone and need the assistance/expertise

of the other sectors (Phillips & Graham, 2000). But, to answer the question; relationships

between the sectors have changed, mainly for the better, under the banner of CSR.

Public policy or private concern?

As seen in the previous sections, CSR has a “fuzzy” definition; some government

regulation may be needed in certain areas of CSR; the actors refuse to stay within their discrete

sectorial limits; and, that relationships between sectors have improved under CSR. So the

question remains of whether or not CSR should be a public policy and advocacy area or if it

should remain solely a private concern.

The answer is both. A private company has the right to follow whatever private practices

it wishes to follow, as long as it does not violate accepted societal norms (laws emplaced by

legislation that society has deemed worthwhile) (Friedman, 1970). Nevertheless, a private

company is made up of people who are working for a common cause and believe in the values

and ethics displayed by the organization (Bourgon, 2007; Tait, 2000); and if the people do not

agree with those values and ethics they leave the company or try to change it. As shared-values

statements (Panel on Accountability and Governance in the Voluntary Sector, 1999) and ethical

business practices (Ryval, 2008) are becoming more transparent and prevalent in the private-

CORPORATE SOCIAL RESPONSIBILITY 12

sector, the public-at-large is taking note of what companies stand for and are holding them

accountable through the consumer dollar (Porritt & Fauset, 2007).

As our apple pieces of society cannot be easily separated, it is difficult to separate public

policy & advocacy, and private concern. Public policy is just that; public. Citizens, including

private corporation employees, vote for a government members to direct public administrators to

create public policies. The employees, shareholders, and managers of a private corporation have

the capacity to follow public policies, as an individual voluntary action. However, public policies

and advocacy issues are wide-ranging and it would be simplistic to think that every private-

sector company could meet every public policy or advocacy issue, every day. As citizens decide

everyday which laws they will or will not follow (murder and speeding, to name extremes),

corporate “citizens” (corporations) should be allowed to decide which public policies (no force

of law) or advocacy issues they wish to support. As with everything else in life, there must be a

balance between those things that are “good” and “bad.” The difficulty is that each situation is

unique and what is “good” today may be deemed “bad” tomorrow. As stated earlier, private

corporations, through their boards, must take the time and have forethought to decide where the

ethical “line in the sand” is.

Conclusion

Definitions of CSR are ambiguous, dependent upon time and situation. Government

regulation may be required within certain specific areas governed by CSR such as corruption and

bribery of foreign officials. Relationships between civil society actors within the three sectors

have improved. The public and advocacy groups are demanding corporate accountability

CORPORATE SOCIAL RESPONSIBILITY 13

regarding company CSR policies. Consequently, can CSR be deemed a tangible item or is it

directed self-interest on the part of corporate Canada?

I believe it can be both. “Corporate Social Responsibility” can lead to the creation of

shared-values statements within an individual corporation that can then be used to hold that

company accountable for its decisions and actions. But those decisions and actions will be in the

best interest of the corporation, within the ethical framework they have decided on in their

shared-values statements. But values and ethics within corporations are bound to have as many

divisions as individual ethics: meta-ethics, normative ethics, virtue ethics, hedonism, stoicism to

name a few. It may be of use for corporate Canada to contact some of the world’s oldest

companies to find out the “secret” of company longevity: Nisiyama Onsen Keiunkan (hotel)

founded 705; Stiftskeller St. Peter (brewery) founded 803; or, the Shore Porters Society founded

14985. Corporate social responsibility is a tangible item, specific to each company, that can be

used in the “directed self-interest” decision-making of the company and the society it works in.

5 Bank of Korea report 2008. Partial listing can be found at http://www.businessinsider.com/oldest-companies-on-

earth-2014-8

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References

Anonymous. (2007, December). People versus corporations: A history. New Internationalist,

407, 12-13.

Bourgon, J. (2007). Responsive, responsible and respected government: Towards a new public

administration theory. International Review of Administrative Sciences, 73(1), 7-26.

doi:10.1177/0020852307075686

Denning, S. (2013, June 26). The origin of 'the world's dumbest idea': Milton Friedman.

Forbes.Com, 2015

Foreign Affairs, Trade and Development Canada. (2014). Corporate social responsibility.

Retrieved May 30, 2015, from http://www.international.gc.ca/trade-agreements-accords-

commerciaux/topics-domaines/other-autre/csr-rse.aspx?lang=eng

Foster, P. (2005, April 27). Why do CEOs sign on to CSR? National Post [National Edition], pp.

FP23.

Friedman, M. (1970, September 13). The social responsibility of business is to increase its

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Toronto: The Institute of Public Administration of Canada.

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