Corporate Social Responsibility: The Good, the Bad and the Ugly

Corporate Social
Responsibility:
The Good, the
Bad and the Ugly
Presentation on the Paper by
Subhabrata Bobby Banerjee

Presented By
Samuel Ellis, Adrian Erlenbach, Alina
Grigore and Cindy Heeralal

Wednesday, May 9, 2012

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PAPER OVERVIEW

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CRITICISMS

Critiques the limits of
Critiques the limits of functionalism
functionalism
Stakeholder theory as a
Stakeholder theory as a form of colonialism BANERJEE (2008)
form of colonialism Provides an alterna-
tive perspective
Power relationship between cor-
porations and goverments Power relationship between cor-
porations and goverments
Provides an alterna- CONTRIBUTIONS
tive perspective
Next Stop: Criticisms

Next Stop: Position in
Existing Literature EXISTING LITERATURE


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PAPER OVERVIEW
er po
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1. Paper overview

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C t tai
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US Corporate Law, CSR Rhetoric and Market
Ideology
✤ Banerjee observes that the “legal revolution that gave
birth to the modern corporation essentially removed all
major restrictions around corporate activity and rules of
incorporation” (2008, p.54). Led to a situation where
“there was now no “ofﬁcial” requirement to serve the
public interest except in the economic relm” (2008, p.54).

✤ Dartmouth College V Woodward 1819 where
corporations received property rights as a deﬁning step
of “conferring private rights on corporations, rights
normally held by individuals” (2008, p.55).

✤ “If the legal revolution that launched the modern
corporation was one that served particular interests, the
same could be said of the current rhetoric in corporate
boardrooms about “CSR”” (2008, p.59).


Limitations of CSR
✤ Win Win scenarios of CSR are very
limited.

✤ Normative Assumptions of Corporate
Citizenship are “simplistic assumptions
with little theoretical or empirical
support” (2008, p.62).

✤ “Lack of critical examination in the
literature” (2008, p.63)

✤ Greenwashing.

✤ Companies stop empowering their
stakeholders when their proﬁt interest
diverges with that of the local community.


Corporate Hijack of Sustainable
Development
• (Shiva, 1991 in Banerjee, 2008, p.65)
“Rather than reshaping the markets and
production processes to ﬁt the logic of
nature, sustainable development uses
the logic of markets ad capitalist
accumulation to determine the future of
nature”.

• “The language of capital is quite
apparent in discourses of sustainable
development.” (Banerjee, 2008, p.65).

• No criticism of this fact and the failings
of the market to be able to predict true
costs.


Foucault’s, “Discourse power/knowledge
nexus” and “Governmentality”
✤ “the circulation of power produces a power/knowledge nexus where the
effect of power relations on society is dependent on the production of
discourses of truth through the production of knowledge” (Clifford 2001
in Banerjee, 2008,p.67).
✤ E.g. The presence of science and scientiﬁc methods in our everyday
discourse. How did it get there? Through a process of normalization via
disciplinary power involving a complex system of institutions, regulations,
texts, policies and practices.
✤ Could the same be said of capitalism?
✤ Governmentality = “what practices, mechanisms and institutions are
needed for an individual and for societies to be governed” (2008, p.68)
✤ A way of doing this was using the economy.


Market Fundamentalism in governance and
Anti- Democratic Development

✤ “Market fundamentalism
deﬁnes the parameters of
democracy” (2008, p.70).

✤ “Development sustainable or
otherwise, in a globalizing
world is inherently anti-
democratic as several
indigenous groups have
found” (2008, p.70).

✤ “Despite all the strident rhetoric
about the “stakeholder
corporation”


2. Contributions to Management
Critiques the lim
Critiques the limits of functionalism
functionalism
Stakeho
Stakeholder theory as a form of
form of colonialism


Provides an alterna- CONTRIBUTIONS
tive perspective

Next Stop: Position in
Existing Literature


Contributions: the 4 Points for Managers
✤ Critiques the “limited” (2008, p.61)
functionalism paradigm.

✤ Argues that stakeholder theory is a
form of “stakeholder colonialism” (p.
51)

✤ Highlights the complex power
relationship between corporations,
governments and international
institutions.

✤ Provides an alternative perspective:
discourses of CSR as ideological
movements that legitimize the
power of large corporations.


The Lose-Lose Scenario
✤ CSR just serves “narrow business
interests“ (p. 52) and discourses of
CSR “legitimise and consolidate the
power of large corporations” (p.51)

✤ The way CSR is used now doesn’t
beneﬁt neither the society nor the
companies (criticism of the win-win
scenarios)

✤ Society: the social good is no
longer a priority – it is now provided
by the economic function

✤ Corporations: CSR neither offers
competitive advantage nor
improves the company’s ﬁnancial
performance

Lost voices

✤ “Stakeholder relations are
systematized and controlled by
the imperatives of capital
accumulation” (2008, p. 73)

✤ They create value only for
certain people and
institutions

✤ “Stakeholder colonialism “ –
“stakeholders who do not
toe the corporate line are
either co opted or
marginalized” (2008, p.72)


“Free markets first and democracy would
follow” (p. 69)
✤ There is a need to question the rhetoric of democratic values
✤ Democracy takes a back seat to corporate interests:
✤ Democracy conveniently forgotten:
✤ “national governments are increasingly employing neoliberal agendas
that have adverse impacts on their livelihoods” (p. 71)
✤ Corporations don’t have the ability to take over the role of governments
in contributing to social welfare.


Starting point for a solution
✤ “Some kind of universal charter that
corporations are accountable to rather
than voluntary codes of conduct” (p. 74)

✤ Genuine change (p. 75)

✤ Scholars need to subvert the managerial
thinking

✤ Restoring a sense of social justice and
equity

✤ New questions need to be asked – from a
different, often oppositional perspective
(p. 74)


3. Position within existing literature
CRITICISMS

he limits of functionalism
ctionalism
Stakeholder theory as a
eory as a form of colonialism BANERJEE (20
nialism
Provides an alterna-
tive perspective

CONTRIBUTIONS

Next Stop: Criticisms

EXISTING LITERATURE


Position within existing literature


Position within existing literature
✤ Radical and critical of functionalist approach -
Banerjee critiques the interplay between
Business and Society which follows a
business centric approach

✤ Similarly, Gond & Matten (2007 p5) state
“CSR literature has never overcome a narrow,
business-centric perspective”

✤ A reorientation of current management
practice towards a more critical approach
based on ideology critique

✤ “….the inclusion of more diverse values within
decision practices to beneﬁt the wider
public....” (Kuhn & Deetz 2008 p174)

✤ CSR seen as a power relationship “…CSR
becomes an ideological movement designed
to consolidate the power of large
corporations” (2008 p. 59)


Position in relation to existing debates
✤ Constructivist view of CSR
✤ CSR as a “negotiated order” (Gond & Matten cite) between business and society and a
process of social construction where content is defined by all actors (Latour 2005 in
Gond & Matten cite)
✤ CSR as a power relationship
✤ Stakeholder colonialism - unequal power relations.
✤ Tatz (1982, in Banerjee 2008) describes the process as communities “talked to” about
decisions “arrived at”.
✤ The nature and type of profit seeking organizations determines the societal costs borne
and the power and freedom organizations will possess (Perrow 2002 in Banerjee2008)

…as opposed to…

✤ Functionalist CSR/ CMS
✤ Management theory teaches that the corporation is capable of resolving all social
conflict “fairly and justly” within its walls (Frank 2001:143 in Banerjee 2008)


Contributions to Future Research
✤ Banerjee’s book ‘The Good, The Bad and The Ugly’ 2008 reviewed by
Calton (2010 p363) as ‘an antidote to sloppy thinking and overreaching
claims about a new, brave CSR world’.

✤ Re-framing of CSR and the role of the Corporation in society and its
existing business practices: Banerjee’s focus on the bad and ugly CSR
illustrates that good CSR is often inhibited in the present practices of
organizations for social change

✤ Critical model of Stakeholder inclusion and communication

✤ “The logic is not one of containing stakeholder interests but trying to
accomplish them through corporate activity” Kuhn & Deetz (2008 p186)

✤ Non-managerial/ functionalist approach to CSR contributing to more
critical approach to management studies


Th se o
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CRITICISMS
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4. Criticisms of Banerjee (2008)

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Criticism 1: Too Quick to Dismiss Valid CSR
Theories
✤ Stakeholder theory
✤ Banerjee critiques the stakeholder
view of the ﬁrm as a form of
colonialism “that serves to regulate
the behavior of stakeholders” (p. 72)
✤ However, Banerjee's critique fails to
acknowledge that:
✤ Stakeholder empowerment is a two-
way street.
✤ Business and stakeholder interests
are increasingly aligned
✤ Positive examples of stakeholder
inﬂuence exist (ex. Shell, social
media)


Criticism 1: Too Quick to Dismiss Valid CSR
Theories
✤ Sustainable Development
✤ Banerjee critiques Sustainable Development for its emphasis on
traditional capitalistic notions (i.e. triple bottom line), and for its history
of being ‘hijacked’ by corporate interests.
✤ However, we ﬁnd SD’s capitalistic perspective to be among its strengths
✤ Provides a business case for sustainability that is compatible with the
corporate mindset
✤ Incorporating externalities (i.e. carbon emissions) into the current
economic system
✤ Misuse of SD by corporations does not justify dismissing the theory
altogether
✤ Companies frequently latch onto and manipulate ‘trendy’ movements
(ex. ‘diversity’, ‘innovation’). This does not mean the ideas being
manipulated are without merit and should be discarded.


Criticism 2: Bad and Ugly, But What About
Good?

✤ Banerjee denies the possibility that corporations can contribute to social
welfare. However, we ﬁnd this assumption counterproductive for The
following reasons:
✤ Despite lacking suitability, corporations increasingly have to adopt roles
traditionally reserved for governments that create social value, so totally
dismissing their ability to create social good is not helpful for improving
the status quo.
✤ Even though they are largely to blame for the current social,
environmental and economic crises, corporations are a necessary
mechanisms for bringing about positive change.
✤ Ex: Walmart
✤ Banerjee’s call for management research to adopt “different, often
oppositional perspectives” (p. 74) may alienate the academic
community from the establishments they are hoping to remedy.


Criticism 3: Heavy on Complaining, Light on
Solutions
✤ Banerjee’s highly negative critique of the current state of CSR fails to
focus adequately on solutions, providing just a few paragraphs, mainly
focusing on academic research at the expense of actual prescriptions for
action for managers.

✤ Banerjee's solution: critical view of companies' ability to address csr--
>places the brunt of responsibility for implementing CSR into the hands of
regulators

✤ This is unlikely to work:

✤ As banerjee has emphasized, gov’ts are notoriously pro-business

✤ typical reasons that governments can’t effectively enforce CSR (MNCs,
less efﬁcient that the marketplace, etc.)

✤ “Substituting one narrative for its total opposite does not enhance our


References

✤ Banerjee, S. B. (2008). ‘Corporate Social Responsibility: The Good, the
Bad and the Ugly’, Critical Sociology, Vol. 34(1): 51-79.


Corporate Social Responsibility: The Good, the Bad and the Ugly

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