Sociology Compass 2/6 (2009): 1–12, 10.1111/j.1751-9020.2009.00250.x 1 2 3 4 Updating the Critical Perspective on Corporate Social 5 6 Responsibility 7 Gerard Hanlon* and Prof Peter Fleming 8 University of London 9 10 11 12 Abstract 13 This paper argues that Corporate Social Responsibility (CSR) is a key element of the new neo- 14 liberalism as it searches for both legitimacy and new sources of innovation. Rather than simply being a fraud or a drain on resources as CSR is often portrayed, we argue that it is one of a 15 suite of practices that corporations are deploying as they seek to shift the nature of social regula- 16 tion away from collective to more individual solutions. While the criticism that CSR is corpo- 17 rate propaganda has purchase, we explore a deeper development. This development is one CE: Shantha 18 wherein as the old ways of capitalist regulation were surpassed in the 1970s and 1980s new 19 social practices such as CSR, Human Resource Management, ethical marketing etc. were 20 deployed as a way of engineering new forms of identity, new expectations of individuals and 21 institutions and new sources of legitimacy and social value. Social criticism needs to take this 22 development more seriously (than the propaganda view) since it frames CSR as a predatory 23 facet of this new neo-liberalist tendency. 24 25 Toc heading: OW No. of pages: 12 PE: Pushpa Dispatch: 17.8.09 Journal: SOC4 26 Updating the critical perspective on corporate social responsibility 27 28 In this paper, we extend the critical perspective on CSR by examining how the contem- B 29 porary corporate practice of CSR reflects shifts in the nature of late capitalism. We pro- 30 vide this examination of CSR for two reasons. One, unlike many of the authors writing 31 about CSR (see for example, the recent Harvard Business Review 2003, Matten et al., 32 12007) we wish to examine CSR as a socio-economic phenomenon rather than simply as a business or management issue. Two, we also see CSR as one part of a broad, differenti- 33 250 34 ated but related change, wherein corporations are increasingly appropriating social life 35 and using arguments about self-actualization, social responsibility, and ethical behavior to 36 legitimate their activities. We also suggest that CSR must be considered critically as more 37 than propaganda; instead, in our view, the critical perspective on CSR must now inte- 38 grate how CSR is a predatory form of extending corporate power under late capitalism. 39 40 Introduction 41 42 Almost every large corporation in western economies now makes some effort to indicate how they are committed to communities that ostensibly lie beyond basic business objec- Journal Name Manuscript No. 43 SOC4 44 tives (i.e., making profits). One need only take a cursory glance at the websites of large 45 multinationals such as British Petroleum, Shell, British American Tobacco and BT to 46 notice that firms in many industries and sectors create much fanfare around their corpo- 47 rate responsibility initiatives. Indeed, what has come to be called Corporate Social 48 Responsibility (or CSR) is now a key marketing and branding reference point for most 49 large and medium sized corporations. ª 2009 The Authors Journal Compilation ª 2009 Blackwell Publishing Ltd 2 Corporate Social Responsibility – A Key to the New Neo-liberalism 1 This trend extends beyond controversial industries that invest in CSR policies such as 2 those involving petroleum or tobacco products. For example, a large industry is built 3 around ethical business (with the Bodyshop and Fair Trade being early examples). This 4 industrial group claims to make profits while avoiding the exploitation of people and nat- 5 ural resources, minimizing what economists call ‘negative externalities’. Moreover, today 6 CSR is also an academic growth industry. CSR is increasingly written about in business 7 and management journals, prestigious journals such as the Journal of Business Ethics are 8 devoting more space to CSR and the UN runs a University network for responsible 9 management. 10 Given that altruistic kindness to nature, animals and other stakeholders can conflict 11 with the economic imperative to make money, there has been much discussion about 12 what exactly drives capitalist enterprises to focus on business ethics and ‘giving back’ to 13 society above and beyond minimum legal requirements. There are generally two wide- 14 spread theoretical positions to make sense of CSR given this question. The first views 15 CSR as a sincere mechanism through which corporations can balance their profit-seeking 16 behavior with the concerns of other agents or stakeholders including workers, consumers, 17 non-governmental organizations and so-forth. This is largely a pro-business understanding 18 of CSR, in which capitalism is considered redeemable via a concern with ethical con- 19 duct. The second theoretical approach is very critical of the assumption that CSR repre- 20 sents a fundamental shift in the largely brutal corporate pursuit of profits. In this study, 21 CSR is considered more of an ideological ‘smoke screen’ designed to either soften the 22 image of firms engrossed in the rampant pursuit of profit (at any cost) or a way to deflect 23 attention away from an unsavory core business model. As Roberts (2003) puts it: 24 25 My fear is that all this talk of ethics is just that – talk; new forms of corporate self-presentation 26 that have no reference to or influence on what is practiced in the name of the corporation, beyond those associated with good public relations. In this form, corporate social responsibility 27 is cheap and easy; a sort of prosthesis, readily attached to the corporate body, that repairs its 28 appearance but in no way changes its actual conduct. (Roberts 2003: 250). 29 30 For sure, the fact that British American Tobacco consistently ranks extremely well in the 31 Dow Jones Sustainability Index,’ which showcases the world’s most ethical firms, is cause 32 for cynicism. In this sense, and as Banerjee (2007) points out, CSR might be considered 33 more a public relations gimmick, or representative of some cynical ‘enlightened self-inter- 34 est,’ than a serious corporate concern with the ethical and political implications of capital- 35 ism. From the critical perspective we identified earlier, any sustained analysis of CSR 36 ought to be sympathetic to the view that CSR is a form of capitalist ideology that is 37 intended to pull the wool over people’s eyes. One only has to contrast actual actions 38 against the CSR polices of British America Tobacco, Shell and Easyjet (to name but a 39 few), and their espoused commitment to the environment and consumer health, to con- 40 firm this critical perspective. 41 In this paper we extend the critical view of CSR by examining how the contemporary 42 corporate practice of CSR reflects shifts in the nature of late capitalism. We provide this 43 examination of CSR for two reasons. One, unlike many of the authors writing about 44 CSR (see for example the recent Harvard Business Review 2003, Matten et al., 2007) we 45 wish to examine it as a socio-economic phenomenon rather than simply as a business or 46 management issue. Two, we also see CSR as one part of a broad, differentiated but 47 related change, wherein corporations are increasingly appropriating social life and using 48 arguments about self-actualization, social responsibility, ethical behavior etc. to legitimate 49 their activities. We suggest CSR must be considered as more than propaganda. In our ª 2009 The Authors Sociology Compass 2/6 (2009): 1–12, 10.1111/j.1751-9020.2009.00250.x Journal Compilation ª 2009 Blackwell Publishing Ltd Corporate Social Responsibility – A Key to the New Neo-liberalism 3 1 view, the critical perspective on CSR must now integrate how CSR is a predatory soft 2 power form of extending corporate influence in late capitalism. We argue that CSR is a 3 key element of the neo-corporate search for both legitimacy and new markets. 4 We advocate an understanding of CSR that extends beyond viewing CSR as just a 5 fraud or a drain on resources, as CSR is often portrayed. While the criticism that CSR is 6 corporate propaganda has much credence, we hope to advance the critical perspective by 7 placing CSR initiatives within the context of a changing nature of capitalism, whereby 8 new sources of legitimacy are sought outside the traditional realm of business. This devel- 9 opment is one wherein as the old ways of capitalist regulation were surpassed in the 10 1970s and 1980s and new social practices such as CSR, Human Resource Management 11 (HRM), ethical marketing etc. were deployed to engineer new forms of identity, new 12 expectations of individuals and institutions, and new sources of legitimacy and social 13 value. Social criticism needs to take this development more seriously than the propaganda 14 view, as CSR is now an important predatory arm of this neo-corporate tendency. 15 16 What is corporate social responsibility? 17 18 In some of the less wealthy areas of London, one can see a strange collection of people 19 that is almost reminiscent of a Lars Von Trier film. Indeed, one of the authors came 20 across such a tragic-comedy gathering a few months ago in East London. A group of 21 smiling young men and women dressed in uniform t-shirts were leading another group 22 of decidedly anxious blind people down a street in which the encroaching business dis- 23 trict was hastening the gentrification process of East London.