Harvard Study Bodes Ill for Corporate Social Responsibility

February 6, 2012; Source: Triple Pundit | For all of the corporate sector’s hoopla regarding metrics showing increasing corporate social responsibility, one critical component seems to be on the wane: corporate responsibility to local communities. The decline in this kind of social responsibility is seen via corporate willingness to pack up their business operations in American cities and towns and move manufacturing or processing overseas. According to a study designed by Harvard Business School’s Michael Porter, two-thirds of American businesses want or plan to move their facilities out of the U.S. Just over one-fifth of U.S. businesses think that a business doing good for its communities translates to doing well for the bottom line. 

Porter is the competitive strategy theorist known in nonprofit circles for his co-founding role in the Foundation Strategies Group (now FSG-Social Impact Advisors), the Center for Effective Philanthropy, the Monitor Group, and the Initiative for a Competitive Inner City, as well as his co-authorship (with Mark Kramer) of iconic articles such as “Philanthropy’s New Agenda: Creating Value” (1999), “The Competitive Advantage of Corporate Philanthropy” (2002), and most recently, “The Big Idea: Creating Shared Value” (2011). Porter has long been a critic of the ad hoc and non-strategic uses of corporate social responsibility (for which Porter prefers the terminology “shared value”). The study seems to imply that corporate leaders may not necessarily follow the prescription of doing well by doing good.

Has the nation’s corporate sector moved into a dark alley of talking about social responsibility more so than practicing it? Or are corporations sensing a new recessionary attitude from consumers—or investors—pushing them to focus more than ever on corporate profitability over corporate citizenship? Or has the nature of the world changed, as the Triple Pundit author suggests, such that the competitive posture of state capitalism in China has induced corporations to redefine the communities that they serve to be the communities in which they have offices and plants? —Rick Cohen