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The CSR Debate

In his recent column in The Financial Times, Stefan Stern implied that it is okay for businesses to

In his recent column in The Financial Times, Stefan Stern implied that it is okay for businesses to employ child laborers and pursue environmentally unsustainable activities so long as it is within the law and it is in the interests of being competitive. He seems to also invoke the words of Sir Terry Leahy, chief executive of Tesco (the UK’s leading retailer) as implying Sir Terry would be in agreement.

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Having been a product manager with a clear set of P&L objectives in previous roles, I am fully aware of the business imperatives of cash and profit. However, I do not see the mismatch that Stefan observes between CSR and what managers have to do every day of the week. As I see it, every CSR initiative should have a clear and commercially compelling objective, whether it is employee retention, risk mitigation, customer loyalty, cost reduction or others. Additionally, every manager should be worrying not only about today’s profit but about tomorrows and next year’s profit too. Using up a resource faster than it is being replenished might deliver short term returns, but will compromise tomorrow’s business.

That isn’t to say that there isn’t sometimes a short term disadvantage when one company acts responsibly and its competitors act irresponsibly. I recall a negotiating game from my early training in management that demonstrated that if individual parties work together for the common good then all end up better off. But if either tries to undermine the other’s trust to gain at the other’s expense, both end up worse off. In the CSR world that is where leadership and common standards come in.

Contrary to Stefan’s views, I think our current recession demonstrates we need to be thinking more rather than less about the longer term implications of our decisions in the business world. To characterize CSR as do-gooders and “babies, dolphins and forest” is a disservice to the debate and will ultimately lead us to the lowest common denominator