Saturday, 6 February 2010

Is Corporate Social Responsibility Window Dressing?

This post is part of an argument that is 'for' the following statement:

"CSR is nothing more than window dressing and business should focus on making money."

There are many critics arguing for and against CSR, many believe that CSR distracts from the fundamental economic role of businesses; that it is nothing more than superficial window-dressing.

To take the example of simple corporate philanthropy, when corporations make donations to charity they are giving away their shareholders’ money, which they can only do if they see potential profit in it.

This may be because they want to improve their image by associating themselves with a cause, and use a cheap way of advertising, or to contradict the claims of pressure groups, but there is always an underlying financial motive, so the company benefits more than the charity.

According to David Henderson (2001) CSR is criticised as being a PR stunt, bearing in mind that most CSR workers in companies sit in the communications and PR departments, and considering that the strategies of CSR - dialogue with NGOs, codes of conduct, social reports - were all designed and developed by PR companies such as Hill and Knowlton.

CSR helps to greenwash the company's image, to cover up negative impacts by giving the media positive images of the company's CSR credentials. As Deborah Doane points out in 'From Red Tape to Road Signs', CSR enables business to claim progress despite the lack of evidence of provable change.

What does all that implies? CSR is pure window-dressing.

Milton Friedman famously argued that the ‘business of business is business’, the sole responsibility of the organisation are its shareholders, and providing profits for them. He acknowledged legal and ethical constraints on business activity, emphasising that the organisation should not harm society.

Corporations should obey the laws of the countries within which they work; other than that corporations have no other obligation to society.

Follow government regulations and avoid CSR.

CSR is seen as catering to public relational purposes. Corporate responsibility is used as conventional public relations with the aim of distracting society.

Instead of focusing on CSR corporations should focus on making money. The increase of profits in a company benefits the economy, which benefits the citizens of that economy. ‘The Social Responsibility of Business is to Increase its Profits.’

Big companies move their production to places like china and then “they don’t pollute”. 40% is caused by Europe and Americas export. Covering up negativity, in many cases simply reinforces the criticism that CSR is nothing more than a PR exercise.

Shell has a much-publicised CSR policy and was a pioneer in triple bottom line reporting, but this did not prevent the 2004 scandal concerning its misreporting of oil reserves, which seriously damaged its reputation and led to charges of hypocrisy. In Africa the communities where Shell operates they are still waiting for schools and hospitals.

In our media saturated culture, companies are looking for ever more innovative ways to get across their message, and CSR offers many potential ways of doing so.

The dream that socially responsible corporations can transform our society is an illusion.

SCR is nothing more than window-dressing!


David Henderson (2001). Misguided Virtue, False Notions of Corporate Social Responsibility.

Deborah Doane. From Red Tape to Road Signs

Milton Friedman (1970). The Social Responsibility of Business is to Increase its Profits.


  1. Mr Friedman strikes again. I wonder if he is as fed up as most CSR advocates?

    Whilst it is unfortunately true that too many CSR activities eminate from marketing silos, it is also true that enlightened CSR is a effective tool for adding value when applied strategically.

    You imply that all businesses should focus on making a profit, therefore alluding to constant economic growth by all, which in itself is unsustainable.

    By rightfully picking on bad guys like Shell you are ignoring countless great work offered by others such as Interface, Timberland, Patagonia, Starbucks etc - all companies with strong profit motives but balancing their social & environmental impacts better than most, and enhancing their ability to generate efficient profit.

    Your same argument can be applied to marketing but I can't see that going anywhere soon?

  2. Also, don't confuse corporate philanthroy with the wider issue of CSR. A company embodying a holistic approach to CSR recognises that there are long term economic benifits to managing social issues relevant to their company as opposed to focusing on short and mid term profitability. I agree with David, there are plenty of good examples of joined up thinking that could have been quoted here. For example, a major brewer that we have been working for recently has a strong policy of water management, both in the pre and post supply chain. In the immediate term this is costing them, but in the areas they work in, there is a recognition that careful water management has benifits both to the local community (and hence to their reputation and ease of working in n the locality) but also to longer term efficiency of their processing plants.

    There has to be some measurable economic benifit for a company to fully engage with an active CSR programme, but to merely denigrate this to a PR relayed process is to miss the wider impact of a properly researched and integrated approach to social and community integration.

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