Business Guru, Jack Welch steadfastly held that the purpose of a
business enterprise was to make profits and was echoing British economist John Maynard Keynes. Towards the end of his tenure Jack Welch was in a spot of
bother when one of GE's chemical plants was accused to discharging harmful
effluent into a river.( http://www.solidarity-us.org/site/node/1048
)
The point that is up for discussion
is whether the responsibility of an organization is limited to earning a profit
for its shareholders, paying tax's and providing employment or is it much more.
Today an organization is expected to be a 'Corporate Citizen' and play a larger
role in society while running a superbly efficient organization. The rules have changed!
Corporate Citizenship is
unfortunately a nebulous phenomenon and a mirage to many an organization which struggles with the issue. The
question that needs to be answered is whether philanthropy is important
for its own sake or does it aid business and profit in some way for the
organization. It is found that as organizations mature and move through their
life cycle, philanthropy is viewed in a detached manner rather than
as a strategic initiative.
Most people these days would prefer
organizations that are socially responsible, respond to a crisis or a challenge
with empathy and are transparent in their dealings when in trouble. In the GE
case, Welch's successor Jeff Immelt took responsibility for the clean-up of the
Hudson River and committed funds.
In today's world few organizations
would be able to get away with what Union Carbide did at Bhopal in the mid
1980's and live to tell the tale.
Corporate Citizenship in its broadest
terms encompasses how an organization treats its employees and other
stakeholders. Citizenship today is all pervasive an integral part of which is
what your employees have to say about your HR practices.
Importantly it cannot be viewed in
isolation. There was this perverse story doing the rounds when Satyam Computers
went down, that its founder and chief protagonist Ramalinga Raju
needed to be given some consideration because he ran a free ambulance
service. Corporate Citizenship is a total concept with individual parts to it
and in many ways a shifting goal post. It is not just about good governance or the environment. It is all that and much more.
In India where Corporate Citizenship
is a new fad, the unfolding story can only get better and more interesting.
As Winston Churchill
said:
"I cannot forecast
to you the action of Russia. It is a riddle, wrapped in a mystery, inside an
enigma; but perhaps there is a key. That key is Russian national interest."
The key to good Corporate Citizenship is self-interest and the
interest of people
in a connected global world and the faster organization's understand this, the
easier will be their journey.
3 comments:
Corporate Philanthropy or Corporate Citizenship or any lexicon coined to sound like the new refined version of CSR but it is just a contrary view that apart from managing the affairs of a business nicely one can adopt different methods of PR at the same time guising the true intention behind it.
That is the point. CSR is only one aspect of Citizenship and people particularly in the west are not buying into shallow PR stories anymore.
The bigger issue is for organizations to recognize this and get cracking, else it may cost them their business!
I am also of the view that a government cannot legislate CSR. I know I am going off at a tangent to what you have said.
Mohan
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