Sorry, That Is Not CSR!

January 30, 2007 | Print | Email Email | Comments | Category: Viewpoints




David WolfBy David Wolf
One reason that corporate social responsibility is so big in China is that there are endless opportunities for a company to make a difference, to really change people's lives for the better.

(And let's face it – CSR in China requires a lot more creativity than it does in places where there are printed directories and websites filled with interesting opportunities to get involved.)

So it is frustrating to me to watch very large, wealthy, and capable companies place the proverbial finger on the scales by congratulating themselves for corporate social responsibility programs that have nothing to do with being socially responsible. Not only does this do serious harm to the credibility of the companies involved, but more important, it lowers the value of CSR in the eyes of all public stakeholders China.

Chinese are not stupid: you can say you're doing something for the public good, but if they can work out a way where your benefits far exceed your costs in a CSR program, they'll figure you're doing it for self interest anyway, regardless of your actual intent. They may not call you on it, but they will remember.

Let me give you a few of the more egregious examples of what I'm talking about.

The CSR Fig Leaf
Government Relations disguised as CSR: This is probably the most common offense. Companies seeking to improve their government relations undertake programs or business activities that are solely or primarily designed to ingratiate said company with one or more government entities or officials. Making donations to the alma mater of the President, Premier, or other senior official, for example, is not CSR. Neither is sponsoring the establishment of a new center under a key ministry or a high-priority project of the government.

Research & Development (R&D) disguised as CSR: At one point about two years ago, the China Economic Quarterly (CEQ) counted over two hundred multinational corporations that had opened R&D centers in China. Whether or not any or all of those centers actually conduct substantive research and development, or are simply engaged in product localization is not the point: the incessant pitching of R&D centers as "points of technology transfer? or "efforts to raise the quality of local research? don't qualify R&D as CSR. In a local political environment increasingly focused on innovation, both indigenous and otherwise, R&D is seen as a purely commercial, self-intested exercise, regardless of how you may want to spin it.

Corporate Selling Responsibility
Training disguised as CSR: No matter how you try to spin it, opening academies to conduct free or subsidized training programs to train Chinese students or managers how to use your product is not CSR. Any kind of instruction you conduct to get more people to use your product to the exclusion of any others is marketing and nothing else.

Donating branded, habit-forming products to schools: Regardless of intent, if a program serves to build a habit of using a product or service among students, it is not CSR. This was my big problem with a large multinational software manufacturer who donated hundreds of millions of dollars of its software to schools around China. While the donation in theory saved the schools money, in reality it served two purposes: it ensured that the legit copies offset unlicensed copies, and that the schools would not select open source alternatives. That's not CSR, that's market development.

Ooh, did that hurt? Have an aspirin…
Shoot 'em and give 'em a band-aid: Companies whose operations or products inflict significant social costs fall into a unique category. They must, by definition, undertake programs designed to offset the social costs of their activities. These programs are increasingly perceived as a form of obligation, something the company owes China in return for being able to operate here, and as such their CSR efforts aren't really CSR, but more of a tax. Petrochemical and automobile companies fall into this category, as do companies who are in the vice business: tobacco, alcoholic beverages, and fatty foods.

CSR and the Eye of the Stakeholder
If there is one common theme, it is this: CSR is not what you say it is, but what your stakeholders in China perceive it to be. If they see a CSR program as primarily driven by self interest, it is not about social responsibility. The answer to that is not cranking up the PR spin: the answer is devising and implementing programs whose social benefit is at least equal to – if not greater – than the direct benefits the company enjoys.

If you're guilty of any of the above, don't take it personally. But going forward, it's clearly time for all of us to start thinking more creatively – and honestly – about CSR.

About the author:
David Wolf, President and CEO of Wolf Group Asia, a management advisory firm providing strategic communications counsel to technology, media, entertainment, and telecommunications companies in Greater China and the Asia-Pacific region. He is also Contributing Editor for China CSR. David's opinions are his own and do not reflect those of either WGA or its clients.


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7 Responses to “Sorry, That Is Not CSR!”

  1. By NAFebruary 1st, 2007 at 7:03 pm

    Bloody hell! So what is CSR?? Everything you say in this article is CSR, correct? What can companies do then? Are you perhaps asking them to be altruistic and believe pure thoughts and not engage in any enterpising activity? Can you not recognise a solution? You have only pointed out problems that truly do not appear to be problems. You provide only weak arguments.
    – CSR Manager of a large company

  2. By SammyFebruary 7th, 2007 at 10:54 pm

    I guess he is pointing out that stakeholders (including your customers) are smart enough to distinguish b/w your PR activities and CSR programs. There is a single solution to this matter from my pov. That your strategy of CSR programs come from genuine mind of impacting the society. This could mean long term, serious investments and maybe up even up to a level that your whole flow of business might need to change. What you really need to do in CSR is to earn the reputation, not a recognition. Reputation does not develop over night and once the reputation is developed, your recognition automatically follows. This is what most of MNCs in China need to look in to and it is not easy and simple enough to toss to your PR agencies.

  3. By SammyFebruary 7th, 2007 at 10:56 pm

    One additional comment is that your profit making model is not on the other side of CSR. CSR is rather about how you make your money, not how you spend them. If you can link it with your long term objective/strategies, there could be a possible solution but it is very hard to say since it(what you call a solution; I would rather call it a strategy) differs by each industry.

  4. By JennyFebruary 14th, 2007 at 12:16 pm

    It's not impossible that a company could have more than one motivation for an action. Couldn't it be remotely possible that the company needed an R&D center, and when choosing between the home market and China, decided on China because they thought China might benefit from it more?

  5. By DennisMarch 2nd, 2007 at 12:32 pm

    I think David's comments make sense, there are many companies out there that focus so heavily on the PR and business objective of CSR that the actual benefit of such a program loses its effect, and hence diminishes any "real" return, and reputation building.

    Though I believe there is a place for programs similar to those which David knocks above, the emphasis on intention and creating a program that does have a net positive impact, notwishstanding any benefit to the company, should be the aim and the end result.

    The onus is on the company to be creative and effective in demonstrating the true value of the firm by alligning the program with long term vision and the social value that is inherent in its business.

  6. By DavidMarch 2nd, 2007 at 5:48 pm

    First, thanks very much to all of you for commenting – Dennis, Jenny, Sammy, and CSR manager. Good stuff all.

    I suppose if we wanted to we could include just about anything we wanted under the rubric of CSR. I write this column largely because I'm tired of watching the term "CSR" cheapened into meaninglessness as it is defined by nearly every corporation as meaning whatever they happen to be doing.

    I'm going to be writing a lot more about this in the coming months, but for now let me draw my line in the sand:

    1. CSR is audience defined, not company defined. If the public at large interprets something as CSR, then it is. Not only does this mean that some things we call "CSR" are not, it also means that some things we do not call CSR actually are.

    2. For a program to be CSR, it must be percieved as being of greater benefit to the community than to the company conducting it – regardless of the actual outcome.

    3. CSR must more than offset the social costs the company lays upon the community in the conduct of its business.

    If you don't define CSR that way, or don't want to define CSR that way, all fine and good.

    Your audience, however, will use similar criteria. And in this world of user-generated media, they won't hesitate to tell you so.

    All the best,

    David

  7. By RomMay 14th, 2007 at 3:09 pm

    Hi David,

    Given that I am working for a big company on the field of CSR, I could disagree with what you said. However, I have no choice but to agree.

    CSR is a tool for corporate communication. And it will be very difficult to stick in people's mind that companies are social organizations, that bear a responsibility towards the environment (in its broad definition).

    Companies understand CSR well, and see very well they use of it (PR, Govt ass licking etc.), but if CSR cannot match ROI, then… forget about it.

    I think a vision of a "true" CSR, wich means a CSR that emcompassed the LONG TERM benefits that it will bring to the society, and thus, to the company, cannot fit together with the idea of competitivity.

    I would love someone to prove me wrong thou.

    Cheers,

    Rom

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