Corporate social responsibility (CSR) programs are becoming increasingly popular in corporate America. There is no doubt that most make positive contributions to society and in some cases, make the sponsoring corporations more profitable. These programs may help organizations attract and retain employees and, in some cases, encourage consumers to buy their products. But are they the thing organizations can and should do in order to make our world better? I think the answer here is "no."
What organizations need to do instead is to design themselves so that they perform well, in terms of what I like to call the quadruple bottom line of sustainable effective performance. They need to perform well financially, socially, environmentally and in how they impact their employees. Corporate social responsibility programs do not do this, they are "add-ons," not a way of operating. Indeed, they may detract organizations from making the fundamental changes necessary to perform in a sustainably effective manner that leads to positive results in the four critical quadruple bottom line areas.
It is obviously beyond the scope of what can be written in a blog piece like this one to go into detail concerning how organizations can be designed to be sustainably effective. What can be done here is to make it clear that organizations must change their key management processes and structures in order to perform in a sustainably effective manner, and in many respects, make corporate social responsibility programs unnecessary.
What are the key areas that need to be changed? Perhaps the most obvious one is how they measure and report organizational performance. Instead of measuring their performance almost exclusively in terms of their financial results, they need to measure and report to the public their results in each of the four quadruple bottom line areas.
They need leaders who understand the impact of key decisions on all the performance areas of the organization, and that emphasize that their organization is committed to performing well in all four areas. In addition, they need to create a pay and recognition system that rewards sustainably effective corporate performance.
Getting an organization to be sustainably effective requires organization designs that allow good information on how they are performing to reach all key stakeholders. They need to put most of the organization in touch with the external environment so employees are aware of what is happening and what impact the organization is having. This, in many cases, requires changes in the organization's structure and how information is distributed.
I could talk in more detail about how organizations need to change their basic decision processes and designs in order to be sustainably effective, but as I said earlier that is beyond the scope of this blog (more detail can be found in my recent article, "The sustainable effectiveness model: Moving corporations beyond the philanthropy paradigm" (Organizational Dynamics, 2015). At this point, I would like to conclude by noting that although CSR programs are in many ways admirable, they should not blind us to the fact that they are not capable of making corporations do what they need to do in order for them to contribute to a sustainably effective world. Indeed, they distract organizations from doing what they can and should do. Doing the right things and doing them right needs to be part of the fabric of corporations, not an add-on.
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