This month our guest writer Stephen Jordan, founder and executive director of the U.S. Chamber of Commerce Business Civic Leadership Center (BCLC), discusses the new research about the increasingly complex external environment against which the CSR field has to operate.
Today’s corporate social responsibility (CSR) field is a product of the business sector’s increasingly complex external environment.
Several factors have driven the field’s growth, including the need for companies to effectively balance their values, stakeholders, and the social and environmental impacts of their business practices. Early pioneers in CSR may have felt thrown into the role of actively managing such growing complexity. But as our new research suggests, the rising generation of CSR practitioners, Generation 2.0, is a little different. They are thinking more in terms of outcomes and increasingly using more sophisticated business tools to evaluate their priorities.
Values, Stakeholders, and Socio/Eco Externalities
Corporate values are a strategic asset, the core of brands, and a substantial factor in knitting employees together into cohesive teams. Values help to safeguard companies against scandals, provide a sense of common purpose among employees, and frame how companies approach complex problems. However, managing corporate values has inherent difficulties. Indeed, despite codes of conduct, vision and mission statements, and team-building retreats, it is hard to measure the extent to which employees buy into and abide by a company’s values. In the era of globalisation, a multinational company’s values must acclimate to local customs and cultures. The management of social capital, values, and governance is therefore becoming an important sub-discipline with its own set of specialists and tools.
The increase in stakeholder expectations also consumes a CSR professional’s attention. For example, the proliferation of civil society organisations and special interest groups has been spectacular – growing almost five-fold in thirty years. Moreover, the rise of the internet and social media have empowered individuals like never before. Good stakeholder relationship management is thus tied to reputation, risk, market development, and customer and employee satisfaction. As such, its value has increased in the eyes of many companies.
Similarly, “built-to-last” companies know that their external social and environmental conditions have a huge impact on their ability to operate. A community’s configuration – including its schools, health care system, housing, culture, and environment – can significantly affect competitiveness and productivity. These externalities require careful attention and understanding.
None of these issues are simple. Handled well, CSR involvement in these issues contributes to business success. Handled badly – or not at all – such involvement might expose companies to huge risks.
The Path Forward
The evolving state of CSR – both the field itself and its professionals– is one of the reasons the U.S. Chamber BCLC took on a recent analysis of the profession. In partnership with the Corporate Responsibility Officers Association (CROA), BCLC released a breakthrough report called The State of the Corporate Responsibility Profession. One of our findings – among nine significant conclusions – is that the characteristics that define a mature profession, such as an educational curriculum and a career pipeline, are still missing in the CSR space.
If we can prioritise the issues facing the field and its professionals, then we can create better systems, tools, and techniques that make it easier to attain business success through CSR.
Stephen Jordan is the founder and executive director of the Business Civic Leadership Center (BCLC), the corporate citizenship affiliate of the U.S. Chamber of Commerce. He leads BCLC’s engagement with a broad spectrum of companies, chambers of commerce, government agencies, and non-profit organizations in the United States and overseas. Stephen holds an M.B.A. from Georgetown University and an M.A. in Political and Social Thought from the University of Virginia, with accompanying academic honors from both institutions. He is a member of Beta Gamma Sigma, the business honor society.
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