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C orporate S ocial R esponsibility and I nternational D evelopment

C orporate S ocial R esponsibility and I nternational D evelopment Prof. Jedrzej George Frynas Reading, March 2009. Does CSR Contribute to Development?. Limitations of the current CSR agenda: Lack of Empirical Evidence Analytical Limitations of CSR The Business Case for CSR

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C orporate S ocial R esponsibility and I nternational D evelopment

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  1. Corporate Social Responsibility and International Development Prof. Jedrzej George Frynas Reading, March 2009

  2. Does CSR Contribute to Development? Limitations of the current CSR agenda: • Lack of Empirical Evidence • Analytical Limitations of CSR • The Business Case for CSR • CSR and Governance

  3. Lack of Empirical Evidence • Business research focuses on benefits from CSR for business, NOT for the stakeholders and wider society (cf. Blowfield 2007) • Research tends to focus on the contents of CSR policies (e.g. codes of conduct), NOT their impact on the intended beneficiaries (cf. Barrientos and Smith 2007) • Example: labour standards in China (cf. Chan 2005 in China Perspectives); ‘95% of export oriented factories in China [are] said to falsify records used in monitoring labour standards’

  4. Analytical Limitations of CSR • Business scholars – and CSR specialists among them – tend to assume that most social forces are outside corporate control and fail to understand the causality behind social problems or the role of companies in them. • But how can CSR tackle complex social problems like poverty, without acknowledging and understanding potentially negative influences such as displacement of local labour or ‘resource curse effects’? (cf. Frynas 2008) • Example: job losses as a result of investment or offshoring

  5. The Business Case for CSR • Are managerial/technical tools adequate to address complex social issues? • What happens to issues where the “business case” cannot be made? Why should economic (as opposed to environmental and social) issues be excluded from CSR? • Who is represented as stakeholder? Are the voices of those without a “stake” or “the backing of third parties” heard? • Example: marginal stakeholders, e.g. home-workers in the clothing industry & small-holder farmers in developing world

  6. CSR and Governance • Need for CSR is often advocated as filling gaps in governance • What are the implications of voluntarism for the poor and the developing world? What is the optimal balance of voluntary and mandatory, prescriptive and enabling legislation? • Can we go beyond the obvious “business case” and ask deeper questions about the place of CSR in society? Should CSR be regarded as a stopgap measure or is it part of a long-term solution for addressing gaps in governance? • Example: macro impacts of the oil sector (cf. Frynas 2009)

  7. Conclusion • It is not argued here that CSR is discredited simply because some CSR initiatives have failed. • But we still know very little about the impact of CSR initiatives on poverty alleviation and developing countries; and claims of the private sector are often unsubstantiated. What we know raises uncomfortable questions about CSR’ efficacy. • Above all, there are fundamental problems about the capacity of private firms to deliver development. • CSR debates risk marginalizing debates on governance and macro-level solutions to complex society-wide problems.

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