Cynicism and Corporate Social Responsibility

Cynical Responses to CSR in Stakeholder Groups

Sep 20, 2009

Cynical reactions are a big problem for CSR initiatives and severely undermine the value of such efforts.

The failure of Enron is a particularly high profile example of serious business corruption.

‘Enron believes it has a responsibility to conduct itself according to certain basic tenets of human behaviour that transcend industries, cultures, economics, and …boundaries… We work with customers and prospects, openly, honestly and sincerely…’ - Memo from Ken Lay, Enron CEO (McLean and Elkind, 2004).

Enron preached high standards in its dealings, emphasising respect and integrity in annual reports. When it collapsed in 2001 it became evident that Enron, far from being ethical, had engaged in corporate fraud on a massive scale, misleading its investors and employees about its financial status. The revelations following Enron’s demise can only have fueled cynicism in many stakeholder groups. If any specific companies have contributed to an atmosphere of suspicion, Enron is one of them.

Inconsistency in CSR Policies

Inconsistent ethical behaviour causes suspicion and overshadows good work in criticism of the bad. Organisations may exhibit socially responsible behaviour in one area, but not others. Marks & Spencer, praised for selling only free-range eggs has also been accused of using child labour. As CSR policies expressly require the organisation to consider all its stakeholders equally, inconsistency is a clear failing.

Denial of Ethical Transgressions

Frankental (2001) argues that denial also contributes to cynical stakeholders, describing the actions of an oil company operating in Burma which refuses to acknowledge the human rights impact of its operations. The company distances itself from controversy in the careful wording of its printed reports describing itself politically neutral and a guest in the country. Frankenthal (2001) considers this to be a strategy for absolving the company of responsibility which is not justifiable and contributes to cynical reactions to business claims of ‘doing good’.

Concepts of Business Contrast With CSR

Although publicised organisational transgressions and inconsistency may be charged with most stakeholder cynicism, it may also arise from the difference of key concepts of CSR from popular perceptions of the business world. Arriza (2005) states that the concepts of business and ethics are based in opposing camps: business in competition for limited resources, ethics in moral principles and human values like compassion and fairness. It may be hard to reconcile the idea that successful businesses could be prepared to place any priorities above profits, and easier to believe that financial gain must be the prime motivator.

Sector Types and CSR

Certain sectors struggle to convince more than others. Cynical responses are commonest where the companies produce fast food, tobacco and alcoholic drinks, particularly associated with the high profile issues of obesity and damage to health. Responsible behaviour by such organisations is most likely to be attributed to legislation or consumer pressures forcing the action on the industry, rather than any internal motivation from the company itself.

Similarly in this suspicious culture a good reputation is easily lost. ‘Green & Blacks’ and ‘The Bodyshop’, once credited as conscientious and ethically sound, were labeled as having ‘sold out’ after respective sales to companies with less positive records, Cadbury’s and L’Oreal.

Stakeholder Groups and Cynical Responses to CSR

Different Stakeholder groups have different tendencies towards cynicism. The Media in particular represent a cynical stakeholder. Research identified the primary negative message of ‘Companies are not doing CSR for altruistic reasons.’

The Media were also found to report lack of CSR, enthusiastically focusing on headline-grabbing tales of corporate misdeeds rather than less exciting stories of corporate benevolence. Non-governmental organistions (NGOs) are also cynical, and often openly dismissive of CSR efforts. They are most prone to labeling such efforts as annual social reports as ‘window dressing’, a ‘greenwash,’ or ‘a PR exercise’ (Frankental, 2001).

Cynical responses from consumers have been extensively examined, predominately in the marketing literature, where the consumer is the stakeholder of primary concern. The levels of research have produced variable results within the stakeholder group, and even allow a breakdown of the age ranges of respondents, with younger consumers identified as the least cynical about CSR, and older consumers whose children have left home as the most cynical.

Apparent boasting by the company about its CSR policies is to be avoided at all costs as this invites cynical responses. The onus is on PR professionals to ensure that the information they supply for the organisation does not seem too self indulgent.

References

Frankental, P. (2001) ‘Corporate Social Responsibility – a PR invention?’ Corporate Communications: An International Journal 6 (1) 18-23

McLean, B. & Elkind, P. (2004) ‘The smartest guys in the room. The amazing rise and scandalous fall of Enron’. Penguin group, London

The copyright of the article Cynicism and Corporate Social Responsibility in Social Corporate Responsibility is owned by Paula Sainthouse. Permission to republish Cynicism and Corporate Social Responsibility in print or online must be granted by the author in writing.