I’ve touched on the semantic confusion about defining the social responsibile activities of business before. Here’s an informative post from Business Ethics that asks a few solid questions. It makes a great point by linking to this page showing how different pharmaceutical companies are referring to the practice.
I couldn’t find a place to comment on the blog. So: I like the term business ethics. I’d postulate that the recent wave of terminology has resulted from a consciousness of a change in social culture (including democratization of information through the internet, ramification of the globalization movement and so on), and a lot of confusion surrounds how “doing the right” thing differs from country to country (not helpful when that social culture rapidly changes). CSR is nothing new, per se, but it is an expression of this changing social context.
I would like to see agreement on the terminology (it’s a little annoying) but for now we’re going to see a lot of people referring to the same thing differently; however, I think we may lose out on nuances that different organizations are trying to express (I think there’s a danger of this happening internally within an organization where communication of your business ethics is an important factor in the retention of talented employees).
Broadly speaking (and for simplicity’s sake, setting aside for a moment the obvious Milton Friedman viewpoint), in the U.S. CSR traditionally focused on corporate philanthropy – what a company does with its money after it has made it. High profile ethics scandals at Enron, WorldCom and others have driven companies and stakeholders to look hard at issues including corporate governance and executive remuneration. However, the predominant focus is still largely on how a company “gives back” to society.
In Europe, by contrast, the focus has traditionally been more on how a company makes its money in the first place – the processes that are in place to ensure that the core business is managed in a sustainable manner and in line with initiatives such as the U.N. Millennium Development Goals and the principles of the International Labor Organization.
In Korea, the visible face of CSR has typically been very much along the American model, with companies making significant contributions to (and often generating considerable marketing mileage from) corporate philanthropy programs. There is also a tendency to give ‘lip-service’ to CSR visions and not follow through in a substansitive manner.
This debate is changing and, as more people voice opinions, the language gets looser (I’m guilty of this myself, no doubt). In 2006, there were 3.5 million blog posts on CSR… I’m glad there is a debate, as without I wouldn’t be learning.