Corporate Social Responsibility has become a racket | Hacker News Reader

Corporate Social Responsibility has become a racket

telegraph.co.uk

32 pointsdanielam15 comments

The social responsibility of a private company is actually very straightforward. It is to make a decent product, which does what it says it will, and isn’t dangerous in any unexpected way. It is to charge a fair price. It is to honour its contracts. And it is to pay its staff and suppliers on time – and, within reason, to pay its taxes promptly as well. If it can do all of those things, and do them well, it is already making a hugely responsible contribution to society.

While I do agree with this premise, I also believe that most, especially here in the US, would recoil from a company that declares a limited CSR. The common mentality would probably be: "Those fatcats should be using a sliver of their mountains of money to help humanity!"

What's interesting is that once you've popularized, formalized and then legislated CSR... what would would have is a set of regulations. In my view, the pressure on corporations to bullshit CSR has everything to do with our collective absence-of-faith in regulations/public sector: "The government will just screw the system up even more if they take more money. But this sneaker company is super amazing at making sneakers: surely some of that ingenuity will translate into the betterment of our society!"

Needless to say, smartness in one area is not smartness in all, and the person who is focused on business is not necessarily going to deploy her or his best efforts on doing what is essentially the government's job.

Summarized by Larry Ellison (I can't believe I'm quoting him):

"A corporation's primary goal is to make money. Government's primary role is to take a big chunk of that money and give it to others."

>The social responsibility of a private company .. is to charge a fair price. .

(And I believe implicitly it's to make a decent profit)

I believe that statement is reminiscent of a world that no longer exists. While this may have been true in the 70s, 80s and even 90s, it's simply not true of the world anymore.

No company charges a "fair" price anymore. The price a consumer pays for a product is entirely divorced from the cost to manufacture said product. The price a consumer pays has been maximized to "whatever consumers are willing (and able) to pay".

Similarly for making a "decent" profit - companies did this for years, even decades, and each year they were expected to make more profit than the previous year. Now, the expectations are completely out of control. That's why when a Bank or big company "only" make billions in profit it can be called a failure.

> No company charges a "fair" price anymore. The price a consumer pays for a product is entirely divorced from the cost to manufacture said product. The price a consumer pays has been maximized to "whatever consumers are willing (and able) to pay".

Yeah, that's true, but hasn't it been always? "Whatever consumers are willing (and able) to pay" is pretty much the definition of "price" in Econ 101.

> The price a consumer pays for a product is entirely divorced from the cost to manufacture said product.

So what? Never mind that any viable company has to charge more than the 'cost to manufacture', unless there is coercion or fraud involved, an agreed to price by the buyer and seller is automatically a legitimate price for that buyer and seller, otherwise they wouldn't have come to an agreement.

Obviously a different buyer might think differently, but that doesn't change the legitimacy of someone else's transaction.

I agree with your assessment on limited CSR and think this is just a poorly written article.

The logic flaw here is the categorization of CSR as somehow separate to the scandal. The reason there is a scandal is because the company has failed in its basic responsibility to society.

The article raises a very limited definition of responsibility which by application would actually imply that no wrong doing had occurred.

The authority of the article contained within the line "The social responsibility of a private company..". Is actually the journalist just quoting their own words from two sentences down as a means of reinforcement.

The fact that the journalist thought it appropriate to quote themselves on their own opinion piece makes this whole piece especially dubious.

Perhaps it's because CSR is just a facade. Too often we're seeing companies branding themselves as customer-centric, and with the large volume of tehchnology-illiterate in the population, people believe anything/doesn't question their own consumption and The consequences hereof. I have friends who volunteer 6 months in Thailand to work with children only to come home and post instagram pictures of new Nike sneakers once every month (as far as I know Nike doesnt exactly have the vest reputation in regards to child labour).

Most of the time, I feel like people don't give a shit about their consumer habits because they are not motivated by The difference these habits make in the long run ør in a global perspective. It's all about getting those likes. "Supporting" companies with a good CSR profile is a good step towards these likes.

Look up how many people shared and signed up for anti-Kony marches in social media and find the articles that show how many actually showed (it was under 100 I think).

I may be extrapolating here, but I don't think my point can ever be proven even of I'm right.

CSR in my opinion is a scam by default. A company's job is to maximize shareholder value by doing what it is supposed to do the best. Whatever money the company puts into CSR is essentially taken away from the share holders.

Except that (i) measures which improve corporate image often increase shareholder value and (ii) shareholders freely choose to invest in companies knowing they have chosen to spend a portion of revenues on CSR initiatives, and very rarely revolt against corporate boards over CSR

Exactly! The whole point of CSR is to make money by making the company look good. In modern capitalism, corporations exist solely to maximize profits. By that principle, you can figure out why a corporation does anything by simply following the money. This is just another example of that.

If you ask an American "what is the purpose of the corporation" they will answer as you claim to be universally true.

If you ask in Japan, the answer will typically be "to supply jobs"

The purpose of a corporation is a social and legal construct and there is no reason it couldn't be something else.

A good one in my opinion is "supply long term monetary stability".

You have to actually do something to impose the correct incentives if you want entities to act in a particular manner. I'm not convinced that in the absence of CSR these incentives would have been imposed - which seems to be the lynch pin of the telegraph's piece - and see no evidence to support it.

The premise of this article seems to be that if VW didn't spend so much time and money on CSR, that their emissions cheating would have been prevented. That seems rather far fetched to me. It's not really clear how one would have any impact on the other.

The point of the article is that CSR is simply a marketing expense to a corporation and has no relation to the actual social value of the corporation.

Recognizing that is the first step toward actually making corporations socially responsible by setting limits on them from the outside.

Outside limits already exist. The entire scandal is that they cheated their way past those limits.

I mean, you're right that CSR is basically a marketing expense, but I still don't see how getting rid of it would fix anything here.

The connection would be that with CSR, VW hhas a lot to love up to. Without those promises, they might not have felt a need to push the buttons they did.

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