Column: ‘Corporate social responsibility more important than ever in the global downturn’
“As the global downturn continues, it’s logical that businesses of all sizes will aim for much tighter cost control than we have seen in recent years. Commentators have predicted that, as a consequence, many of the initiatives that fall under the broad umbrella of ‘corporate social responsibility, will fall by the wayside. After all, can businesses really afford such a luxury at a time when they need to focus all their efforts on generating income, satisfying their shareholders and keeping their employees in work? In times as hard as these, would anything else be an abdication of responsibility?
My own view is that such a position is based on a fundamental misunderstanding of what corporate responsibility is actually about. CSR is not just concerned with the somewhat hazy mission of saving the planet or, as one cynic summed it up, with BDF (babies, dolphins and forests), but with creating a sustainable approach to doing business. This may mean such classic aspects of the concept as the ‘greening’ of manufacturing processes and a smarter approach to the disposal of the by-products of consumer societies, but it also means developing business models that avoid the sort of excesses which have led to our current economic problems. And embracing the concept of CSR in a meaningful way can have benefits well beyond those of the ‘feel good’ factor or positive PR. In 2007 a study by Goldman Sachs found that sustainable companies actually outperformed the market, often by significant margins. In February 2009, in the middle of one of the worst economic downturns in living memory and at a time when a ruthless approach to business might seem mandatory, a survey by the Washington Post found that responsible companies were still faring at least as well as those with a less enlightened approach to CSR.
Despite the finger of blame that has been pointed at some sectors of the business school community, I would highlight that MBA students have been at the forefront of the drive to sustainable business models for some time. In 2003 a joint research study questioned final year MBA students from 25 countries around the world. When asked what factors would influence their choice of job after graduating, respondents rated corporate values and ethics third, just after job satisfaction and work/life balance and well ahead of money and professional status.
Here in 2009 this appreciation of the importance of CSR has moved even further. At my own school we have experienced so much interest in the whole area, both from current and prospective students, that, as of September this year, we will be extending our full-time MBA programme to accommodate a month long-project designed to examine the environmental or community impact of a business or industry and to formulate practical ways to improve it. By putting our students into the ‘front’ line of CSR in this way, we hope at least in some small measure to help shape a more responsible attitude to business in this class of future corporate leaders.
Professor Philippe Haspeslagh is the dean of one of Europe's fastest rising business schools, Vlerick Leuven Gent Management School in Belgium - www.vlerick.be. With an academic career that encompasses Harvard, Stanford and Insead, Professor Haspeslagh is a leading specialist in corporate strategy, M&A and corporate governance. He is also a successful businessmanin his own right and has been involved in the creation of such organizations as Dujardin Foods, Procuritas, Quest for Growth, Capricorn and Vitaya.
