ASK THE EXPERT
PROF. KELLIE McELHANEY
W
hen we talk of partnership in a business setting, corporate social
responsibility (CSR) often comes to mind. CSR, after all, is an initiative
focused on community partnership to help find solutions to common
health, environmental and social issues.
But contrary to some definitions, CSR is not charity work. CSR is business strategy. Pulse invites Prof. Kellie A. McElhaney—founding Faculty Director of
the Center for Responsible Business at the Haas School of Business at the
University of California, Berkeley—to offer insights on why CSR could spell
the difference between success and failure in today’s business.
1.
Why is it critical for companies
to practice CSR?
Three reasons. First, [it is critical to practice CSR] because
today’s Millennial generation (born 1981 - present) want to
work for companies that are making the world a better place.
These same Millennials also want to shop at and be loyal to
those same types of companies.
Second, because trust in business to operate in society’s
best interest has never been lower. Without trust, it becomes
difficult to be successful. Employees, suppliers, and customers
choose other more trusted brands.
Third, because we live in a world in which governments
are crumbling, and the public sector cannot keep up with the
intractable problems in society and the environment. The
majority of wealth is accumulated in the private sector. These
companies cannot continue to be successful in a failing
world, so they have to work to make the world a better place
in ways that make sense for their business. For example,
Coca-Cola cannot continue to make their product if we continue to run out of clean water as we are today. Thus, it is
incumbent on Coca-Cola to try [and help] to solve today’s
water issues.
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September 2012
2.
Some companies tread lightly in putting profit
and CSR in one sentence because they don’t
want consumers to think they are supporting a cause
with an agenda of profit in mind. What is your take
on this?
A CSR strategy must absolutely be linked to profit, for a
company has to be profitable to survive as a company. Any
strategy that is not linked to creating positive business value
will be cut, and any company that ceases to be profitable will
die. CSR has become a business strategy. It can help a
company save money, capture market share, retain top
employees—so it has to prove valuable.
General Electric CEO Jeffrey Immelt [shared] this [same
insight] upfront about their Ecomagination strategy of focusing on environmentally efficient technology. He has been
right, the strategy has both helped the company and the environment.
3.
Are there trends in CSR that will change or
shape how companies will use corporate
responsibility as a business strategy in the future?
One of the strongest trends is people’s desire to participate. It