David Vogel, a professor at UC Berkeley’s Haas School of Business, has established himself as a distinguished scholar on the subject of business and politics. In his latest work he has crafted a wide-ranging survey of contemporary trends and ideas in corporate social responsibility (CSR) that provides a very good introduction to the subject for the uninitiated. He details many of the challenges and questions raised after two decades of work by civil society organizations, governments, and companies redefining the relationship between business and society.
Through a broad survey of reports and studies, and illustrative case study vignettes, the book provides an overview of the central areas that occupy much of CSR work today: labor and working conditions, environmental stewardship, and human rights.
But Vogel’s survey suffers from one notable shortcoming that colors its treatment throughout: He never provides a clear definition of what he means by CSR. The result is a definitional vacuum that leads to a rather one-dimensional portrayal of the environmental and social efforts undertaken by companies. What Vogel offers instead is a CSR broadly defined by business practices as they are celebrated and castigated in news accounts and scholarly treatments of the subject. His study, therefore, offers only a peek into the difficult and daily operational challenges undertaken by many businesses answering increasing demands upon them to provide a host of public goods, ranging from clean air to workers’ rights protections.
This oversight leads Vogel to conclude that CSR is a business strategy that makes sense for only two types of companies: those with a conscience – the Ben & Jerry’s, Marks & Spencer, and Patagonias of the world; or those that “have been targeted by activists, [or] who are concerned that they could be targeted.”
This conclusion overlooks the deeper behavioral changes that are under way in the business world, and that are reflected in the approach to CSR by many companies that fall into neither category. These are the companies that are incorporating the strategic advantages inherent in CSR as a management tool that better equips them to first connect with, and then respond to, a multitude of stakeholder demands in what are increasingly demanding operating environments.
Though consumer willingness to reward “good” corporate behavior for its own sake – his “market for virtue” – may indeed be limited, the market for sophisticated managers that understand and leverage the comprehensive stakeholder engagement at the heart of CSR is great and growing.
Vogel’s analysis has its limitations, but this fact has as much to do with the shortcomings of the field of CSR as it does with Vogel’s approach to it. The reality is that those of us who are directly involved in CSR have not yet successfully established its value as a crucial business approach to managing organizational behavior, complexity, and change. In this sense, the book holds up a revealing mirror to CSR as it is currently understood. It demonstrates that much work remains to be done in terms of the framing and practice of CSR today and going forward to establish its importance to business.
In spite of its definitional shortcomings, Vogel’s analysis is spot-on in redirecting our attention to the important role governments should play in shaping the boundaries of business behavior. He reminds us that throughout history powerful and necessary shifts in business practices have not emerged voluntarily, but from government mandate.
“The Market for Virtue” provides a solid first volume of what should be a two-volume treatment of the subject of business regulation in the age of CSR. It would be a great contribution if Vogel would apply his deep expertise to a second volume, one that explores what a stronger role for public policy would look like in governing global business behavior, what conditions and business drivers would support this, and how historical experience informs this process. Teasing out these themes, which he has only begun to do in this work, will provide needed answers to the very question being asked by many CSR practitioners and observers both in and outside companies: Why has the government retreated from the role it once played in regulating business, and how do we bring the government back in a meaningful and constructive manner?
Matthew Hirschland is a director at Business for Social Responsibility in San Francisco.