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Monday, 12 August 2013

Corporate Social Responsibility or the Lack Thereof

Corporate social responsibility refers to the responsibility of organisations to give something back to society. After all, it is society which supports the organisation. The view is, that corporations need to make decisions based on the greater good of society and not just based on quarterly profits, this would lead to a lessoning of corporate environmental impact and social inequalities. While a socially responsible approach to business seems like something that should be central to business decision making, in many cases this is far from the truth. The problem lies in the fact that in many organisations board members answer solely to the shareholders and as we know shareholders are interested primarily in gaining a return on their investment. This leads to pressure on senior managers to behave in a way that provides maximum return even if this is at the expense of being socially responsible.

This approach has a damning effect on society and leads to problems such as unfair labour practices, failure to protect the environment and failure to protect workers. There is a blatant need for a greater emphasis on corporate social responsibility in society, this point can be illustrated by my earlier post, on the effects of bargain hunting, which highlights the savings corporations are willing to make at the expense of worker safety.

Apple have been in the news recently relating to this. Workers at Apple plant Foxconn have been driven to suicide apparently due to the harsh conditions they are faced with. Workers can live on site in terribly small quarters and work long hours for little pay. Apple are the most valuable company in the world but their workers are driven to suicide due to harsh conditions and many speak of how they could only dream about owning the products they make day in day out. This is a perfect example of shareholders before stakeholders and consumer apathy needs stop. Only we, as a collective, can force change by refusing to buy products from irresponsible companies.

To use a personal example, my family own a small business in a shopping area in Ireland. The building is ran by Tesco, similar to Walmart, who are refusing to reduce rents for any tenants who are still paying rates from the Celtic Tiger era. If I were to sign a lease in this shopping centre today I would receive a rate at roughly half of the price current tenants pay. Tesco officials have confirmed that and stated that reducing older tenants rent would affect shareholder returns. The average retailer has lost 30% of its turnover in this area but still pays the same rent so as not to effect shareholder returns of a company which had turnover of €3.07 Billion in its 2012 fiscal year.

When I here and experience things like this I can’t help but think of the poem attributed to Pastor Martin Niemöller:


“First they came for the communists, and I didn't speak out because I wasn't a communist.

Then they came for the socialists, and I didn't speak out because I wasn't a socialist.

Then they came for the trade unionists, and I didn't speak out because I wasn't a trade unionist.

Then they came for me, and there was no one left to speak for me.”

In society apathy has destroyed our solidarity with our fellow people. We will watch great injustice with little more than a fleeting thought but when it comes to our turn we will have no one to look to.


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Dan.


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