CHALLENGES

Who determines the common good?

Not everyone is ready to assign ad hoc activist groups the role of society's social conscience. In the worst case, some have argued, relinquishing the role of social conscience to special interest groups--which may have no accountability to society or anyone else--could ultimately lead to a sacrifice of individual freedom.

And while Financial Times columnist Richard Donkin feels there is definitely a role for social activism in democratic societies, he points out that some popular movements in the past have been wrong. Adds Chris Fox, director of corporate relations of a major British multinational, "Today's rapid reaction by a company in the face of well-meaning protest may, several decades later, be seen as an abrogation of responsibility by that business to stand up and argue for what it believed to be right at the time."

Another problem with Corporate Social Responsibility (CSR) demands has to do with ethnocentricity on the part of activists in developed western countries making demands that affect people in very different cultures. Says Daniel T. Griswold, "There's a real disconnect between the diagnosis of the social activist in developed countries and the diagnosis from people who actually live in poor countries. They want access to rich country markets. They see that as their number one objective."

And CSR campaigns can sometimes backfire. For example, forcing western ideas about labor standards on foreign countries has on occasion resulted in less overseas investment and fewer jobs. In the same way, raising alarmist concerns about the environment may place unreasonable demands on business.

Even in the absence of unintended consequences, there is no guarantee that CSR standards will have their desired effect. Simon Caulkin, writing in The Observer in April 2002, cited the example of Enron as social responsibility gone amuck. While still solvent, the energy giant made large contributions to the arts, sports and medicine, but those donations in retrospect seem only to have been intended to purchase reputation.

Even assuming it is possible to reach an agreement on the desirability of CSR standards, there is still no fundamental agreement on what constitutes economic, social and environmental development. And monitoring compliance may pose special problems. As an example, The Financial Times in 2000 quoted McDonald's senior director for global social responsibility as saying that because social reporting was still in its infancy, there were no generally accepted auditing practices to check on such issues as respecting animal rights and practicing rainforest conservation.

(Source: Corporate Social Responsibility and Globalization: A Reassessment by Randall Frost)