Paradox of Power in CSR Bundy, 2008  Essay

Paradox of Power in CSR (Bundy, 2008)

Existing literature indicates that power increases associated with CSR yield positive benefits to stakeholders, particularly shareholders. The findings from the MNC case study analyzed in Bundy (2008) are in partial agreement with this argument; however, they go further to indicate that this is only so if the 'power' issue is effectively taken care of so that power does not become an impediment to CSR development. CSR-associated power can pose as an impediment if it causes individuals to fight for control, such that they are more interested in increasing their own influence than in furthering CSR strategy for the overall benefit of the organization. When people begin to view CSR as a feasible prospect for increasing their own power and influence within an organization, they are deemed to engage in a power struggle with anyone who appears to be a threat to their quest for CSR power; and when this happens, departments are likely to suffer, and so are the development and implementation efforts of the organization as a whole. Development is undermined as the attention and focus of the managers or parties in dispute is turned away from CSR activity.

This 'power' problem has been found to be more common with CSR compared to other areas of management such as marketing, profit maximization, and quality control, particularly because there is a very strong link between personal ethics and organizational ethics in the case of CSR. Existing CSR literature tends to portray CSR as a reflection of connected and ethical leadership, and to most people, therefore, any manager who strives to engage in CSR has the interest of stakeholders at heart. Towards this end, it becomes increasingly difficult to tell exactly when a CSR manager is acting out of their honest concern for stakeholders' interests, and when they are being opportunistic and acting for their own personal gain. This lack of awareness among stakeholders as a result of limited literature on CSR opportunism, and the high degree of uncertainty surrounding the implementation of CSR have made CSR more vulnerable to opportunism than all other areas of management.

The findings of the Bundy case study, therefore, deviate from existing literature in regard to the claim that CSR always yields positive benefits to stakeholders - there may be no such benefits at all if CSR managers are driven by opportunism and are out to increase their own influence and power over the direction of CSR as opposed to furthering CSR strategy. However, the said findings agree with existing literature that for CSR strategy to be successful, all players within the area of CSWR need to work together in unity, driven by the need to achieve organizational success as opposed to personal power.

Stakeholders can be able to assess whether a CSR manager is acting out of his concern for their own interest or that of stakeholders by examining the influence that they to persuade their targets. Nine influence tactics have been put forth in this regard:

i) Coalition -- where the actor obtain help from other concerned parties to persuade a target

ii) Consultation -- the actor seeks the participation, views, and opinion of the target, and uses this as a basis for persuasion

iii) Exchange -- the actor offers benefits or implied promises as a strategy to influence the target

iv) Ingratiation -- the actor attempts to influence the target by building a good image of themselves or by getting the target in a good mood

v) Inspirational appeal -- the actor appeals to the target's aspirations, ideals, and values to arouse enthusiasm and get them to comply

vi) Legitimating -- the actor legitimizes their proposal by for instance, verifying that it is in line with the traditions, policies or rules of the organization

vii) Rational persuasion -- the actor appeals to logic in persuading the target

viii) Personal appeal -- the actor bases their arguments on the target's feelings of friendship or loyalty towards him

ix) Pressure -- the actor uses pressure, often in the form of persistent reminders or threats to influence the target

Part Three: When Doing Good Results in Good Employees

Based on their study, which involved 781 professionals working at a university-based health science center, Valentine and Godkin (2009) emphasize the need for organizations to engage in CSR, demonstrating that employees are likely to be more sensitive to ethical dilemmas if they perceive their leaders and their organizations as being socially responsible. This finding is in line with Quinn and D'Amato's (2006) argument that "leadership practices that display leaders 'walking their talk' result in commitment throughout the organization" (p. 16). Employees are more likely to want to make ethical decisions when faced with ethical dilemmas if they know that their organization takes CSR seriously and expects them to do the same (Valentine & Godkin, 2009). They can only acquire this knowledge if they interact with their leaders and are actively engaged in the CSR managerial activities within the organization (Valentine & Godkin, 2009; Quinn & D'Amato, 2006).

Employees are more likely to, for instance, take part in charity and volunteering activities at both the personal and professional levels if they see their leaders doing the same. Moreover, they are likely to be more sensitive towards the principles of justice, fairness, and equity if they perceive their organization and their leader as being committed to the same. Such acts are often interpreted by prospective investors as manifestations of a company's commitment towards CSR, and their dedication towards sacrificing profits for social interest (Valentine & Godkin, 2009; Reinhardt, et al., 2008). In the end, the company reaps the economic benefits associated with an enhanced reputation. In summary, therefore, the findings from this case study imply that organizations need to dedicate as much resources as they can to CSR efforts.

Well, this finding is very much in line with the information presented in most of the existing CSR literature. However, it deviates from the findings of Bundy (2008), which indicate that regardless of the quantity of resources dedicated to CSR, success will ultimately depend on how well an organization can design its CSR structure to minimize the risk of power struggles and opportunism. As long as there are internal power struggles among CSR managers, the CSR strategy is likely to flop, even when resources worth millions have been channeled towards the same. Moreover, the said finding raises one fundamental question -- larger organizations are able to put more resources into CSR compared to smaller organizations; does this mean that larger organizations always have better reputations in regard to fairness, equity, and justice compared to smaller organizations? The answer is a tentative 'No', Wal-Mart, for instance, the largest retailer in the world has one of the poorest reputations in regard to employee treatment.

Part Four: Should CSR be a Corporate Culture Value?

CSR programs serve as a manifestation of the degree to which an organization looks out for the interests and well-being of those around it. Customers like CSR, employees and suppliers prefer to be associated with an organization that cares for the needs of the society that makes it operational; and most importantly, investors want to invest in an organization that enjoys a positive reputation and is observant of the principles of fairness, justice, and equity (Ardichvilli, et al., 2009; Calabrese, 2003; Ghalib, et al., 2009; Frederiksen, 2010; Sharp & Zaidman, 2010; Windsor, 2006)). Towards this end, although the law may not necessitate it, CSR activities ought to be incorporated into the organizational culture and overall strategy of every organization, in line with the common good theory.

Well, the theory of the common good requires persons to always act in the interest of society even if the law does not oblige them to (Hartman, et al., 2013). Under this theory, the business is viewed as a citizen in society, with the very same responsibilities as any other citizen. A citizen may have no legal responsibility to help another, but they do have a moral obligation to. The same ideology applies in the corporate arena -- companies may produce harmful substances as part of their production process, and at times the law governing the disposal of harmful substances may be ambiguous as was the case with Beatrice Foods in Massachusetts; but even so, the company had a moral duty to ensure that their poisonous products were enclosed in leak-proof, double-encased barrels. Well, it may pose as a strain on profits, but it still is the right thing to do, for the well-being of everyone.

Part Five: Enron and Corporate Social Irresponsibility

Enron was one of the fast growing companies of its time, growing from nowhere into the seventh-largest company in the U.S. after only a decade and a half in operation. The firm portrayed itself as a profitable entity, only for discoveries to be made later on that most of its financial statements were untrue and had increasingly been adjusted to conceal massive debts, and other information that reduced the level of…