CSR: From Silo to Systems Thinking
By Megan Wong, MBA 16
This article originally appeared on LinkedIn as part of series of posts for Professor Robert Strand’s MBA class on Strategic and Sustainable Business Solutions.
In 1947, twelve directors of the Krupp Group were tried for war crimes in Nuremberg. As an arms manufacturer for Hitler’s regime, the Krupp Group was being charged for crimes against peace and crimes against humanity, including the use of over 100,000 forced laborers (mainly Jews and POWs) in the production of their goods. Alfried Krupp stated in his defense: “We Krupps never cared much about [political] ideas. We only wanted a system that worked well and allowed us to work unhindered. Politics is not our business.”
While embedded in the complex realities of Nazi Germany, Krupp’s words echo one of my deepest fears about the business world: silo thinking. When the business community begins to think about its environment as a silo to “work unhindered” and maximize profits, external surroundings are reduced to resources to be extracted or inputs to make money. When business executives delegate all moral authority to the government or other powers, they become likeMilgram’s famous obedient subjects taking orders without taking responsibility for their own actions.
At its best, corporate social responsibility (CSR) is so much more than a haphazard list of programs and donations on a website. It is a powerful framework for the business community to move from silo to systems thinking. Seeing our present day as a point on a timeline, CSR acknowledges that our decisions today affect our world tomorrow. Framing business as a partnership between a number of different parties (including shareholders, employees, customers, and local communities), CSR accepts that the corporate web is deeply connected. When employees do better, the company does better. When local communities thrive, the company thrives too.
Corporate social responsibility includes innovating towards more sustainable means of production because the world’s resources won’t last forever (see Levi’s work on water<less jeans). It includes building up creative partnerships that benefit local communities in the long-run (see Nestle’s work with local dairy producers). It includes investing in workforces because they are valuable contributors to the bottom line (see Starbucks’ work on college achievement for its partners). It includes taking ownership over a product’s supply chain and lifecycle, even when it requires wrestling with tough human rights and economic development issues (see PACT’s work on a no sweatshop, no child labor policy). I would even argue this systems definition of CSR includes paying full corporate taxes because companies depend on tax-funded public goods like an educated workforce.
Maybe some of this doesn’t sound like corporate social responsibility…it’s just ethical and holistic business strategy, right? To be honest, I don’t really care about the semantics. Corporate social responsibility is a mindset of systems thinking to see the complexities of the world we live in and the products and services we deliver. Maybe in the future, we will just call it good business.
#StudentVoices @BerkeleyHaas #MBA292C1 @robertgstrand
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