C orporate S ocial R esponsibility and I nternational D evelopment Prof. Jedrzej George Frynas Reading, March 2009

Limitations of the current CSR agenda: Lack of Empirical Evidence Analytical Limitations of CSR The Business Case for CSR CSR and Governance Does CSR Contribute to Development?

Lack of Empirical Evidence Business research focuses on benefits from CSR for business, NOT for the stakeholders and wider society (cf. Blowfield 2007) Research tends to focus on the contents of CSR policies (e.g. codes of conduct), NOT their impact on the intended beneficiaries (cf. Barrientos and Smith 2007) Example: labour standards in China (cf. Chan 2005 in China Perspectives); ‘95% of export oriented factories in China [are] said to falsify records used in monitoring labour standards’

Analytical Limitations of CSR Business scholars – and CSR specialists among them – tend to assume that most social forces are outside corporate control and fail to understand the causality behind social problems or the role of companies in them. But how can CSR tackle complex social problems like poverty, without acknowledging and understanding potentially negative influences such as displacement of local labour or ‘resource curse effects’? (cf. Frynas 2008) Example: job losses as a result of investment or offshoring

The Business Case for CSR Are managerial/technical tools adequate to address complex social issues? What happens to issues where the “business case” cannot be made? Why should economic (as opposed to environmental and social) issues be excluded from CSR? Who is represented as stakeholder? Are the voices of those without a “stake” or “the backing of third parties” heard? Example: marginal stakeholders, e.g. home-workers in the clothing industry & small-holder farmers in developing world

CSR and Governance Need for CSR is often advocated as filling gaps in governance What are the implications of voluntarism for the poor and the developing world? What is the optimal balance of voluntary and mandatory, prescriptive and enabling legislation? Can we go beyond the obvious “business case” and ask deeper questions about the place of CSR in society? Should CSR be regarded as a stopgap measure or is it part of a long- term solution for addressing gaps in governance? Example: macro impacts of the oil sector (cf. Frynas 2009)

Conclusion It is not argued here that CSR is discredited simply because some CSR initiatives have failed. But we still know very little about the impact of CSR initiatives on poverty alleviation and developing countries; and claims of the private sector are often unsubstantiated. What we know raises uncomfortable questions about CSR’ efficacy. Above all, there are fundamental problems about the capacity of private firms to deliver development. CSR debates risk marginalizing debates on governance and macro-level solutions to complex society-wide problems.