Executive Interviews: Interview with Michael Hopkins on Corporate Social Responsibility
September 2007 - By Dr. Nagendra V Chowdary

Dr. Michael Hopkins
CEO and Chairman of MHC International Ltd. (London & Geneva).
He is a part-time Professor of Corporate Responsibilty
Business Performance (VRBP) at Middlesex University Business School
Visitng Professor at Brunel and Geneva Universities.

Sorry to be pedantic here, but CSR means treating all stakeholders in a socially responsible manner. Consequently, isolated initiatives although welcome do not mean that a company can assume it is socially responsible. Further, I would look at all initiatives and assess how they contribute to a companys bottom line this might sometimes be oblique such as contribution to a companys reputation or reducing risk. Happily, one action often leads to another they are correlated in a statistical sense. Employees who are allowed to work a day a month for a good cause are likely to be well treated by their employer and, therefore, are more productive and long serving.

• Whats "social" in their responsibility? Companies benefit immensely from Corporate Social Responsibility initiatives as the image improves and propels business prospects. The (un!) intended consequences are quite fathomable. Adam Smith observed, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self love." Are corporates, therefore, doing whats minimum expected of them rather than doing a "selfless" service to the society in which they operate?
  The key question, as Adam Smith would no doubt approve, is not the pursuit of profits per se but how profits are made. The pursuit of profits at any cost has led to some spectacular collapses Enron being a case in point. Today it is more difficult to pursue profits at any cost in many parts of the world. Nevertheless, there are parts of the world that have only just started thinking and worrying about "process" such as Wal Mart in the US, and large areas such as China that will, if our theory is correct that CSR is good for business, be forced to become more and more socially responsible simply to preserve their markets spiked toothpaste may be a blind from the US to reduce Chinese imports but true or not China will have to become more transparent, including independent auditing, to preserve market share.

  Now is there a minimum that companies must do to satisfy what is, as you ask, "expected" of them? A risky strategy I believe, since lack of response in one area of stakeholder engagement could well nullify the advantages earned in another area. Interestingly, many large corporations these days are ahead of what is expected of them; for instance, companies, surprisingly, would welcome legislation in many social areas simply to create a level playing field. The beggar thyneighbor polices that I wrote about in The Planetary Bargain are a dance to the death since one company undercutting another will eventually lead to poorly paid employees and, eventually, poor consumers. CSR helps to avoid the latter.

• Do you think every form of business should undertake Corporate Social Responsibility initiatives? Many a times, it is argued that for small companies (although their societal impact can be substantial), this can be a luxury that they can seldom afford.
  We found through our CRITICS survey, discussed above, that large companies (more than 1000 employees) and small companies (less than 50 employees) were more socially responsible than mediumsized companies (51 to 1000 employees). Our analysis revealed that small companies tend to be very responsible simply because they are small and often are family concerns. Families, in general, do treat each other well. Large companies are in the public eye and are either forced to behave socially responsibly or understand the business case arguments and are aware of the benefits. Medium sized companies, we hypothesized (since we didnt know) have grown out of the small business phase and are now being professionally managed in order to survive. Or, they were big but are dropping out of sight. In each case, it is "backs-to-the-wall" as survival is the key concern. No time for fripperies, management fads, going to conferences, keeping up with the Joneses no, survival is everything.

  So, to answer your question, would CSR help or hinder mediumsized companies? (I dealt with small and large companies). There is no in-depth empirical analysis that I can draw upon. But, CSR is obvious. Treating people well including customers and suppliers etc., must be good for business. Therefore, arguably, the best CSR induced medium-sized firms will perform better than those without CSR.

  Perhaps one area may defeat my logic the environment. As I write this, in front of me is a farmer (a small businessman) and I can see his old van with its doors propped closed with a length of wood. Inside, from time to time, is stuffed one of his dead calves or cows. Eventually these may be disposed of legally at a supervised dump or, at much less cost, simply dumped in the stream at the back where my young children can no longer play! I wont go into the reasons why I am powerless to complain, you would have to understand the hypocrisy of French local administration for that. But these sorts of acts, repeated a million times all over the world, show that a problem exists and that CSR is far from their thoughts. So the answer to your question is, CSR is a luxury small business cannot afford, it is perhaps obvious that small businesses who do not observe CSR are luxuries we cannot afford!

1. Corporate Social Responsibility Case Study
2. ICMR Case Collection
3. Case Study Volumes