Executive Interviews: Interview with Mark R Kramer on Corporate Social Responsibility
September 2007 - By Dr. Nagendra V Chowdary

Prof Mark R Kramer
Founder and Managing Directorof FSG.
Senior Fellow in the CSR Initiative of the Mossavar-Rahmani Center for Business in Government at Harvard's Kennedy School of Government.

• Thank you Sir for sharing your profound ideas with us. Also congratulations for being an oftencited author in Corporate Social Responsibility and Corporate Philanthropy area. What were the antecedents for embarking on this topic?Was there any powerful trigger?
  We began working with charitable foundations, but came to realize that the impact major corporations have on society is far greater than the impact of philanthropy, and so began to shift our focus to CSR.

• Do you think, given the fact that research on corporate social responsibility had been widening its horizons and continues to attract varied interests in the subject, not enough has been fructified in actual practice? If yes, why do you think there is so much gap what the literature advocates and what the corporates practice?
  Much of the literature comes from academics writing for other academics, and is not oriented to the practical guidance business executives need to implement CSR on a daily basis. Also, much of the earlier theory is rooted in a political orientation that is anti globalization and critical of profit making. Businesses have therefore often seen CSR literature as an attack, rather than as a constructive and useful tool, and have therefore avoided engaging with it.

• What is Corporate Social Responsibility?What are the different ways/forms through which CSR manifests?
  We prefer to talk about the interdependence of business and society, rather than the termCSR.We see many social issues that are affected by business practices, and many business issues that are affected by social conditions.What is often referred to, as CSR is, in our view, the strategic and operational decisions businesses need to make with regard to these overlapping areas.

• How do you distinguish between corporate social responsibility and corporate philanthropy? When the individuals belonging to a company actively engage themselves in a philanthropic activity, for instance Bill Gates (through his Bill and Melinda Gates foundation) etc, would it constitute a corporate philanthropy or individual philanthropy?
  Individual philanthropy is entirely separate from corporate philanthropy, just as Bill Gates' own bank account is separate from Microsoft's, even though his wealth may be attributable to the company. So too, his foundation is separate from the company, even though the company was the source of his wealth. Within the business, the distinction between CSR and philanthropy is clear: CSR involves the social and environmental impacts of the day to day operations in a company's value chain. Corporate philanthropy involves the use of corporate resources whether money or voluntary activities that is outside the ordinary course of business and value chain activities necessary to deliver a company's product or service.

• In your article, "The Competitive Advantage of Corporate Philanthropy" (HBR, December 2002), you have reasoned that, by using philanthropy to improve their competitive context the business environments where they operate the companies can make their giving more strategic? How is it so and how realistic is this phenomenon?
  We think this is very realistic, as exemplified by some of the cases cited in that article, such as Cisco's Networking Academy. If corporate philanthropy consists only of donations to a multitude of unrelated charities, then it is not likely to affect the competitive context but if the company uses its philanthropy to make a meaningful impact on a relevant social issue, then the results can be important to competitive success.

• In "Strategy and Society" (HBR, December 2006), you have observed that many firms' corporate social responsibility efforts are counterproductive for two reasons. What are those two reasons and what can be done to overcome them?
  The two problems are that

1. Companies often approach CSR defensively in response to external pressures and,
2. They bolt CSR onto their existing practices, without baking it into their strategy. They limit CSR to the issues on which they are attacked, treat it as an issue of image and public relations rather than one of substance, and do not see it as a competitive advantage rooted in core strategy. As companies increasingly come to see that being "green" is actually a competitive edge either lowering costs, avoiding regulation and litigation, or attracting customers they will begin to view it differently as many companies already do.