An elusive concept
The idea is indeed innovative that constantly stresses the need for corporate social responsibility for, in usual theory, companies have only one function (production) and one purpose (profit). However, once this idea is accepted, everything is supposed to be evident and straightforward: companies have to answer for the consequences of their actions to all the stakeholders (employees, customers, the environ- ment, employment in the area, the State, etc.). But for a theory to be possible, we need a precise concept. Yet if we attempt to conceive of corporate social responsibility in its ideal form, the idea shies away. The purpose of a concept is to grasp what we try to think, but here what we try to catch always flies away as we approach.
In point of fact:
• Corporate social responsibility should be non-economic, beyond economics. But in fact it is justified by economic criteria (ethical investments would be more profitable, the point is to attract customers, to enhance employee loyalty, etc.). Even if not used as an economic strategy, CSR would nevertheless have an economic function, enabling the economy, as a capitalist system, to improve (see for instance the arguments of Stiglitz, 2003). Eventu- ally, economics reappears again, because the aim is to get more
Jean-Luc Moriceau 91 return from the economy. The economic interest is always there, in the background; it can be postponed, but without being different in nature.
• Corporate social responsibility should be a responsibility of the company, beyond the individuals, and thus transcending individual responsibilities. But however close we look, no company is acting (except in the case of legal fiction). A company has no hand, voice or will. The company is made up of individuals’ choices: the choices of leaders, the power to oppose of employees, etc. But then, if the point is only about the responsibility of the individuals in the context of the company, no specific responsibility needs to be considered. CSR would be a matter of individual responsibility. Is therefore consid- ering responsibility at the company level no more than an awareness of a common individual responsibility – unless it is the transfer, the discharge, of an individual responsibility towards an abstract and shared entity?
• Corporate social responsibility should center on society, and look beyond the interest of the company. But if the company worries about society, it is only in terms of the survival of the milieu in which the company makes profit. We cannot either claim that this is only squaring with the pursuit of the company’s own interests (which, as with an invisible hand, would correspond to society’s interest), because otherwise we would not need a concept of CSR. We would just have to say that the company can, without anxiety, pursue its interests. Most of the arguments used to make companies accept their social responsibility point out that, directly or indirectly, the company eventually winds up as the winner. And yet the real test of a social responsibility would be whether society gains an advantage over the company.
If we want to think of a pure corporate social responsibility, which would be social, thus not for the economy but for the society, and which would not be reduced to individual responsibilities, the concept proves elusive. What it grasps fades away as with a child trying to embrace some smoke.1 Full social responsibility cannot be grasped. A company which was perfectly responsible would always be insufficient, and still open to criticism. The company is always at fault in terms of social responsibility, and always in debt to society. If the objective remains desirable, its total realization is impossible.
This concept, which many would oppose to the ‘all-taking’ tendency of shareholders, does not have the immediacy and naturalness which
92 Is a Socially Responsible Decision Possible?
would justify it. Isn’t it this difficulty, even this conceptual impossi- bility, that has delayed its emergence and that is undermining today’s debates? Yet why does this idea nevertheless assume such importance, to such an extent that it imposes limits on what had previously no limits? It is certainly because its inspiration echoes one aspiration of society.
Social responsibility and institution
For this concept to gain consistency and effectiveness, it had to be staged. How could one conceive – beyond the convenient legal fiction whereby corporate liability suits can be brought – of corporate social responsibility? If we want to understand this responsibility and its specificities, let us begin with what is considered to be one of the first texts introducing the idea, and which at the time triggered off a lively debate.2
If the unity of the corporate body is real, then there is reality and not simply legal fiction in the proposition that the managers of the units are fiduciaries for it and not merely for its individual members, that they are . . . trustees for an institution (with multiple constituents) rather than attorneys for the stockholders. (Dodd, 1932).
Seen from this stage-setting, the responsibility is not the company’s but that of the managers, who are acting in the name of and for the company. Most of the texts are clear: the point is to help managers, generally inside the company, to broaden their horizons. Their respon- sibility is to preserve an institution. The institution is what exists before us, what transcends us and what we pass on. It is what makes possible, as well as the context within which labour, work and action can take place.3 If nowadays institutional theory teaches us to recognize that institutional settings impose constraints and specific forms on companies’ development (see, for example, Louche, 2004), let us note that the conservation of institutions also complicates economic calculations.
However, this stage-setting is even more problematic in terms of economic theory. What is at issue is what those people in the company to whom the responsibility for taking decisions has been entrusted should take into account. This question had, been supposedly, resolved, notably by the agency theory. Because of information and power asym- metries between shareholders and directors, shareholders have to set up series of devices and contracts so that the directors do not divert from their assigned duties: maximizing the wealth of the company, that is of
Jean-Luc Moriceau 93 the owners. In this well lubricated machinery, as if the issues have already been settled and transformed into a technical problem, is it not true to say that texts about stakeholders introduce restlessness? They call to look at the situation with lucidity. They demand a broadening of the horizon: what if other stakeholders instituted the same kind of controls? On this view, CSR could be viewed as either contesting the control practices on directors, or as contextualizing afresh the milieus in which these have to take place.
In this stage-setting, for a conventional economic calculation to take place, a gain and cost function would be required relating to the satis- faction of each stakeholder. But it would also be required that the goal function, the aim to be maximized, should remain the company’s profit. And yet this is what stakeholder theory begins to call into question.
And here, this theory plays the rogue.
Social responsibility versus the invisible hand
Here indeed the theory triggers unrest. For behind the inspiration of the champions of stakeholder theory lies an incipient undermining of the basic postulate of the hard core of liberalism. This very spirit-calming postulate, which is said to be a source of dynamism, consists of presenting the right to exercise opportunism as a virtue. Liberalism is based on a stratagem of reason, which transforms opportunism into virtue for the community. The invisible hand cherishes opportunism and takes back from it an energy which is then converted into public virtue. This invisible hand which, when we look at it from a certain angle, ‘does not wear kid gloves as it starves and crushes noiselessly, invincible because pressing everywhere and nowhere’ (Châtelet, 1998, p. 31), but which in economic theory is imbued with the fingers of a benevolent magician.
Corporate social responsibility displays the reverse of the invisible hand. And reveals that it has dangerous claws. The invisible hand, because it is invisible, automatic, magical in the anthropological sense, dissolves responsibilities. Indeed it rejects them as sources of inefficiency.
From Smith (1776), we deduce that if we have society’s best interest in mind (being socially responsible), we should exclusively look at our own interest!4 In the same way, Taylor (1912) maintained that if companies were able to benefit from his method, this was for the well-being of the nation. And General Motors, speaking through its president C.E. Wilson, maintained that what was good for GM was also good for the country. It is always the same logic, which clears the person involved of any charge of opportunism.
94 Is a Socially Responsible Decision Possible?
The invisible hand is what reassures the mind, it is the clear conscience granted to opportunism. And then CSR comes along to give rise to a concern. A third party could be adversely affected: the environ- ment, employees or customers, and so on. Stakeholder theory decomposes the vague idea of the ‘society’ which would benefit globally and in the long run from opportunism into multiple constituents, some of which may suffer. One may recognize the influence in these debates of Rawls (1971), who asserts that an increase of the disparities is accept- able only if each individual sees his conditions improving. Each and every stakeholder must be considered, and no longer merely the vague idea of progress for society considered globally brought about by the invisible hand.
Calling into question the tranquillity afforded by the ‘invisible hand’
is such a disturbing development that it is easy to understand why so many efforts have been made to incorporate this new approach into the economic calculation. If the third party can ask for damages, it is neces- sary to internalize these ‘externalities’. And to show that in the last analysis, taking stakeholders into account ‘pays’: directly via ethical investments or through reputation, trust, or a sustainable environment.
Ricœur (1995, chap. 2) has shown that the history of the concept of responsibility is that of reintegrating into the economic sphere. Respon- sibility has in a sense been hi-jacked by the capitalist system. By being transformed into imputation, it becomes a redistribution mechanism.
For example, when smokers sue tobacco companies, ‘responsibility’ no longer refers to guilt, but to one group which must pay compensation to another. ‘Responsibility’ is thus brought back into the economic calculation.
One can but wonder what would happen if the invisible hand was replaced by a clutch of imploring hands, begging the company to give them their share. What would happen if there was an excess of account- ability, whereby each hand considering it had been unfairly treated would ask for compensation? Would we not eventually reach a situation (like that of surgeons who refuse to operate, and of teachers who refuse to organise school trips) in which companies would no longer operate, because they were hesitating before taking their decision?
By splitting up the vague and unproveable idea of profit for society into consequences for multiple constituents, stakeholder theory is doing more than just complicating the economic calculation. It is instituting a responsibility. What kind of responsibility would there be if there were obligations of opportunism (as virtue)? In the source of responsi- bility, there is an attribution to an agent, who has a power to act, who
Jean-Luc Moriceau 95 can say ‘I can’ (cf. Ricœur, 1990, p. 135). Stakeholder theory constitutes a challenge to the profit objective (without abolishing it) by opening it up to a responsibility for the other party. But, clearly in order to save the economic calculation, to remain inside economics, it does this only vaguely. However, a quite different landscape is to be discovered if we take seriously the inspiration which drives this tendency.