October 1, 2007
Michael Porter’s theory of social responsibility
One thing that struck me at the Clinton Global Initiative conference last week was how its priorities - cleaning up the environment, eradicating poverty, improving education in developing countries etc - have been adopted seamlessly by many companies.
It is a stark contrast with a few years ago, when the anti-globalisation movement clashed with corporations over their lack of social and environmental standards. Many US corporations, for example, seem notably more enthusiastic than the US government about initiatives to halt global warming.
Michael Porter, the Harvard professor and management guru, turned up at the CGI with a theory to back this notion.
Mr Porter said that companies are in a "third wave" of social responsibility. The first wave was doing good works because of pressure from outside, and the second was acting from philanthropic motivations. This wave, he said, involves finding ways to improve the bottom line by acting in the common interest.
The third wave, he summarised "moves away from PR and branding, which was what a lot of early efforts were about, to asking ‘What can we do actually to make a difference?’ It moves from supporting many social causes with a little bit of money to focussing on two or three areas where they can make a difference."
Mr Porter called in evidence for this trend Starbucks’ use of ethical sourcing for its coffee supplies, Swiss Re’s studies of the effects of climate change to aid insurance against natural catastrophes and MTV’s campaigns on global warming.
Judy McGrath, MTV Networks’ chief executive, who was on the panel chaired by Mr Porter said that MTV not only gained loyalty with youth viewers with its environmental coverage but could also attract young employees by being the kind of place they wanted to work.
You could regard this kind of thing as either selfish exploitation of a social cause or an neat symbiosis of public and private agendas. Either way, it seems to be making a lot of companies as activist, in their own manner, as non-governmental organisations.
