Health of the nation: An individual or a corporate social responsibility? A preliminary investigation into consumer perceptions

Health of the nation: An individual
or a corporate social responsibility?
A preliminary investigation into
consumer perceptions
Seema Bhate*
University of Sunderland, Business School, Reg Vardy Building, St. Peter’s Campus, Room 203 D,
Sunderland SR6 ODD, UK
Britain is increasingly mirroring a number of nations in terms of the continued growth in
prevailing levels of illnesses related potentially to human food consumption. As this issue
fast becomes global, the question of whose responsibility it is, has come to the forefront of
the debate. Other groups, apart from the Governments with direct involvement in this
crisis are the Consumers and the Marketers. Using the food industry as the basis, the study
primarily focuses on the consumers’ perceptions of the nature and the extent of the
problem. To investigate, three products used in the study are placed on a continuum;
Chocolates represent one end and Genetically manufactured foods the other. Fast foods
are represented in the middle. This framework highlights variations in consumer
perceptions based on product differences: manufacturers have been held responsible
for the provision of pertinent information in the case of genetically manufactured
products; in the context of fast foods and Confectionery both manufacturers and
consumers have been seen as responsible for consumers’ existing consumption patterns.
Copyright # 2007 John Wiley & Sons, Ltd.
Introduction
The issue of corporate social responsibility
(CSR) is not new and incorporates views
presented by ancient philosophers such as
Aristotle. The emphasis as evident today,
however, was provided by the Industrial
Revolution which required a restructuring of
established pattern of relations between
companies and its employees. Historically,
the dominant perspectives have ranged from
the religious, the democratic, the eco environmental,
the financial and the people aspects of
businesses. These prevalent viewpoints
stretched over several decades have shaped
not just the roles that businesses play now in
societies but also the contemporary nature of
debates in this area. The ongoing debate has
recently been brought to the forefront of
current academic and business thinking due to
heightened awareness regarding health issues
amongst consumers. These issues, triggered
mainly by the increased levels of obesity and
other illnesses, have raised a crucial question as
to who should undertake the responsibility for
these problems. The CSR debate has impacted
Journal of Public Affairs
J. Public Affairs 7: 164–180 (2007)
Published online in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/pa.255
*Correspondence to: Seema Bhate, University of Sunderland,
Business School, Reg Vardy Building, St. Peter’s
Campus, Room 203 D, Sunderland SR6 ODD, UK.
E-mail: seema.bhate@sunderland.ac.uk
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
upon the economy, the food industry and
public opinion of the food industry. In an era
when large corporations are considered
increasingly to be untrustworthy, it is vital
for their survival and financial viability that
companies do all that they can to restore the
trust their community should hold in them.
Business ethics and corporate social responsibility
have developed into more than just
buzz-words; they have become important
components of management strategy and are
thus essential to the growth and reputation of
organisations (Lloyd, 1990).
Background
The issue of health concerns the nation; the
three bodies that share the burden of addressing
it are the Government, the Consumers and
the Businesses. This paper focuses on consumers’
perception of issues related to dietary
health and how responsibility can be
apportioned between themselves and organisations.
Businesses have to live up to certain
expectations that societies have of them in
terms of employment, investment and long
term commitment aimed at the welfare of its
consumers. The corporate image can often
determine the long-term success of an organisation,
an image formed on the basis of
consumer attitudes toward the organisation
and the consumer’s willingness to purchase
from the company. The bond between society
and corporations is based arguably on trust.
Unfortunately this has waned over the years
due to business scandals and fear of the extent
of control that corporations have over everyday
life (Varney, 2004). A study conducted by
the UK Food Standards Authority indicates that
organisations use ‘lying labels’ which mislead
consumers into making purchases that are
falsely described as ‘traditional and farmhouse
products’ (Elliott, 2004; Uhlig, 2004). Research
by Mori indicates that 70% of consumers
believe that industry and commerce neglect
their social responsibility and although 38% of
organisations said that corporate responsibility
plays a part in their purchase process, only a
minority took part in completing the Corporate
Responsibility Index questionnaire (Pedelty,
2004). This has led to the conclusion ‘‘that
many of Britain’s biggest companies are still
not taking corporate social responsibility
seriously’’ (Armistead, 2004).
On their part, consumers are buying more
ethical products now. In 2002, sales of ethical
goods increased by 13% in a period when the
British economy grew only by 1.7% (Pedelty,
2004). Although this highlights activities that,
‘‘may represent a step in the right direction but
such efforts have to be sustained and widely
adopted to generate long-lasting benefits’’
(Bhate, 2002). The degree of public involvement
is questionable. For instance: levels of
consumer involvement in the area of pro
environmental behaviour are very low; consumers
still place more emphasis on ‘price and
convenience’ when it comes to their day to day
shopping (Bhate, 2002). The discussion above
highlights two issues at the crux of this debate.
Firstly: there may be differences between
consumers and organisations in their perception
of the extent of their responsibilities
(Dornoff and Tankersley, 1975) and; secondly
consumers, on their part may not accept or
comprehend fully their ethical responsibilities
(Davies, 1979; Davidson, 1998; Deidre and
Edward 2000). For instance a study reports that
only less than a third of the public can name an
ethically or environmentally responsible company
(Pedelty, 2004).
The scepticism amongst consumers has
been exacerbated due to the rapid increase
in globalisation and recent technological
advances. On the one hand these highlight
opportunities for businesses but on the other
hand impose certain restrictions and responsibilities.
However, it is the moral issues
associated with technological innovations
such as the development of genetically
modified foods that have proved to be the
controversy recently. The activities involved in
promoting products described as controversial,
concern particularly the Marketing function
which has long been criticised of ethical
abuse (Chonko and Hunt, 1985; Dunfee et al.,
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
Corporate social responsibility 165
1999; Palmer et al., 2001; Lans-Retsky, 2004).
Nantel and Weeks (1996) present an accurate
picture of the situation by posing this question,
‘‘Is there anyone who has not heard stories of
false advertising, pressure selling or even
discriminatory pricing practices?’’ Marketers
have often been accused of promoting consumption
and targeting vulnerable consumer
groups (Cannon, 1992; Castleberry and
French, 1993; Chang, 2004).
Now of all the disciplines associated closely
with Marketing, Advertising has emerged as
the most controversial because some view it as
aiding the escalation of obesity and other
illnesses through the use of promotional
campaigns aimed at maximising short-term
profits. It is an argument that pushes the
capitalist market against the issue of business
ethics (The Economist, 2000). It is estimated
that $400 billion is spent on advertising every
year worldwide (Harvard Law Review, 2003).
A recent Mori poll indicates that 84% of UK
parents believe that food companies target
children excessively in their advertising campaigns
(Boseley, 2002; www.food.gov.uk./
westminster diet and health forum, 2004;
Westminster diet, 2004). At present 70% of
the costs of children’s television programmes
in Britain are funded by advertising. Forty per
cent of these costs are met by food manufacturers
promoting sweets, fast food, breakfast
cereals with added sugar, savoury snacks and
soft drinks. This highlights the opportunity
that manufacturers and advertisers have to
manipulate the time-sensitive preferences of
consumers in order to promote poor dietary
habits especially in a low involvement decision
scenario (Harvard Law Review, 2003).
The normative nature of this ethical debate
has been widely captured by several philosophical
perspectives. A significant number of
articles address the issue of ethics (Laczniak,
1983; Crane and Matten, 2004; Laczniak and
Murphy, 2006) and several theories that
represent various but often interlinked ethical
value systems have been put forward by
academics (Fritzsche and Becker, 1983; Laczniak,
1983; Fraedrich et al., 1991). Of these,
the ones that are of particular interest to this
current discussion are the Utilitarian and Egoist
viewpoints as these may reflect the interests of
the two players relevant to this present
research; the organisations and the consumers.
Utilitarianism, a popular consequentialist
theory associated with the work of Bentham
(1994) and Mill (1971), is based on the notion
that a decision is correct morally if it serves to
benefit the majority of those affected by the
decision in question. Ethical Egoism, subscribes
to the notion that the pursuit of ones
own long or short term goals is not incorrect
morally as this will result in a good life for the
decision maker. Critics argue that at its
extreme, egoism may result in ‘anarchy and
chaos’ as all individuals in a given social system
will act to maximise their self-interests
(Hobbes, 1979). Smith (1979) presented an
alternative to the Hobbesean perspective by
demonstrating that Egoism may result in
utilitarian benefits. Here egoism aids an
economic system where there is free competition
and information flow in societies.
Organisations, whilst competing with each
other, not only benefit themselves but in the
process but also better societies at large
(Desmond and Crane, 2004). In a similar vein,
Davies (1979) concludes that the different
viewpoints, dominant at different times in
history, are not mutually exclusive.
From a practical perspective, Steger (2000)
points out that when businesses, operating
within normal economic and political
confines, attempt to pursue ethical values,
that, ‘no universal set of ethical principles
exists; most are too woolly to be helpful; and
the decisions that companies face everyday
rarely present themselves as ethics versus
economics in any case’. Organisations therefore
interpret ethics to be a set of rules,
appropriate and specific to themselves (Beauchamp
and Bowie, 1979; Fisher and Lovell,
2006). This lack of generalisation leads to the
creation of a number of ‘in-house’ rules with
no commonality amongst them. Moreover, the
question ‘can self-selected private individuals
decide what the social interests are?’, also
raises valid concerns (Werhane, 1999; Neal,
2005). Even if it can be argued that businesses
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
166 Seema Bhate
do manage to draw the boundary where
profit-maximisation ends and normative behaviour
begins, one would still need to identify
those boundaries and conditions specific for
different markets and operational in varying
international contexts (Cannon, 1992; Aurifeille
and Quester 2003). The normative (ought
to) response therefore may have to be
described by using non-normative (how to)
narratives provided by economic, political,
ecological and democratic commentators. This
may lead to a proliferation of ideas rather than
any specific guidance. The concept of corporate
philanthropy has been forwarded by some
to emphasize a need for a systematic development
of this issue, with a sharper focus, into a
strategy (Hopkins, 2005). Nantes and Weeks
(1996) provide an alternative perspective to
this debate when they propose that ethics and
business need not represent the opposite ends
on a continuum. Using the notion that is widely
accepted to describe the marketing process,
they point to the fact that the primary aim of
the marketing function is to satisfy its consumers.
This, according to them, represents an
ethical approach which is utilitarian in nature.
Given the background where there are no
clear guidelines for organisations and consumers
to act ethically, this current research aims
to provide an understanding of how consumers
perceive the dynamics in the marketplace
in terms of their own role and that of these
organisations in terms of the health-related
issues. As indicated earlier, perceptual differences
between the consumers and retailers do
exist with, for instance, retailers having much
lower ethical standards and a lower threshold
of tolerance when it comes to the language
used in cigarette advertising (Sturdivant and
Cocanougher 1973; Dornoff and Tankersley,
1975).
The current framework
The first study (The results of this
study are displayed in appendices 1–5)
The chocolate confectionery market provided
the focus of the first study. Interviews were
conducted to gain an insight into consumer
perceptions surrounding obesity and how
much emphasis they place on organisations
to deal with health-oriented problems. One
hundred questionnaires were distributed and
responses collected over a period of 8 weeks.
The distribution of the questionnaires was
based on convenience and was conducted
mainly in public places especially cafeterias
and student accommodation in two UK
locations: London and Sunderland. The process
resulted in 68 questionnaires that were
considered usable.
The results indicated that Parents/Public
were considered the most at fault (by 56% of
the respondents) for the rise in obesity.
Organisations were rated as the second most
responsible group by 19% of the respondents.
When asked why they had apportioned blame
in this way, many of the participants’ ideas
were shared. The most common were that
parents had ultimate control over what their
child ate and therefore were responsible for
their consumption.
Although organisations were not named as
the primary source for the crisis their
participation in activities aimed at reducing
obesity was viewed as unsatisfactory. The
results also highlight that there are demands
for low fat confectionery in the marketplace, a
need for an active effort on the part of
organisations and schools to reduce high fat
confectionery and to promote healthy living.
The second study
The first study, provided an interesting insight
into the consumer perception of where the
blame lies but also raised questions regarding
the extent to which product-specificity and the
study’s narrow focus on confectionery and to a
certain extent, obesity, may have been the
determining factors. This prompted the extension
of the framework to be applied to a wider
context so as to include other product
categories such as Fast Foods, GM foods and
Confectionery in the context of obesity and
other health-related issues.
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Corporate social responsibility 167
The dynamic nature of the food industry
provided a rationale for it to be the basis for
this investigation. During the last few decades
it has made the news headlines for one reason
or another—the scarcity of food in terms of
famines and droughts or the over-abundance of
it in relation to food-mountains in Europe. It
has also been an area of several health scares
over the last few years. Crucially to this
investigation people’s attitudes towards eating
have modified dramatically due to their
concerns with health-related issues (Foods
Standards Agency, 2005).
The 1980’s saw these concerns converted
into increased awareness, triggered largely by
two governmental reports by NANCE (1983)
and COMA (1984). These criticized the quality
of the average Briton’s diet by highlighting its
high salt and fat contents and linked them to
the increased instances of heart diseases and
strokes. Over the following years this phenomenon
has exacerbated largely attributable to
the enhanced consumption of processed and
take-away foods. Commenting on the current
enormity of the problem, Graff (2006) points
out that food that is sold on the health
platform, although it may contain less sugar,
may still contain high amounts of salt. He
further discusses the reasons for such high
levels of salt in our foods and highlights what
he refers to as the ‘most cynical’ of all reasons,
‘salt makes you thirsty—and many companies
that sell you food are also keen to put drinks in
your direction’ (Graff, 2006). A similar cynicism
is expressed by Seal (2006) in her article,
when she indicates that more than the
recommended levels of sugar exists in various
products not normally associated with sugar,
such as breakfast cereals.
However, it is the infusion of technology in
food production has proved to be an area of
controversy. Since the launch of genetically
modified (GM) delayed-ripening tomato puree
in 1996 (BBC News, 1996), GM food products
have become more visible in our day to day
food purchases. Consumers, however, have
expressed concern about the existence of GM
ingredients in their food as it is feared that they
may pose, yet to be classified health risks.
Seventy-one per cent of the adult population
report to be very or fairly concerned about the
safety issues in the context of GM foods (Food
Standards Authority, 2002). Consumer knowledge
regarding GMfoods is low because of lack
of pertinent information made available to
them. Government and businesses are in a
position to provide relevant information, but
are not trusted by consumers (www.gmnation.
org.uk, The findings of the public debate,
2006). For instance, a recent news headline
alerts consumers to a GM cover-up story-line,
by highlighting the failure of the Food
Standards Authority to identify and withdraw
GM-contaminated foods (Lean, 2006). Regular
media coverage has led consumers to question
the nature of food they eat, not just its contents
but also its origins. Organic methods of
production are becoming a norm; most supermarkets
now have entire aisles dedicated to
organic products (Murphy, 2006).
The most common association of dietary
health issues is still to obesity, and this has
provided an ongoing debate in recent years.
Whilst the continued growth of obesity within
the UK has yet to reach the gigantic proportions
that burden the United States, it is not
an issue that can be ignored (see Jolliffe, 2004).
According to the Royal College of Physicians, it
is estimated that one in five adults are obese in
Britain. The rise is equally dramatic amongst
Men, Women and Children (Frith, 2004; Hall,
2004; Martin, 2004). Obesity costs the NHS a
total of £3.6 billion per annum, it results in
30 000 deaths by related illnesses such as
cardio-vascular disease, strokes, cancer, respiratory
problems, heart disease and diabetes and
on average it decreases life expectancy by nine
years (Daily Star, 2004; Martin, 2004). More
recently, the media attention towards the
obesity crisis, in particular the coverage of
Spurlock’s experience based on his 30 days
McDonald’s only diet which formed the basis
for his movie ‘Super Size Me’, has alerted
consumers to the role organisations play in this
crisis by offering unhealthy portions of fatty
foods (The New York Times, 2004).
The three categories of products included in
this second study, Confectionary, GM foods
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
168 Seema Bhate
and Fast Foods, are all everyday consumer
purchase items and are also significant normatively
as they vary tremendously in terms of the
underlying reasons for why they are purchased.
For instance, using confectionery as
the research topic provides an interesting
perspective as the consumption of chocolates
can mean different things to consumers at
different times. It is a product that is consumed
by most and is perceived as pure indulgence,
comforting, calming, high in ‘feel good’ factors
and even medicinal in that it has been shown
to be a good source of antioxidants (Haynes,
2003; Scelfo and Helem, 2005; Sweney, 2005).
Despite links with obesity the confectionery
market has increased in the UK and has
resulted in the UK having the highest chocolate
consumption rate per head in Europe
(Cadbury Schweppes, Newsletter, 2006).
Although there is no evidence available yet
that links the impact of GM foods to long term
health issues, as is the case with the other two
products, it is the perception that consumers
hold regarding the ill-effects of GM foods that
has led to its inclusion in this study. However,
it is a contentious issue as it has ethical
implications such as tampering with nature
and violating the intrinsic values of organisms.
In addition, consumers may feel that due to the
lack of adequate information that they have
very little control in the decision-making
leading to the purchase of GM foods. Of the
three categories, the fast food products may be
viewed as more integrated with the everyday
purchase routine. By including this, it will be
interesting to see how much of informationprocessing
takes place in the context of their
purchase.
It is therefore expected that the three
product categories in this study will provide
a continuum in terms of the consumer
perception of the extent of the responsibility
that they can take in tackling the problems
associated with these products. The theoretical
expectation therefore is that consumers
will blame manufacturers concerned with
products that they believe that they have no
control over in terms of manufacturing and, to
a certain degree, in their consumption such as
the GM foods and to a lesser extent with fast
foods. The purchase and the consumption of
chocolates will still be viewed as being
self-regulatory.
Hypotheses
The following hypotheses may be generated
based on the previous discussion. It is
expected that for:
GM foods
The respondents will apportion the most
blame on the organisations that are involved
in the GM foods business.
The respondents will perceive their contribution
to be minimal in this context.
Fast foods
The respondents will consider organisations
that are involved in the fast foods business to
be moderately responsible.
The respondents will perceive their contribution
to be minimal in this context.
Confectionery
The respondents will consider organisations
that are involved in the confectionery
business as not responsible
The respondents will acknowledge their
contribution in this context
Methodology
A sample of 160 respondents was generated by
using a door to door methodology. The
selection of the area was based on convenience.
Located on the outskirts of Durham, the
residential estate used in the study can be
described as family-oriented with teenage
children. Once an old mining area, it has gone
through regeneration in the recent years, with
new factory outlets. After a random start, every
fourth household was interviewed. In the case
of non-availability, the interviewer moved to
the next house and then followed the same
pattern. The interview process was conducted
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Corporate social responsibility 169
over a period of 10 weeks. The interviews
were largely conducted in the evenings to
ensure respondent’s availability.
In the questionnaire, the initial questions
were aimed at acquiring information regarding
the respondents’ characteristics and their
views on health and obesity. The middle
section of the questionnaire collected information
on respondents’ views and their actual
behaviour regarding fat, sugar and salt consumption
for fast food and confectionery. The
third section included questions on GM foods.
Findings
Overall sample
The sample consisted of 160 respondents of
which 92 are males and 58 are females
(Table 1). The majority of respondents believe
that obesity is a problem in the UK (chi value,
118.04; sig., 0.000) (Table 2). The sample
predominantly considered women and children
to be the most affected by obesity (chi
value, 52.36; sig., 0.000). When probed
regarding how the blame about the obesity
crisis should be apportioned, 63% of respondents
believed that the general public should
take responsibility. 51% of the sample perceived
McDonalds as aiding the growth of
obesity (chi value, 545.35; sig., 0.000). Sixtynine
per cent and 68% of respondents
considered the actual efforts of manufacturers
and consumers respectively in controlling
obesity as ‘moderate’ (manufacturers, chi
value, 172.45; sig., 0.000 and consumers, chi
value, 156.98; sig., 0.000). When questioned
about their expectations of the roles manufacturers
and consumers can play in order to
curb obesity, a similar response was obtained
for both manufacturers and consumers. Sixtyeight
per cent (chi. value, 34.93; sig., 0.000)
indicated that the manufacturers’ role should
range from between ‘a fair amount to quite a
lot’ and 87% (chi. value, 128.37, sig., 0.000)
considered that the consumers’ role should
also be either ‘a fair amount or quite a lot’.
Although 49% of respondents were aware of
schemes in the community, aimed at improving
public health, supported by manufacturers
only 26% had participated in them (chi value,
18.78; sig. 0.000). Eighty-seven per cent of the
sample considered the manufacturers’ level of
participation in schools to be either
‘inadequate or only moderately adequate’
(chi value 89.74; sig., 0.000). Fifty-six per cent
of the sample considered the low calorie
market to be served inadequately but this
result was statistically insignificant. Respondents
indicated that in their efforts to curb
obesity manufacturers should encourage
people to undertake more physical activities
Table 1. Sample characteristics
Sample size 160
Males 92
Females 58
Table 2. Consumer perceptions of general issues related to health
N df Chi Value Sig
Obesity in Britain 148 1 118.04 0.000
Most affected gender group 31 6 52.36 0.000
Manufacturers efforts to control obesity 110 3 172.45 0.000
Consumers efforts to control obesity 107 3 156.98 0.000
Expectations of manufacturers 108 3 34.93 0.000
Expectations of consumers 139 3 128.37 0.000
Consumers’ not participated in the schemes 60 1 18.78 0.000
Manufacturers’ participation in schools 136 3 89.74 0.000
Actions to curb obesity 93 9 78.96 0.000
McDonald’s named as aiding the obesity 81 10 545.35 0.000
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DOI: 10.1002/pa
170 Seema Bhate
and also recommended that there needs to be a
revision of the advertising procedures (chi
value, 78.96; sig., 0.000) (see Table 3).
The respondents considered that it is the
public who need to assume the responsibility
for the general health (see Table 4).
Sixty-three per cent of the respondents do
not read the information regarding the sugar
content provided on food labels (chi value,
10.57; sig., 0.001). Compared to this, the split
between respondents who read the labels for
the fat content is about half and half and
statistically insignificant. In the same vein, 62%
of the respondents indicated that these labels
do not influence their purchase (chi value,
9.26; sig., 0.000). Sixty per cent of the respondents
were reported however to have monitored
their confectionery intake (chi value,
6.40; sig., 0.000) and imposed restrictions on
their consumption (chi value, 27.23; sig.,
0.000). Eighty-one per cent of respondents
indicated that the food labels that provided
information on the sugar and fat content were
either ‘somewhat inadequate or moderately
adequate’ (sugar: chi value, 89.05, sig., 0.000;
fat content: chi value, 107.23; sig., 0.000). In
terms of their expectations, 68% reported that
manufacturers’ responsibility should range
between ‘a fair amount to quite a lot’.
Respondents have similar expectations of their
role, 87% considered their role to range from ‘a
fair amount to a quite a lot’ (expectations of
manufacturers: chi value, 34.93; sig., 0.000;
expectations of consumers: chi value, 128.37;
sig., 0.000). Fifty per cent of the respondents
considered the manufacturers’ responsibility
for the confectionery consumption to range
between ‘a fair amount to quite a lot’ (chi
value, 30.600; sig., 0.000). Eighty-two per cent
thought that there was a lot of advertising
(chi value, 85.95; sig., 0.000) as far as
confectionery was considered aimed largely
at children (chi value, 114.28; sig., 0.000) (see
Table 5).
The gender-specific analysis revealed that
women read labels for sugar (not fat) content
related to confectionery (sugar content: chi
value, 10.57; sig., .001). Women were also
more likely then men to be influenced by the
information provided on the labels (chi value,
22.00; sig., 0.000). The women, in the sample,
also monitored their confectionery intake (chi
value, 21.48; sig., .011) and imposed restrictions
on their confectionery consumption (chi
value, 7.84; sig., 0.000) (see Table 6).
Sixty-three per cent of the respondents did
not read labels for the salt content whereas
36% did read relevant labels (chi value, 12.25;
sig., 0.000). About half and half indicted that
Table 4. Behaviour in the context of Confectionery
N df Chi Value Sig.
Do not read labels on confectionery packaging: sugar 100 1 10.57 0.001
Monitor the levels of Confectionery 96 1 6.40 0.011
Impose restriction on Confectionery 113 1 27.23 0.000
Adequacy of information on labels
Fat 93 3 107.23 0.000
Sugar 126 3 89.05 0.000
Expectations of Manufacturers’ responsibility 150 3 34.93 0.000
Responsibility of manufacturers for Confectionery Consumption 142 3 30.60 0.000
Advertising for confectionery 130 5 85.95 0.000
Main targets for adverts 98 5 114.28 0.000
Table 3. Who is most responsible for public health?
First choice N
Public 110
Manufacturers 18
Government 13
Schools 5
Chi value 118.00; df. 6; sig, 0.000.
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Corporate social responsibility 171
they read the fat content but this finding is
statistically insignificant. Sixty-three per cent
(37% do not) of the respondents monitored
their intake levels of fast food (chi value, 11.02;
sig., .01). In addition, 73% of respondents
reported that they imposed restrictions on
their consumption of fast food intake on a daily
basis whereas 26% did not impose any
restriction at all (chi value, 36.10; sig.,
0.000). When asked about the adequacy of
labelling of the fat content, the responses
ranged from ‘very inadequate to moderately
adequate’ (chi value, 30.61; sig., 0.000)
whereas the responses, in the case of the salt
content indicated by the labels were ‘moderately
adequate’ (chi value, 53.08; sig., 0.000.)
When specifically asked about the responsibility
of manufacturers in aiding the consumption
of fast foods, however, 71% (chi value,
25.45; sig., 0.000) of the respondents rated the
role of manufacturers to range from ‘a
moderate to a fair amount’. Sixty-nine per
cent of the respondents considered the efforts
of manufacturers and consumers in controlling
obesity to be only of a moderate level.
Eighty-nine per cent of respondents indicated
that there is too much advertising in the case of
fast food (chi value, 165.33; sig., 0.000) mainly,
directed towards children (chi value, 369.64;
sig., 0.000) (see Table 7).
The sample revealed that women are more
likely to read labels giving them information
regarding the fat content (not salt) (chi value,
14.15; sig., 0.000). This information influenced
their purchase of fatty food (chi value, 10.88;
sig. .001). They also monitored their fast food
intake (chi value, 16.02; sig., 0.000) by
imposing a restriction on their consumption
(chi value, 6.19; sig., 0.000) (see Table 8).
Analysing the data related to the GM food, it
may be concluded that a majority of the sample
felt that the information available to them
regarding GM foods was inadequate (chi value,
47.25; sig., 0.000). Ninety-six per cent of the
responses considered them to be harmful (chi
value, 65.66; sig., 0.000). Sixty-five per cent of
the respondents also monitored the relevant
information regarding GM foods (chi value,
73.81; sig., 0.000) and 66% were influenced by
this information (chi value, 76.85; sig., 0.000).
The respondents (69%) also placed restrictions
on their purchase of these products (chi value,
Table 5. Gender-specific findings (Confectionery)
N df Chi Value Sig.
Read confectionery labels Sugar 37 1 10.57 0.001
Influence the purchase of confectionery 39 1 22.00 0.000
Monitor the purchase of confectionery 55 1 21.48 0.000
Impose restrictions on confectionery 56 1 7.84 0.000
Table 6. Behaviour in the context of fast food
N df Chi Value Sig.
Do not read labels on fast food packaging
Salt 101 1 12.25 0.000
Monitor the levels of fast food intake 101 1 11.02 0.011
Impose restriction on fast food 118 1 36.10 0.000
Adequacy of information on labels
Salt 73 3 53.08 0.000
Fat 40 3 30.61 0.000
Responsibility of manufacturers for The consumption of Fast food: 142 3 25.45 0.000
Advertising of Fast food: 130 6 165.33 0.000
Main targets: Children 116 5 369.64 0.000
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
172 Seema Bhate
89.04; sig., 000). The labelling of these GM
foods was also considered inadequate by 86%
of the respondents (chi value, 88.38; sig.,
0.000). Seventy-Six per cent considered manufacturers
responsible for the current perception
that the general public had regarding GM
foods (between 1 and 4 on a scale which
ranged from 1 to 9). When asked about the role
manufacturers play in providing pertinent
information regarding GM foods, 62% (as
compared to 29% and 59%, respectively who
held Scientists and the Government responsible)
considered that the provision of information
fell into the realm of the manufacturers’
responsibility (chi value, 11.30; sig., 0.001)
(see Table 9).
The gender-specific analysis highlights here
that men considered the information related to
GM food to range from inadequate to moderately
adequate and indicated that they are
influenced by this information.
Discussion and Conceptual
extension
The majority of participants in the study were
aware of obesity as a problem in the UK and, in
general, monitored their fat and sugar-intake.
Women and children were identified by the
sample as the most affected groups. In terms of
apportioning (in the contexts of fast food and
confectionery) the blame, there was a clear
indication that consumers were considered to
be most responsible followed by manufacturers,
government and schools. This result
backs up arguments generated in the previous
Table 7. Gender-specific findings (fast foods)
N df Chi Value Sig.
Monitor the intake of fat in fast food 45 1 14.15 0.000
Information influences the purchase 40 1 10.88 0.001
Monitor the intake of fast food 55 1 16.02 0.000
Impose restrictions on the consumption 57 1 6.19 0.000
Table 8. Behaviour in the context of GM foods
N df Chi Value Sig.
Knowledge about GM food 137 4 47.25 0.000
Understanding about GM foods 129 6 65.66 0.000
Monitor the existence of GM Foods 103 2 73.81 0.000
Influenced by the information 103 2 76.85 0.000
Impose restrictions 109 2 89.04 0.000
Adequacy of information available 75 3 88.38 0.000
Manufacturer’s role 79 6 41.10 0.000
Whose Responsibility is it to give information 99 1 11.30 0.000
Table 9. Gender-specific analysis (GM foods)
N df Chi Value Sig.
Influenced by the information 64 2 6.02 0.05
Labelling inadequate to moderately adequate 74 2 8.74 0.03
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
Corporate social responsibility 173
study that also reported that the public should
take the overall responsibility for the obesity
crisis. This finding, although surprising, may be
explained within the framework used here.
Individuals, when consuming fast foods and
chocolates do so with a certain level of
understanding of the health risks associated
with these products. Individuals may perceive
the consumption of chocolates and fast food as
indulgent behaviour and link it with their
personal situations such as celebration and
depression and therefore, may feel personally
responsible for their actions.
Interpreting the results in terms of the stated
hypotheses, starting with GM foods, the first
hypothesis may be accepted. As expected, the
respondents indicated that the current information
available regarding the GM foods is
inadequate. The majority of the sample
perceived it to be the responsibility of both
manufacturers and the government to provide
pertinent information regarding the GM foods.
Based on the evidence the second hypothesis
can be accepted partially. As hypothesised, the
behavioural pattern related to fast foods
indicated that although respondents considered
the manufacturers’ responsibility in
curbing and aiding the obesity crisis as
‘moderate’ but considered their own role to
be significant. The third hypothesis may also
be accepted partially. As with fast foods, the
respondents also considered the role of
manufacturers to be ‘moderate’ but did not
consider themselves to be free of blame.
These results provide backing to the general
notion held regarding GM products. Health
concerns over the long-term impact of GM
foods have made consumers wary of their
purchase. With numerous variables and uncertainties
existing, consumers require more
detailed information regarding what they are
purchasing; the origins of their food and the
mechanics involved in the manufacture of
these products.
The results in the contexts of fast foods and
confectionery warrant further discussion. It is
apparent that consumers, in general, did not
read the labels in either instance. To elaborate,
two reasons may be put forward. Firstly, the
consumers may be disregarding the issue of
fat/sugar/salt in their diet. As these have a long
history of consumption, the level of threat
associated with them may be low. Secondly,
the information provided on the labels may not
add to their existing pool of knowledge. Both
explanations may provide an accurate description
of the situation. Consumers have become
more health-conscious, which is apparent by
the proliferations of various diets that have
appeared in the marketplace. In addition, the
current study indicates that although consumers
do not read labels that they do monitor
and restrict their consumption of such foods.
Consumers may evaluate and contextualise
any new information by using conventional
wisdom and may not consider it necessary to
consult the labels for further analysis.
It is, however, the analysis on gender that
reveals the most interesting pattern; women
are more likely then men to read the
information available on fat and sugar levels
and this leads to them monitoring, imposing or
changing their behaviour accordingly. By
contrast, in the context of GM foods, it is
men who consider the information provided to
be inadequate, or at the most moderately
inadequate, and indicate that their purchase
behaviour is influenced by this information.
Women are still responsible largely for doing
the bulk of the family food shopping and
therefore may feel it necessary to consult the
relevant labels to ensure the well-being of the
family members. The debate aroundGMfood is
still in its early stages and has not yet reached
the realms of every day public discussion. With
very little long-term research available to link
these foods to health, perhaps the danger
posed by fat and sugar levels in our food chain,
seems to be more real and immediate. Women,
therefore, may feel that they can exercise their
control more by choosing what, and how
much of, sugar and fat intake to have in their
daily diet, an option which is unavailable as yet
with the GM technology.
Summarising the key findings, it may be seen
that consumers, overwhelmingly, hold themselves
responsible for the consumption of fast
foods and confectionery but also indicate that
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
174 Seema Bhate
the current level of manufacturer participation
is only moderately adequate and that they
expect an increased involvement from them.
Much of the argument has centred currently
around what sort of influence large organisations
have on the health aspects of their
products and more importantly what action is
available for them to partake in. Whether or
not the facts point towards organisations as a
prime contributor, it can be argued that the
impetus is indeed with the manufacturers to
take action and engage more with the public to
eliminate any misconceptions (Cellan-Jones,
2006).
Based on the above discussion, it is, therefore,
imperative to realise that a unitary
approach towards projecting an ethical image
will be inadequate. Instead the adoption of a
tripartite policy would incorporate the results
from the current investigation more adequately.
The principles involved in Ethical
Egoism may serve as a logical starting point for
this discussion. If consumers perceive their
role as significant and become more health
conscious, then it is the notion of ‘self interest’
that guides them to improve their health,
which ultimately may lead to the consequences
proposed by the Utilitarian theory.
Utilitarian principles, in this case, will be
directed towards the need for an overall
reduction of the salt, sugar and the fat content
in our food consumption. This process is
absolutely essential for the overall reduction of
unhealthy foods in our diets and to improve
the health of the nation in general, not just in
the immediate future but for the generations to
come. The proponents of the Kantian
approach, however will emphasize the significance
of getting the mechanics, for achieving
this, right. If an organisation’s key role is to
cater for the interests of their stakeholders, it
must also then be their responsibility to
provide customers, one amongst six stakeholder
groups, with an environment to
develop their rational capabilities. In addition,
in recent years, discerning consumers have
demonstrated their power and control by
boycotting the products that they consider
to be unethical (Smith, 1987; McCune, 1990;
Blythman, 2006). Thus, it has now become an
essential requirement on the part of the
manufacturers that they understand the
dynamics involved in the consumer information
processing and decision-making.
The choice of the food industry as an area of
research has been appropriate in that it has
provided manufacturers with an opportunity
to demonstrate a range of ethical activities in
the market place One area open to reform is
labelling. This remains a problematic and a
contentious issue, with very little agreement
between manufacturers and the Government
as to which labelling scheme to apply. This
highlights the dilemma faced by the manufacturers
in striking a fine balance between ethics
and profit maximisation. This is enforced by a
recent article by Fletcher (2006) which reports
of a revolt by the manufacturers against the
traffic light labelling promoted by the Government.
Since its introduction, there has been a
decline in the sales of certain product-lines.
Some manufacturers, therefore plan to abandon
this in favour of their own labelling
scheme.
If manufacturers are to correct the labelling
procedures, the corporate social responsibility
framework to achieve this will have to
take into consideration various requirements
debated in the preceding paragraph and the
life-cycle stages of the products used in this
study, as the pertinent information required by
the consumers, may vary. For instance, considering
that fast foods and confectionery, fat
and sugar have become an integral part of our
diets, it may, therefore, be argued that the
associated products and the information
available regarding them, may be in the
maturity stage. Therefore, in this case, regular
updates have to be made available to people
based on new scientific findings. For instance,
the long-held belief that chocolateconsumption
is linked to obesity has now
been modified. Dark chocolates are now
considered to be good for health, members
of society therefore need to be made aware
of this (Templeton, 2006). As compared to
this, GM foods are still in the developmental
phase and as a science it is new to the
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
DOI: 10.1002/pa
Corporate social responsibility 175
majority of consumers who therefore still
need to learn about the basics but more
crucially the risks that they may pose to
people’s health.
The conceptual extension of the above
theories in the context of advertising renders
itself to a confusing situation, thereby
blurring the distinction between ethics and
non-ethics. When applied in advertising,
some argue that ethical behaviour is ‘‘ to
allow the consumer unregulated choice
among products of varying quality and purity
[as] . . . an essential freedom which comes
from a responsibility to be ethical and
discerning. The seller should not be obliged
to perform the function for the consumer’’
(Chonko and Hunt, 1985). But a different set
of rules needs to be applied when the
consumer is not able to distinguish between
the good and bad i.e. children. Labelling it as
an ‘‘ethical morass’’, Turk (1979) argues that
the very organisations responsible for the
welfare of the children’s health, target them
in their adverts to enhance their profits. As an
area, therefore, this is still open to ethical
reforms. As implied in the current study, a
revision of advertising procedures needs to
be conducted so that the very young are not
the direct target for any advertising campaign.
Whilst a move towards this is already
underway the slightly older age-group (6–15)
should also be included in this group. The
reduction of confectionery in schools may
also be seen as a significant step forward in
this area (Haynes, 2003). Although approximately
half of the sample (49%) are aware of
community schemes and projects undertaken
by organisations only a very small percentage
(29%) have ever participated in them. In
conjunction with schools, manufacturers
need to increase their social participation
by promoting events such as ‘Get active
campaigns’ and ‘sports activities’ which are
already undertaken by Cadburys. A better
communication strategy needs to be
employed by organisations to inform consumers
of new initiatives undertaken to
improve their general health and to combat
obesity.
Conclusion and future research
In summary, individual health issues need to be
taken seriously in order to preserve the health
of Britain. All functions, especially the manufacturers
and the consumers themselves, must
take responsibility and develop alternatives to
combat obesity and other illnesses related to
the consumption of fatty foods. The suggestions
that stem from this research may help
organisations to approach the issue of health
from a practical point of view. Without
jeopardising the need for profit, organisations
may still look to secure the long term
satisfaction of their consumer-base by acting
in a socially responsible manner.
This has been a preliminary investigation
and the research recommendations are by no
means an exhaustive list. More research on
larger samples is required to investigate this
issue further.
Acknowledgements
The author would like to thank Daniel Hill for
his contribution in the first study.
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Appendix 1
Findings from the first study
The sample generated had 68 respondents
which comprised 37 females and 31 males. The
mean age of the sample is 36.18; sd 17.61.
Twenty-six per cent of respondents had
dependents. Although there were differences
reported in terms of the restrictions consumers
imposed on their dependents, these differences
were not statistically significant. As
shown in Table A1, participants themselves
Table A1 Consumer consumption
N df Chi value Sig.
Restrict daily sugar intake 19 2 10.90 0.004
Restrict confectionery intake 47 2 22.83 0.004
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
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178 Seema Bhate
however place restrictions on the amount of
confectionery they consume in any one day
and check fat and sugar levels in the
confectionery products.
When determining whether obesity was a
problem in Britain there was consensus
amongst respondents. Ninety per cent felt
that the problem of obesity could not be
ignored. Most male participants felt that
children were affected by obesity the most
in Britain. The 31–45 age group considered all
categories that is men, women and children to
be equally at risk. Amongst women, the
youngest and the oldest age group believed
that children are more prone to obesity.
According to women between 31 and 60 years
of age females are to more obese than men.
Overall at least 80% of the respondents
considered women to most likely suffer from
obesity.
Consumers were asked who they believed
should take the responsibility for the obvious
rise in obesity. Parents were considered the
most at fault (by 56% of the respondents) for
the rise in obesity. Organisations were rated as
the second most responsible group by 19% of
the respondents. Approximately 16% of the
participants felt that the general public were to
blame. When asked why they had apportioned
the blame in this way, many of the participants’
ideas were shared. The most common were
that parents had the ultimate control over what
their child ate and therefore are responsible for
their.
As the literature review indicates that
consumers consider organisations to be a
significant player as far as obesity is concerned.
It is therefore essential to draw out the
consumer attitudes towards their responsibility
especially those that provide confectionery.
Fifty per cent of the respondents indicated that
organisations have either no or very little
responsibility towards this crisis as compared
to 23% who considered them to be responsible.
When asked if they can identify any
particular manufacturer for the obesity crisis
the majority (91%) of the respondents were
unable to do so. On a scale of 1–10, 95% of the
participants rated organisations’ current
activity in terms of trying to reduce obesity
at 5 or less. Ninety-three per cent of respondents
reported that they were not aware of any
schemes run by organisations to promote
healthy living.
Table A2 Consumer perception of those most affected by
obesity
N df Chi Value Sig.
Obesity in Britain 61 1 42.88 0.000
Most affected gender group 22 3 28.18 0.000
Most affected age group 30 4 22.31 0.000
Table A3 Who should take the responsibility for the crisis?
N
Parents 38
Organisations 13
Public 11
Govt. 01
Schools 03
Chi value: 66.12; df 4; sig. 000
Public-parents chi-value 14.87, sig. 0.000
Table A4 The responsibility of organisations
N df Chi Value Sig.
Particular organisations 62 1 48.49 0.000
Are organisations responsible 34 4 8.59 0.072
Organisation’s participation 65 9 42.23 0.000
Aware of any schemes 63 1 51.95 0.000
Table A5 Opportunities for action
N df Chi Value Sig.
Market for low fat
confectionery
61 1 47.51 0.000
Reduction of the high
fat confectionery
45 1 7.89 0.005
Schools currently do
not promote activities
33 1 5.12 0.024
Activities suggested 51 1 29.02 0.004
Copyright # 2007 John Wiley & Sons, Ltd. Journal of Public Affairs, May 2007
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Corporate social responsibility 179
Almost 90% of the participants felt that there
was now a market for low-fat produce whilst
66% agreed that there was now a need to
reduce the number of high calorie products
available for consumers on the market.
Although schools were not deemed to be a
major contributor to the obesity issue, 66% of
respondents felt that they need to be actively
involved in reducing obesity. Amongst the
activities suggested were an increase in
physical activities and an improvement in
the food served in schools.
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DOI: 10.1002/pa
180 Seema Bhate

What is Corporate Social Responsibility all About?

Journal of Public Affairs
J. Publ. Aff. 6: 298–306 (2006)
Published online in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/pa.238
Commentary
What is Corporate Social
Responsibility all About?
Introduction
Corporate social responsibility is not a new issue (Hopkins, 2003).
The social responsibility of business was not widely considered to be
a significant problem from Adam Smith’s time to the Great
Depression. But since the 1930s, and increasingly since the 1960s,
social responsibility has become ‘an important issue not only for
business but in the theory and practice of law, politics and
economics’ (McKie, 1974). In the early 1930s, Merrick Dodd of
Harvard Law School and Adolf Berle of Columbia Law School
debated the question, ‘For whom are corporate managers trustees?’
(Gary von Stange, 1994). Dodd advocated that corporations served a
social service as well as a profit-making function, a view repudiated
by Berle. This debate simmered for the next 50 years, according to
Gary von Stange, before it once again sprang into prominence in the
1980s, in the wake of the ‘feeding frenzy atmosphere of numerous
hostile takeovers’. This concern for the social responsibility of
business has even accelerated since the fall of the Berlin Wall, which
symbolized the collapse of communism and (more importantly) has
turbo-charged globalization.
Further acceleration has occurred in the past few years. Global
concerns were given an additional edge by the awful events of 11th
September. The collapse of Enron and World Com and their auditor
Andersen due to dubious accounting practices has raised the level of
examination of large companies as well as their auditors. And this is
in spite of the most friendly to companies President of the USA
known in modern times—himself with a dubious past in share
dealings and sailing close to the wind in business transactions as Paul
Krugman’s ‘Op-Ed’ columns in the New York Times have carefully
analysed. Even the President has broached, albeit tamely, the notion
of the responsibility of corporations.1 Moreover, previously quiet
CEOs have begun to note the pressure—for instance, in a rare public
appearance in June, 2002, the chairman and chief executive of
Goldman Sachs HenryM. Paulson Jr. noted,2 after the collapse of the
————— 1See President Bush’s speech in early 2002 and again in July, 2002.
2 www.nytimes.com
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Enron Corporation in late 2001, that ‘I cannot think of a time when
business over all has been held in less repute’.
Moreover, the need to address questions of low living standards,
exploitation, poverty, unemployment and how to promote social
development in general, has been to date almost entirely the
preserve of governments. Clearly, they will continue to have a, if not
the, major role to play. But, increasingly in the future, the promotion
of social development issues must also be one of partnership
between government and private and non-governmental actors and,
in particular, the corporate sector (Hopkins, 2006).
Up until the 1970s, despite regulation and legislation, business
continued largely along an autonomous path, from which it ignored
its critics and listened only to its shareholders, to whom it felt
somewhat responsible. But the decade of the 1960s was to be a
period of enlightenment for many. The Korean War had ended
indecisively, and new conflicts in South-East Asia seemed destined to
follow the same pattern. Citizens were distrustful of government, of
business and of the undefined ‘establishment’. Consumers had
grown suspicious of adulterants in their food and dangerous defects
in the products they bought. People were becoming aware of the
fragile nature of the earth’s ecology, while simultaneously becoming
more cognisant of human rights.
The CSR concept is still developing and has not reached the
maturity stage (Ghobadian et al., 2006). It consists of a number of
free standing and competing ideas that have not been sufficiently
integrated into a broadly accepted and robust theory (Wood, 1991).
In particular, there is an absence of consensus regarding the
elements underpinning the processes of corporate social responsibility.
In this paper a definition offered by Hopkins (2005) has been
adopted:
‘CSR is concerned with treating the stakeholders of the firm
ethically or in a socially responsible manner. Stakeholders exist both
within a firm and outside. The aim of social responsibility is to create
higher and higher standards of living, while preserving the profitability
of the corporation, for its stakeholders both within and
outside the corporation’.
The rise of CSR in the last decade
There are at least seven key items on the CSR agenda that have
developed over the past 10 years3:
1. Corporate scandals: Certainly CSR was not a new issue in the mid
1990s, as noted above, however, the mid 1990s saw an upsurge in
interest as the public sector involvement in key industries fell
away, particularly after the collapse of the Soviet Union, and as a
————— 3This first appeared in Hopkins, M. ‘The rise and rise of CSR’, March, 2006 in
www.mhcinternational.com.
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Commentary 299
crop of corporate scandals hit the headlines—the Ken Saro
Wiwa affair that severely affected Shell’s international image was
perhaps the watershed. To enhance their reputation most major
western companies these days produce CSR reports or similar
such as CR or sustainability reports. There are, also, increasing
numbers of companies in middle income developing countries
that are producing CSR reports. However, there is a concern that
many of these reports may simply be whitewash and business
goes on as usual.
2. Terminology still unfocussed: There has been no convergence on
terminology so that we would, at least, know what we are talking
about. However with the brief dominance of the term CSR in the
early 2000s, the terms corporate responsibility (CR) or corporate
sustainability (CS) have tended to dominate in corporate circles.
Nevertheless, what ismeant by these notions has led to someform
of convergence and the social responsible treatment of stakeholders
is accepted by just about everyone these days.
Many environmental NGOs have expanded into the social arena
giving CSR a strong environmental bias although this bias can be
quickly spotted by noting words such as sustainability liberally
applied—the phrase ‘corporate sustainability’ is such a manifestation.
For instance, the Global Reporting Initiative (GRI) that emerged
from the environmental movement CERES is still stronger on
environmental concerns than social and economic but has had a
major impact on the social reporting of companies who try and
follow GRI guidelines both for reporting and for the production of
very useful indicators. Certainly measurement has improved
enormously over 10 years when, in 1995, I had to scrape to find
social indicators on companies. Nonetheless, issues such as
corporate governance have remained firmly in the hard nosed
business camp and are not often treated along with CSR concerns.
More precision on terminology can be expected as academics start
to analyse CSR. Few, if any Universities have had courses on CSR
although some had started course on business ethics. Today, hardly
an MBA is taught without at least some discussion of CS or CSR or CR
in university courses.
3. The stages of CSR: In the past 10 years the classical route of the
introduction of a new technology has been followed—innovation,
diffusion (through writings, discussions, seminars etc.) and
implementation which is just about starting particularly in
Europe. The USA is behind the European trend as is Japan. There
is much interest in CSR in the developing world, especially India
and South Africa even though few major corporations can be
found with theirHQin the developing world. The diffusion phase
is illustrated by the fact that there are now many newsletters and
newsgroups covering CSR from the very popular Yahoo group
CSR-chicks that fostered CSR-blokes and regional newsgroups,
to Ethical markets, Csrwire, Ethike, Ethical corporation, Ethical
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300 Michael Hopkins
performance and a whole host of regional newsletters such
as CSR Asia, Philippine for Social Progress etc. Although there is
now too much information to read, if one has the time, it is
gratifyinghow much ‘good’ stuff there is about on companies and
their performance, as well as the main actors in the field.
4. Legal basis: Few new laws have entered the arena directly related
to CSR which was one of the concerns of market capitalists such
as ‘The Economist’ and some ‘Financial Times’ correspondents.
However, closely related was the Sarbanes-Oxley law covering
corporate governance which has had the unfortunate effects of
raising the costs of reporting and reducing the number of new
flotations on theNewYork stock market in favour of slightly more
liberal regimes such as London. The field has been characterized
by the growth in ‘voluntary’ accounting standards for CSR—
Account Ability, for instance, with its AA1000 and then Alice
Tepper Marlin’s SA8000, standards. Both groups, incidentally,
steadfastly refuse to use the term CSR. In the pipeline is also a
standard (ISO 26000) on CR coming from the International
Standards Organisation (ISO) based in Geneva. Corporations,
however, have noticed that observing CSR does not mean just
ticking a set of boxes—the approach is more complicated and
cannot be covered by legislation.
5. Government has got into the CSR act, particularly the UK which
has a lively website promoting CSR and also appointed a
succession of CSR ministers who, unfortunately, do not seem to
do very much. Even the USA has haltingly produced a report on
CSR and what Government can contribute after ignoring the field
for many years. Internationally, the inter-governmental organizations—
European Union, World Bank, UNDP, IDB—have been
the most prominent. My previous employer, ILO, has gained
prominence through the application and citation of its core
labour standards but has no policy as such on CSR due to in-house
in-fighting between workers, government and employer organizations
(most notably the appalling IOE, International Organisation
of Employers). The EU, in particular, has done good work in
funding CSR initiatives all over Europe although my own personal
experience shows that its bureaucracy needs a lot of patience to
work with.
6. International development: More and more companies are
adding international development to their CSR activities and, as
Hopkins (2006) points out, there are three main types of
development activities—Type 1: development philanthropy,
Type 2: assisting developing countries purely through housing
local operations there and Type 3: development assistance as part
of reputation building which, in turn, is part of CSR. In my book
(Hopkins, 2006), I argue that there is a real chance thatMNEswith
their wealth and global reach can do much more on development
than the UN has achieved to date. This is because the UN has
become a political football with its development efforts seriously
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Commentary 301
under-funded. It is likely thatMNEsmay, eventually, convince host
Governments that the UN is too important to fail. This is because
CSRwill ensure that corporationswill be involved in development
and since they cannot be directly involved in key policy management
issues they will see that supporting the UN’s development
efforts will, also, be in their own best interest.
7. Finance centre scepticism: As CSR has grown in prominence, at
least in its various manifestations, the right wing so-called ‘think
tanks’ have been arguing that profit maximization should be the
main aim of business while remaining within (more or less) the
confines of law. Simply put, they argue that CSR simply adds costs
with no immediate benefit to profits. Yet, the business case for
increased profits through increased reputation, lower risk that
come hand in hand with CSR have been ignored by the right.
Despite the growing evidence that ‘ethical corporations’ tend to
do better on average in terms of share price, Wall street turks and
their mirror image in the major financial centres of London,
Frankfurt and Tokyo still claim not to understand what CSR is all
about as they punch another button flashing money around the
world. This latter view is being shaken as analysts note that
socially responsible investment (SRI) has been the fastest
growing financial instrument in the USA and Europe financial
centres over the past 10 years. The strange contradiction, where
the subject is ignored in the City but important to investors will,
undoubtedly, change in the coming years. As better educated
graduates enter investment houses, and as the investment record
of SRI’s is better known, the right wing think tanks and their
aficionados in the City and Wall Street will soon be barking up the
same tree.
What is the future for CSR?
And what will happen with CSR in the future, at least the next
decade? Again, seven issues seem to be on the horizon:
1. CSR will become embedded: There is no doubt that CSR will
become embedded in a company’s culture and organizational
profile to such an extent that it will not be noticed, explicitly,
anymore. There is also not much doubt that the phrase CSR will
disappear but the sentiments behind it will be in place. The area
of business and society will continue to be one of great debate,
and the corporation will certainly change its form. I would
hazard a guess that the private sector will still flourish as far as
the next 50 years ahead but its power will be very much
controlled as our own personal liberties also, unfortunately,
become, more controlled.
2. No need for exit strategy: There will be no need for a CSR exit
strategy simply because business will only survive if they can
show, and be evaluated to show, a clear social responsibility in
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302 Michael Hopkins
their continual treatment with their stakeholders. An exit
strategy will not be required simply because social responsibility
will just be part and parcel of normal business practice.
3. Major inroads in developing countries: CSR will continue to
make inroads into developing countries, particularly through
the main suppliers to the large corporations in the developed
world, but also because developing country people will not
suffer corporations that have no connection with local cultures
and aspirations.
4. SMEs will have CSR: CSR will extend to SMEs through rapid
assessment and implementation tools.
5. Companies cannot ignore global concerns: Companies will
grapple with the big issues simply because they see failure as bad
for business. Under-development, labour exploitation, curbs on
migration, global warming, trade barriers, global terrorism are all
major challenges for Governments and corporations. We
already see signs of these increasing concerns for corporations
at the annual World Economic Forum conferences in Davos.
6. UN and third sector cooperation: As companies cannot easily
shape the macro agenda there will be increased cooperation
between corporations, the UN and its agencies as well as NGOs,
the so-called ‘third sector’.
7. Political leadershipwill improve: If the leadership of our nations
continues to be poor—there have been very few decent leaders
in the last 50 years that have combined decencywith social justice
(NelsonMandela, Jimmy Carter, JuliusNyrere, Nye Bevan,Harold
Wilson and even Bill Clinton are just about all, and even those
were not perfect)—then, like it or not, corporationswill become
even more powerful and influential. But will they be setting a
coherent social agenda? Some will, some would not but their
agendas will be examined in ways hardly thought of so far today.
So what is likely to happen next? Hard economics is losing way to
more softer versions. Culture and ethnicity have dominated recent
world events and this trend is likely to continue. Focusing on purely
economic growth for countries or profits for companies will, of
course, be uppermost in our leader’s minds. But the softer undercurrents
of change, such as CSR, will require new, inspired
leadership and, as Jem Bendell4 puts it:
‘Understanding power and its responsible use is probably the
bedrock question underlying much work on corporate citizenship
today’.
Economics of corporate social responsibility (CSR)
Following on from the previous section, does it make sense to talk
about the Economics of CSR? Is not CSR just a good thing in itself?
————— 4See ‘The rise and rise of CSR’ www.mhcinternational.com, March, 2006.
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Commentary 303
There are at least two issues. First, will added emphasis on CSR bring
about an adequate return to company bottom lines? Second, will
increased expenditure on CSR lead to lower competitiveness? Basic
economics tells us that an emphasis on CSR will lead to price
increases that may not allow the specific markets for a companies’
goods and services to clear.
This can be illustrated by considering two companies producing
similar products such as Coca-Cola and Pepsi-Cola or Shell and
Exxon. One company has a vigorous CSR policy—a manager
appointed to deal with CSR, production of a social report, staff
trained on CSR issues, a clear code of ethics, stakeholder needs
addressed regularly. The other company does the minimum—only
takes on board good corporate governance guidelines when
legislation insists, considers pro-active HR policies to train people
the minimum to do the job well, observes environmental regimes
passed into law, consults as few stakeholders as possible.
Clearly under this simple economic model the CSR company will
have additional costs compared with the non-CSR company. If these
costs are then transferred to the companies’ products then, all other
things being equal, neo-classical economics will predict that the non-
CSR company will find it easier to clear its product market than the
CSR company. The consequences are that the non-CSR company will
eventually drive its CSR competitor out of business or force it to
reduce CSR costs.
But, economics does allow price increases and markets to clear if
product quality increases. Thus there is a CSR premium (i.e. an
additional benefit because of CSR earned by firms or appreciated by
consumers and other stakeholders) that can be earned by firms on
such items as product quality, employee productivity, consumer
satisfaction. Therefore, the additional CSR costs could well be
cancelled out by consumers accepting to pay for this additional
premium or through prices being positively affected by the
additional efficiency that CSR is likely to bring about.
Evidence for this positive CSR premium is growing. For instance
the UK-based Co-operative Bank has persistently sought to
distinguish itself from rival banks by stressing its socially responsible
credentials. Its strategy has worked as it has had record profits for
7 years in a row.
Thus, with a well-managed CSR premium, consumers would be
willing to pay extra in the knowledge that the products they bought
had not been produced by slave labour, had respected the
environment, that the technology to produce them had been
acquired without corruption payments, and that the human rights of
its employees and the local community had been protected etc. They
would also know that the products or services delivered were at the
cutting edge of technology and design. CSR does not mean
sacrificing high levels of product or service quality
ACSRpremiumis also earned from increased productivity through
sound human resource (HR) policies of employees and managers.
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304 Michael Hopkins
Product quality is also likely to be much improved when employees
are treated as part of the companyrather than as add-ons—thismuchis
already known in business circles but it is also part of a CSR approach.
CSR is also investment as much as a cost per se. Consequently, to
costs come benefits that are not always immediately apparent when
the ‘social’ investment is made. Training is an obvious social
investment that is accepted as essential for future growth and profits.
Other investments that serve to increase ‘social capital’ are less
obvious but are beginning to be accepted as previously under-played
but essential for the future. For example reputation, a key ingredient
of social capital, is known to be an important force in the market
place. But can reputation be more easily destroyed for a CSR than a
non-CSR company? There is certainly evidence that Nike’s attempts
to adopt CSR policies throughout have led them to attract criticizm
more than its competitors such as Reebok or Adidas. But is this a
result of adopting CSR policies or simply a result of cynicism on the
part of corporate watchers who have heard so much promise but
been disappointed so many times? Certainly, the more companies
and institutions that adopt CSR policies the less particular companies
will be picked upon, and the more resilient they will be to attacks on
their reputation.
As the world teeters toward slower growth and higher real interest
rates another ‘R’ word enters play—that of recession. Under a
worsening business climate, what will become of CSR? Clearly, nonessential
investments and costs are quickly cut back but why would a
company have non-essential investments or costs anyway? The real
issue is what defensive measures can be taken when a downturn in
the global economy is apparent. These could include cutting
product lines, reducing investment in products likely to suffer from
a fall in consumer spending and reducing inventories. CSR being an
increasing part of a companies’ strategy and having a longer term
payoff than other investments might, at first sight, seem to be an
obvious area to cut. But a little more thought shows that CSR is
actually part of a progressive corporate strategy. The same issues of
consumer alienation exist in a downturn as much as in an upturn—
for instance using child labour in appalling conditions is unacceptable
in growth or recession. In fact, a CSR strategy would give a
company an edge either in a downturn or upturn compared with its
competitors and thus CSR is likely to be recession proof.
Concluding remarks
There is little doubt that CSR is here to stay. The momentum
gained in the past decade will be hard to reverse. Clearly, a new
concept is easier to criticize than to propose especially one, such as
CSR, that appeals to the moral sense of corporations as much as their
business sense. But, as the public sector reduces around the world
and the private sector is given its head, the price to pay, at least in the
short term, is increased CSR.
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Commentary 305
Biographical notes
Michael Hopkins is CEO of MHC International Ltd. (London &
Geneva), a research and service company that specializes in social
development issues for the public and private sector alike (see
www.mhcinternational.com). Michael is also Professor of Corporate
and Social Research at Middlesex University Business School,
London and Associate Professor at Brunel University Business
School. He is a former ILO research economist and is a widely
published author on CSR, labour markets and international
development issues. His most recent book is Corporate Social
Responsibility and International Development: Is Business the
Solution? (Earthscan, London, 2006). Michael holds First and
Masters degrees in Mathematics and Statistics and a Doctoral Degree
in Labour Economics from the University of Geneva, Switzerland.
References
Gary von Stange. 1994. Corporate social responsibility through constituency
statutes: legend or lie? Hofstra Labor Law Journal 11(2): 461–467.
Ghobadian A, Gallear D, Hopkins M. 2006. TQM and CSR Nexus
International Journal of Quality and Reliability Management
(in press) .
Hopkins M. 2003. The Planetary Bargain—CSR Matters. Earthscan:
London, UK.
Hopkins M. 2005. Measurement of corporate social responsibility.
International Journal of Management and Decision Making 6(3–4):
213–231.
Hopkins M. 2006. Corporate Social Responsibility and International
Development—Is Business the Solution? Earthscan: London, UK.
McKie JW. (ed.). 1974. Social Responsibility and the Business Predicament.
Brookings Institution: Washington DC.
Wood D. 1991. Corporate social performance revisited. Academy of
Management Review 16(4): 691–718.
Michael Hopkins
April, 2006
E-mail: mjdhopkins@mhcinternational.com
Copyright # 2006 John Wiley & Sons, Ltd. Journal of Public Affairs, August–November 2006
DOI 10.1002/pa
306 Michael Hopkins

CSR: The wolf in sheep’s clothing

Journal of Public Affairs
J. Publ. Aff. 6: 283–285 (2006)
Published online in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/pa.233
Commentary
CSR: The wolf in sheep’s clothing
As 1850 approached Bradford, England, was beset by Chartist
agitation, riots and hunger. It was a filthy, satanic place, ravaged by
cholera. The second mayor of the town decided to remove his five
mills and bring them together in the sweeter air three miles up the
valley. He erected a global monument to corporate social
responsibility, as it would now be described, in the form of the
mills at Saltaire, now an award-winning cultural, commercial and hitech
manufacturing centre where the works of David Hockney are
hung.
But that was not all Sir Titus Salt did. Over the next 25 years he also
erected in imposing Yorkshire sandstone an entire community—823
houses plus shops, schools and Sunday schools, baths, washhouses,
almshouses, a club and institute, a Wesleyan chapel, a magnificent
Congregational church and a park. They remain testimony to the
moral as well as financial substance of a manwhois estimated to have
given away £100m in his lifetime.
He was not the first capitalist by any means to build model villages
in my native industrial West Riding of Yorkshire but the scale of his
social conscience was unsurpassed. Saltaire is a remarkable example
of doing right by people, as they put it where I come from. It is,
however, difficult to argue from this that doing good is good business
since his company survived him by only 16 years, though it might
have been much longer had his son, also Titus, not died young.
Fast forward now 150 years and what do we discover? Why an
entire industry called corporate social responsibility (CSR), complete
with its own branch of PR, constructed on the back of and exploiting
human decency. It makes me inwardly groan and outwardly puce.
It is not just that there is nothing new under the sun. The good
Samaritan was an early example of CSR. Nor can I deny that, if Salt did
not exactly go in for conspicuous personal consumption, he
certainly went in for conspicuous communal investment. His
corporate logo, had he had one, would have been on all his works.
Rather it is that there would have been no Saltaire but for the
genius of oneman—Salt—in experimentingwith thewools of various
sheep and, frankly, gambling on 300 bales of alpaca wool which he
took off the hands of a grateful Liverpool merchant. Alpaca and his
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DOI 10.1002/pa
sound business sense created the legend. It did not exactly die with
him but all too soon the well dried up.
For me, Salt raises awkward questions about the nature of CSR and
where it begins and ends. Let us leave aside whether his brand of
paternalism was good or bad and whether he might not have paid his
workers better instead of stacking up riches beyond the dreams even
of Victorian avarice. Instead, let us not judge him by the mores of
another age, but offer him credit for giving singular practical
expression in his own day to his Christianity.
But where did his prime responsibility lie? Surely, it was to
conduct his business in such a way as to ensure its continuing
viability, capable of generating the profits to renew and develop
itself. Without that, all else would have crumbled—as indeed it did
when his heir died.
Of course, industrialists live in a competitive environment. They
can be beaten to the financial or technological punch and, in modern
times, can be taken over by new management. But CSR must be
meaningless in any day and age if the top man’s prime concern is not
with the continuing, long-term health of the enterprise .
On this basis, there is not a lot of CSR around these days when
companies are fattened up for market and traded like cattle or assets
stripped, pension funds compromised and workpeople cast out, sometimes
by means of an internet message. In these circumstances, CSR
becomes a cynical pretence. So, for me, good, sound management—
responsible governance—with a long-term perspective is where CSR
begins. The rest is fluff, though it can be immensely valuable fluff.
It follows that I accept companies are not solely responsible to
their shareholders and cannot operate in a vacuum. But just how far
does—and should—this CSR fluff go? This is where I start to worry
when my 11-year-old grandson’s village soccer team turns out in
sponsored kit with a logo emblazoned across his chest.
Throughout my life I have seen—and covered as a journalist—
companies and businessmen opening, for example extensions to
hospitals, universities and schools, endowing chairs at universities
and offering scholarships and prizes of one kind or another. Their
CSR, if that is what it was rather than simple generosity, was
invariably recognised by attaching their name to it. And long may this
continue, providing the donors can afford it.
An enormous amount of personal wealth has been put back into
the community in a huge variety of ways for very little return by way
of recognition whether it is endowed seats in memorial gardens or
the provision of a memorial garden itself. Britain would be a bare,
impoverished place but for the desire of its people with a little
money at their disposal to devote it to the public good .
Nor does it become me to criticise the company sponsoring my
grandson’s soccer team when, thanks to technology, its logo can be
stamped, melted or pressed on to his jersey. If the team wants to
show its gratitude in this way—for there can be little or no advantage
to the sponsor—why not?
Copyright # 2006 John Wiley & Sons, Ltd. Journal of Public Affairs, August–November 2006
DOI 10.1002/pa
284 Sir Bernard Ingham
But that is not what CSR is really about, is it? It has become an
industry in itself with several aspects to it. The most visible is top
level sponsorship in which commercial advantage is everything.
Movements in the sponsorship market are the subject of regular
commentary in newspaper business pages. It may be social
responsibility of the highest order to sponsor Chelsea, Liverpool or
Manchester United, but it is not entirely altruistic, is it? It is big bucks
with perceived big rewards; otherwise sponsors would be in short
supply.
Another side of the CSR coin is the expectations aroused in those
seeking sugar daddies. It has become as rampant as what is called
‘planning gain’ in the building sector. Here the developer is
effectively required to throw in something for the community—a
village hall will do nicely—in return for planning permission. Any old
company is now fair game for tapping in return for some often
meaningless recognition designed to make the donor feel good.
Let us not kid ourselves, CSR can be corrupting as well as elevating.
The moral blackmail inherent in it has created its own fashion—
for pious and self-congratulatory reporting in annual accounts that
never, to my knowledge, distinguish between commercial and
philanthropic activity or put a precise value or price on it. Before we
know where we are these sections of annual reports will have been
colonised by every politically correct movement from fair trade to
environmentalism.
This takes me back to the prime responsibility of managers to the
community: to ensure continuing viability by earning the profits
required for renewal and development. Good corporate citizens are
not made out of bust companies.
Over and above that there are enough opportunities for
corporations to demonstrate their good citizenship to strip Fort
Knoxof its gold. If they have resources to spare, they would better do
it quietly by seeking to remedy deficiencies in society by, for
example encouraging and helping employees to stand for local
council office, to enrich our impoverished political life and to
support hard pressed organisations looking after the deprived.
It is by no means obvious to me that the prime need in our society
is for more and more cash dripping from the corporate well; it is for
leadership and example. CSR, even in its purest form, tends to be
measured in the wrong currency.
Sir Bernard Ingham is Visiting Professor at Middlesex University
Business School. He became, after a long career as a journalist and
government PR executive, Chief Press Secretary to British Prime
Minister Margaret Thatcher between 1979 and 1990. He is a
newspaper columnist and a regular broadcaster on current affairs.
Sir Bernard Ingham
30th March, 2006
E-mail: bernardinghamcom@aol.com
Copyright # 2006 John Wiley & Sons, Ltd. Journal of Public Affairs, August–November 2006
DOI 10.1002/pa
Commentary 285