"We never want to offend anyone with the products that we offer." Walmart Spokesman
This is not a blog about the merits of the Confederate flag as a symbol of anything, but rather an opportunity to illustrate an important point about Corporate Social Responsibility (CSR). The prevailing thought about CSR is that when a corporation acts in some ethical or moral way, then they are being socially responsible. I contend that when they are acting "moral". businesses are almost always being Politically Correct in order to maintain customers.
Here's the crux of the debate. Are for-profit organizations just an economic agent of shareholders or are they also moral agents of society. The famous Friedman Doctrine posits that for profit business have only a fiduciary responsibility to shareholders as long as they obey the law. Obama has made the statement that businesses are moral agents. Which is it?
Business ethics is the framework within which society deems an action to be socially responsible, as opposed to being economically motivated. Here's the key to ethics that is often not noticed. For an action to be ethical, the actor must be motivated by the benefit of the action to others at a detriment to themselves. if it is beneficial to the actor, then its economic or self motivated. Further, for an action to be ethical, the action cannot not be governed by law or policy, only the character of the actor.
Applying this to CSR, an action by a business is being socially responsible when society (non shareholder stakeholders) benefits at the expense of the shareholder, otherwise its just a good business decision for the benefit of the shareholders. Conforming to the norms of society in order to be legitimate may be morally aligned actions, but they are motivated by the economic benefit of the investors, not the ethics of management.
So when Wal-mart says they do not want to "offend anyone", is that a moral action that benefits society but reduces returns for shareholders, or is it "good business". Is it a judgment of management that more people will think well of them and remain or become a customer than there will be people who are offended by the removal of the flag, seeing the flag as positive.
Ten years ago or so when CSR was the hot topic, I failed to read an article on a company's CSR that did not ultimately say it was good for the shareholders to take some action for employees or the environment or some other PC movement. Chic-fil-a is famous for not opening on Sundays. is this a moral stance or is it just good business. Truett Cathy used to say it was beneficial in getting good employees and essential to their appeal to consumers. It was not to the detriment of investors.
Its perfectly fine if a business wishes to make decisions based on what is PC in order to communicate the image they wish to the market. Its not OK to "toot their horn" that they are being morally responsible. The fact that these actions concerning the flag are all occurring around a highly publicized, emotional event somewhat supports that CSR is PC. SO, why don't "we" (the business community) call it "our PC policy" for branding rather than pretending "we" are something we are not (moral agents).
Certainly worth pondering for all executive teams ....
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