By Owen Eagan and J. Gregory Payne
When people think of corporate social responsibility (CSR), most people likely think it originated as a moral imperative of good corporate citizenship or as a marketing tool for brand awareness and reputation management. However, though CSR has existed since the days of Carnegie and Rockefeller, it wasn’t until the 1960s that these programs became a trend. In fact, a strong case can be made that an oil spill off the coast of Santa Barbara in 1969 changed everything. In January of that year, a pipeline burst from a Union Oil Company drilling rig, causing an oil spill that reached the beaches of Santa Barbara, closed the harbor and killed numerous wildlife.
Extensive negative press, primarily from the LA Times, ensued criticizing then Secretary of the Interior Walter J. Hickel for his lack of responsiveness. A columnist for the LA Times even accused Hickel of being “in the pocket of the oil industry.” The 1960s were turbulent times to begin with and the public was becoming increasing distrustful of established authority. The culmination of these events led the Nixon administration to create the Environmental Protection Agency in December 1969. In the wake of such media scrutiny, public outcry and government regulation, a new wave of CSR programs were created. However, because these programs arose as reactions to crises, they were framed “in terms of threat, crisis, survival and reaction; rather than in terms of ethics, opportunity, competitive advantage and profitability.”
Even though CSR has evolved towards the latter, most programs still focus on the tensions that exist between business and society. That is, these programs tend to emphasize improving a company’s reputation and placating external audiences. This is especially interesting because, as Porter and Kramer have found, studies on the effect of a company’s social reputation on consumer purchasing or on stock market performance have been inconclusive at best. Instead, because successful corporations need a healthy society and a healthy society needs successful corporations, they recommend that business decisions and social policies follow the principle of shared value.
Porter and Kramer argue that the essential test for a CSR program is not whether a cause is worthy but whether it creates shared value for the business and society. To illustrate this benefit, they use a new framework for prioritizing social issues, which consists of three categories. The first is generic social issues, the second is value chain social impacts, and the third is social dimensions of competitive context. Using this framework, they claim that companies must move from responsive CSR to strategic CSR. That is, rather than simply acting like a good corporate citizen and mitigating impacts from business activities through responsive CSR, companies should integrate social dimensions into their value propositions. For instance, Nestle facilitated the development of dairy farms in India as a means of accessing that market and improving its value chain. And Microsoft’s Working Connections partnership with the American Association of Community Colleges allowed the company greater access to IT workers by helping community colleges develop IT programs.
When it comes to land use politics, there are myriad local organizations that seek corporate philanthropy from companies with a local presence. Companies receiving these funding requests should make their decisions using a framework that stresses strategic rather than responsive CSR. This will ensure the maximum benefit for both parties in this symbiotic relationship.
Owen Eagan is a Senior Consultant for The Saint Consulting Group, an international management consulting firm specializing in land use politics. He has an MA in Political Communication from Emerson College and an MBA from Pepperdine University. Dr. J. Gregory Payne is an Associate Professor at Emerson College, the nation’s only four-year college dedicated exclusively to the study of communication and performing arts. He has an MPA from Harvard University and a PhD from the University of Illinois.
 Robert E. Brown, “Sea change: Santa Barbara and the eruption of corporate social responsibility,” Public Relations Review,” 2007, 2-5.
 Michael E. Porter and Mark R. Kramer, “Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility, Harvard Business Review, 2006, 83-84.