Abstract
Argandoña, professor at IESE Business School, Barcelona, analyzes the main traits of Corporate Social Responsability (CSR), showing that they are compatible with the encyclical Caritas in Veritate. He understands CSR as an ethical and not merely social responsibility, centered in the human person and thus deriving not from abstract principles but from decisions made by the economic agents in business firms. These decisions are based upon the well-educated conscience of the individual as well as upon objective rules, including the nature of the good intended in the action and on the circumstances of time and place. An ethical conception of CSR requires the exercise of virtues in the firm. The author underscores two virtues: justice and love, which he considers to be more than mere philanthropy. The proposed conception implies a real effort of the managers and their organizations to build the common good.
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Notes
- 1.
This study is part of the activities of the “la Caixa” Chair of Corporate Social Responsibility and Corporate Governance at IESE Business School.
- 2.
CSR is sometimes presented from other angles, which are superposed on those mentioned here. For instance, people talk about descriptive CSR (how companies actually behave in relation to their social responsibilities), normative CSR (how they should behave), and instrumental CSR (what tools they have at their disposal). Cf. Donaldson and Preston (1995).
- 3.
I do not propose to extend the scope of this study to other documents of the Church’s social doctrine, which will be referred to only marginally in what follows.
- 4.
This point of view is not widely shared: “many people today would claim that they owe nothing to anyone, except to themselves” (Benedict XVI 2009, 43).
- 5.
Corporate social responsibilities would presumably differ from that set of moral responsibilities in that they would be publicly and formally assumed by the company in the eyes of society (hence their designation as “social responsibilities”), which would entail commitments of transparency, disclosure, accountability, etc. Argandoña (2008), Argandoña and Weltzien-Hoivik (2009).
- 6.
For an extensive list of definitions of CSR, see Mullerat (2010).
- 7.
This is not the place to analyze why many authors do not emphasize the ethical nature of CSR, a subject that has not been tackled in the literature. For some, CSR is a “watered down” alternative to business ethics, which is seen as an advantage, as it avoids the need, on the theoretical plane, for a solid moral foundation as well as the challenges that putting it into practice would entail. For others, CSR is a technical management tool that has been humanized through the introduction, from outside, of certain restrictions on what a company can and must do to maximize its profits, in the form of social action, good environmental practices, human resources policies, voluntary self-restraint, etc. Lastly, for yet others, ethics is no more than a set of social conventions or norms that change over time and geography, so that companies merely need to know what society expects or demands and act accordingly in order to avoid problems (acquire social legitimacy) or be successful, based on a cost-benefit analysis.
- 8.
If CSR is established on incorrect ethical principles, it will lead to perverse outcomes, which also occur when it is demanded that the economy not be subject to morals (Benedict XVI 2009, 34). That is to say, CSR cannot be morally neutral.
- 9.
In the same way as “it was not just a matter of correcting dysfunctions [of the market] through assistance [to developing countries]” (Benedict XVI 2009, 35), Benedict XVI clearly would not accept a conception of CSR as a means of validating ethically inappropriate behavior through philanthropic activities or social action.
- 10.
The encyclical does not refer to stakeholder theory, but enumerates the parties most commonly included in this theory (Benedict XVI 2009, 40). Although the Pope states that “business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business” (Benedict XVI 2009, 40), he is not, it seems to me, saying that the purpose of companies is to create value for all stakeholders or to serve stakeholders’ interests. He is merely quoting the position of certain authors, which seems compatible with the view that Benedict XVI expresses elsewhere in the encyclical regarding the purposes of companies, and which in any event requires that the interests of all concerned be taken into account.
- 11.
Proprietors, investors, entrepreneurs, and managers are the agents mentioned in paragraphs 40 and 41 of CV insofar as they are responsible for decision making in organizations. By proprietors, Benedict XVI seems to mean the people who hold or share ownership of companies and are responsible for managing them; the encyclical laments, for example, that “it is becoming increasingly rare for business enterprises to be in the hands of a stable director [owner] who feels responsible in the long term (…), for the life and the results of his company” (Benedict XVI 2009, 40). The law gives investors the right of ownership of companies and thus also the power to make ultimate decisions, appoint managers, and control the economic surplus; the Pope recalls, for instance, that “investment always has moral, as well as economic significance […] What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise [and] its benefit to the real economy” (Benedict XVI 2009, 40). Entrepreneurs are those who carry out the “business enterprise” (Benedict XVI 2009, 41), i.e., who create start-ups, in the various forms the encyclical recognizes. And managers make decisions in the name and on behalf of the proprietors; the encyclical laments, for example, that “a new cosmopolitan class of managers has emerged, who are often answerable only to the shareholders, generally consisting of anonymous funds which de facto determine their remuneration” (Benedict XVI 2009, 40).
- 12.
- 13.
The concept of sustainability that underlies the encyclical, both at firm level and at country or global level, is not exclusively ecological. Many authors prefer to talk about economic, social, and environmental sustainability rather than CSR, perhaps because sustainability is, or at least appears to be, more specific, or because it is further removed from moral interpretations (which make some people uncomfortable), or because it lends itself more readily to the use of instruments (measurement, audit, reporting, etc.). The treatment of environmental problems in Caritas in Veritate (Benedict XVI 2009, 48ff) is much broader and less deterministic than most other analyses.
- 14.
Like other documents of Catholic social teaching, the encyclical states clearly that “economic action is not to be regarded as something opposed to society” (Benedict XVI 2009, 36); if on occasion “the market can be a negative force,” this is “not because it is so by nature, but because a certain ideology can make it so. […] It is shaped by the cultural configurations which define it and give it direction” (Benedict XVI 2009, 36). Cf. also John Paul II (1991, 42).
- 15.
The author has dealt with this subject in Argandoña (2010).
- 16.
- 17.
The encyclical offers some suggestions for international development programs which, by analogy, are applicable to CSR programs. For example, “solutions need to be carefully designed to correspond to people’s concrete lives, based on a prudential evaluation of each situation” (Benedict XVI 2009, 47), etc.
- 18.
Environmental protection, for instance, is a responsibility of companies, but also of their customers, suppliers, employees, managers, and owners. It will be the company’s task to identify and specify the environmental duties that fall within its responsibility, but the company will also need the participation and involvement of all in order to perform those duties.
- 19.
The encyclical contains a very brief reference to the “charitable and educational activities” of the Catholic Church, but points out that the Church’s public role is far more ambitious (Benedict XVI 2009, 11). In Deus caritas est, the references to the Church’s social support activities are more extensive (Benedict XVI 2005, 19ff).
- 20.
In paragraph 35, it is stated that “without internal forms of solidarity […], the market cannot completely fulfill its proper economic functions” (Benedict XVI 2009, 35). These “internal forms” of solidarity obviously cannot refer to philanthropy.
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Argandoña, A. (2012). Corporate Social Responsibility in the Encyclical Caritas in Veritate . In: Schlag, M., Mercado, J. (eds) Free Markets and the Culture of Common Good. Ethical Economy, vol 41. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2990-2_13
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