Business Case Studies, Executive Interviews, Roger L Martin on Corporate Social Responsibility

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Executive Interviews: Interview with Roger L Martin on Corporate Social Responsibility
September 2007 - By Dr. Nagendra V Chowdary


Roger L Martin
Dean,
The Joseph L Rotman School of Management,
Toronto.


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  • You have remarked in your article, "they (corporate leaders) can, however, use the virtue matrix as a framework for assessing opportunities for socially responsible behavior." How does virtue matrix help in making such choices?

  • I think as I have specified above, it enables them to make distinctions between the kinds of CSR activities they can undertake, how they have to think about each and what they can expect from each.

    You observed in your article that, "It (civil foundation) is deep and robust in prosperous, advanced economies, whereas in poorer, less developed economies it is likely to be shallow and fragile". Why is it so?

    It is for two reasons. The civil foundation builds up over time in two ways. First, governments pass laws that compel corporations to behave in ways that are viewed to be beneficial for citizens of the jurisdiction. For example, a government may pass a law that requires better workplace safety standards in order that fewer workers get injured or killed on the job. In general, if you compare advanced economies versus developing economies, there are many more laws of this sort in advanced economies. Why? Because in developing economies, governments don't want to impose on corporations requirements that they cannot afford and would potentially drive them out of business. The same holds for pollution laws. In many developing countries, the pollution control investments that advanced country companies are required to make would be unaffordable for the developing country companies. For this reason, the compliance side of the civil foundation is, in general, deeper in advanced than developing countries—though there are undoubtedly exceptions to this.

    Second, corporations try initiatives in the strategic frontier. Some of them are successful and are copied by rivals who observe the success and in due course become part of the civil foundation. For similar reasons as above for governments, Interview 5 corporations in developing countries are typically not as well-positioned to make speculative investments in the strategic frontier so the flow of practices from the strategic frontier to the civil foundation are slower in developing countries than advanced ones, resulting in a shallower civil foundation—choice quadrant.

  • Instrumental vs Intrinsic. Are they mutually exclusive? Can they be integrated to produce better results?

  • No they are not mutually exclusive. Nor they are the same thing. A corporation can take an initiative for intrinsic reasons—leadership simply thinks it is the right thing to do and it will take the initiative regardless of the consequences—and then find much to its surprise that the corporation gets an economic pay-off for doing it.—i. e. it is also instrumental. That is the integration of instrumental and intrinsic, which is the essence of the strategic frontier. Alternatively, there may be no economic pay-off, in which case it will have been shown to be intrinsic but not instrumental.

  • Are the CEOs responsible for civil foundation (instrumental) or frontier (intrinsic)? Which one do you think can be better influenced by the CEO?

  • The buck stops at the CEO's desk so he/she influences corporate behavior and has the final say in all four quadrants. Having said that, many civil foundation decisions and processes are farmed out to other parts of the organization because they lend themselves to systemization of processes, while frontier activities need the CEO's more direct involvement to spur action. So I would say that the CEO's responsibility is to have rigorous and thorough processes in place to handle the foundation and to take personal leadership for the frontier.

1. Corporate Social Responsibility Case Study
2. ICMR Case Collection
3. Case Study Volumes

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