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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  • Over a period of time, and already in developed economies, the difference between frontier and civil foundation seems getting blurred. (It is like an expected product becoming the core product over a period of time) In such circumstances, how should CEOs to be guided?

  • That is correct. That is the evolutionary component of the virtue matrix, a feature that is lacking in most CSR models. Today's frontier is tomo-rrow's foundation.In this respect, the CEO should be guided by the realization that he/she can change the world for the better for a long time if he/she

    initiates a successful frontier initiative that goes on to become a part of the society's civil foundation.

  • You have observed, "without a doubt, some companies are nearparagons of socially responsible behavior. They support worthy causes in the communities in which they operate." Why do you think not many/all companies follow this as a benevolent dictate? What do you think prevents them subscribing to such responsible behavior?

  • I think that it takes inspired, forwardthinking leadership and many corporations do not have anything resembling either inspired or forward-thinking leadership. However, such corporations can follow and their following makes a positive difference to society. The key, though, is to have something to follow and this is why the exemplary corporations are so important— others follow their lead. So their positive effect is magnified.

  • In the case of Malden Mills, Aaron Feuerstein could take such a benevolent decision owing primarily to the ownership structure? However, in a (highly) diversified holding company, how easy or difficult is it to enact such a decision-making?

  • I would agree that it is easier in a private company. However, I think that inspired leadership of a diversified public company can show its shareholders that good CSR is intelligent policy and this is why I wrote the virtue matrix and am continuing to work on simple but rigorous processes for creating a virtue matrix strategy. CEO's need help in making the case for CSR in a rigorous and clear way and the virtue matrix helps on that front.

  • From the Malden Mills (Aaron Feuerstein) example, is it correct to surmise that most of the times it is shareholders (in their aspiration for better returns) that scuttle CSR initiatives and therefore, corporates (leaders) are crippled?

  • That generalization is too dark for me. I would say that shareholders need a coherent and powerful story to be convinced of any major corporate investment, whether CSR or not. A CEO who can't formulate coherent and powerful stories will be crippled by shareholders regardless of whether he/she is dealing with CSR or a new product launch or the building of a new plant. A CEO who can formulate coherent and powerful stories will be able to do whatever he/she thinks is important to the corporation.

  • You have remarked that, "Thus, executives' commendable concern for their shareholders' wealth can sometimes stifle innovations in corporate social responsibility." How do you think the executives should resolve such a dilemma?

  • The most important thing for them to do is distinguish between the strategic and structural frontiers. Solo action in the structural frontier Interview 6 is what loses corporations money and credibility mainly because actions are doomed to failure. The CEO must distinguish when the corporation must partner with others for joint action (structural frontier) versus go alone (strategic frontier). If a CEO can make that distinction and invest accordingly the dilemma will be resolved.

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

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