Page 177 - Performance Leadership

166 • Part III Principles from the Values and Social Dimensions

should we have it?”. In Drucker’s view, an organization is not entitled
to put itself in the place of government or to use its economic power
to impose its values on the community. Managers are not elected offi-
cials. But Drucker introduces one exception, which is when con-
tributing to easing a social problem creates an opportunity for
performance and results. This is when the management has or should
have the competence and authority.
Then there are the proponents of corporate social responsibility as
a goal by itself. Organizations have a moral obligation to society.
According to this school of thought, every organization needs to be
social and green. Profit is important too, but it is only one of the three
pillars of the triple bottom line: people, planet, profit. This nicely aligns
with the ISO definition mentioning the social, environmental, and eco-
nomic side of CSR. This view starts with the premise of the social
responsibility corporations have as part of society. And as every stake-
holder in society has responsibilities for the society, so do corporations.
This school of thought defines CSR as a necessity, simply a cost of
being able to do business. Environmentalists take this approach even
further. Corporations need to invest in saving planet Earth, regardless
of cost or loss of profit.
There are, therefore, two opposing schools of thought: some who feel
CSR should not be part of a management agenda, and those who
feel CSR is by default part of management’s concern.
Porter sharply analyzes the shortcomings of both schools of thought
because they focus on the tension between business and society rather
8
than on their interdependence. Running a business doesn’t exclude
being a good citizen. In fact these two objectives should be aligned.
Unfortunately, the way organizations are structured and the control sys-
tems that are put in place make it hard to recognize this interdepend-
ency. Organizations are typically structured as bureaucracies in
centralized or divisionalized forms. In the usual contrarian words of
Henry Mintzberg, as early as 1983: “The economic goals plugged in at
the top filter down through a rationally designed hierarchy of ends and
means . . . [the] workers are impelled to put aside their personal goals
and to do as they are told in return for remuneration. The system is
overlaid with a hierarchy of authority supported by an extensive
network of formal controls. . . . Now, what happens when the concept