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168 • Part III Principles from the Values and Social Dimensions

or help in preserving an endangered species of animals. Alternatively,
companies could allow their employees to work for charitable founda-
tions or other “good cause” organizations on company time. Or com-
panies could donate money after some kind of natural disaster. There
is an endless list of possibilities for a company to be involved in cor-
porate philanthropy. We already saw that influential thinkers such as
Friedman and Drucker frown upon these practices. Although by far in
most cases the costs for the organization are immaterial, the effort does
not create shareholder value. This doesn’t mean organizations should-
n’t do it. If senior management decides that it is important to support
certain good causes and the board approves, that is wonderful.
Strictly speaking, this approach to CSR does not really have an
impact on an organization’s performance management. It doesn’t pro-
vide any guidance for a company on how to improve its performance.
However, there is some intangible value, for instance, in improving an
organization’s employee satisfaction. Also, there is public relations (PR)
value in corporate philanthropy; it can help create a more positive
external perception of the organization. It makes strategic alignment
somewhat easier, as external perception is one of the elements of
alignment.

The Social Dimension for Managing Risks
The social dimension affects the organization because violating the
rules and needs of the social environment leads to risks. Allowing neg-
ative values, such as greed, opportunism, and egoism, to drive the busi-
ness is not good for business. If your business practices lead to
environmental hazards, that upsets citizens. Shareholders and other
suppliers of capital, such as banks, only want to be associated with a
clean business. Challenging regulators and government officials can
make corporate life very hard. There are pressure groups—with their
own agenda—that have an impact on consumer perception, which
then affects the business. A bad reputation, or a bad external percep-
tion, widens the alignment gap. And this is not restricted to the behav-
ior of the organization itself. Organizations rely on suppliers for creating
products and services, and rely on channel partners to sell products and
services. Their behaviors can have a negative or positive impact on the