Spirituality in the Workplace: Dealing with a Dysfunctional Culture

Mohan Vilas, a Hindu monk at Govardha Ecovillage, spoke at Harvard’s Bhakti Yoga Conference in 2025. He had gone from the world of financial derivatives to worshipping Krishna. Once he had fulfilled his “lower needs,” he looked for more. After obtaining a M.B.A. and while working in finance, he was hungry for knowledge beyond the world of business. So he studied ancient Vedic culture. His talk at the conference was on being an idealist surrounded by strategists. He addressed the question of whether the world allows individuals to practice virtue. Even when a person is not in a dysfunctional workplace or in a hostile society, the human mind struggles, Vilas said, to apply ethical virtues. Plato’s dictum that to know the good is enough do the good, and thus to be good, may be wildly optimistic, considering the instinctual force of urges in our nature to act immorally, even though other people are harmed as a result. It is even more difficult to get into a habit of doing good while “swimming upstream” in an ethically compromised workplace or an aggressive societal culture. An ethical Russian or Israeli soldier in the mid-2020s, for example, would have a lot of trouble refusing to bomb hospitals in Ukraine and Gaza, respectively, and, moreover, invading another country and withholding food so to starve an occupied group. Such a soldier would be intolerable to both Putin and Netanyahu, respectively. Vilas’s question is the following: What happens when a person who is good is put into a selfish society? Must an ethical person finally inevitably exit a culture that rewards narrow selfishness, passive-aggression and deception?

The full essay is at "Spirituality in the Workplace."

A Hindu Business Ethic

Applying a religion such as Hinduism to business is laudatory. Undercutting any benefits of doing so, however, is the advocation of religious principles that are so unrealistic in the business world that they undercut the credibility of the project itself. John D. Rockefeller was a Baptist who taught Sunday school at his church even as he pushed competitors out of business who refused to be bought out by Rockefeller’s refining monopoly, Standard Oil Company. To be sure, after retiring, he gave away about half of his $800 million (1913 dollars), but he did not claim that his personal generosity justified his earlier restraint of trade as a monopolist. Rather, he claimed to be more of a “Christ figure” as a monopolist than he was next as a philanthropist. In my study on Rockefeller, I concluded that he was delusional, yet to some extent well-intended, given the destructive competition that was ravaging small businesses in the refining industry during the 1860s. Rockefeller thought of his giant as saving the otherwise presumably drowning competitors, but Jesus in the Gospels does not drown people who are unwilling to be converted. Clearly, the application of religion to business can be abused, including in being much too idealistic, even utopian, and in being used to justify egregious economic tactics and even greed itself.

The full essay is at "Hinduism Applied to Business."

On the Birth of Corporate Social Responsibilty in 1869

Referring to the speculation in gold that was engineered by Jay Gould and others in 1869 to enrich themselves and the Erie Railroad, Henry Adams (1838-1918), a grandson of John Quincy Adams and great grandson of John Adams, wrote at the time:

“For the first time since the creation of these enormous corporate bodies, one of them has shown its power for mischief, and has proved itself able to override and trample on law, custom, decency, and every restraint known to society, without scruple, and as yet without check. The belief is common in America that the day is at hand when corporations far greater than the Erie [Railroad] — swaying power such as has never in the world’s history been trusted in the hands of mere private citizens  . . . — will ultimately succeed in directing government itself. Under the American form of society, there is now no authority capable of effective resistance.” (1)

Gould had wanted the price of gold to rise not only because he had bought some to sell at a higher price, but also because as a stockholder of the Erie, he would benefit from the railroad transporting more wheat from the Midwest to the east coast for export. A higher price in gold meant a lower dollar. Wheat being based in dollars, a lower dollar meant more exports. The strategy was essentially to devalue the dollar, which Gould assured President Grant would be in the national interest economically. As the price of gold rose to $165 in 1869, Grant, fearing a bubble, pulled the plug by having the Treasury sell $4million in gold.  The collapse in the gold market triggered a drop in the stock-market. Even if it might have been in the short term interest of the speculators and railroads, the manufactured bubble was not in the national interest after all. Gould’s bribes of administration officials had been in vain.

Henry Adams saw the imprint of corporate power eviscerating both societal norms and democracy in the scandal.  In other words, the new-found corporate power eventuated in the birth of the need for corporate social responsibility amid capitalism eclipsing democracy. In academic terms, corporate social responsibility and (corporate) business & government, although discrete fields, were both first publicly recognized in 1869.

The corporate power occasioning Adam’s recognition was a novelty at the time, according to Brands, because the large corporation had only come into being as the railroads incorporated in the 1850s. Looking back after the Civil War, Henry Adams observed, "The last ten years had given to the great mechanical energies — coal, iron, steam — a distinct superiority in power over the old industrial elements -- agriculture, handwork, and learning." (2)  The power of steam in particular translated into large, publicly-held, corporations first in the railroad industry.

On account of their size and scope, and the associated equity capital requirements given the risk faced by lenders, the railroads were the first large American corporations to be publicly traded. The diffusion of ownership — a consequence of the large capital demands — led to a separation of ownership from control and to a new ownership interest: that of the short-term-oriented speculator. A short-seller, for example, seeks lower corporate earnings in the future, while a long-term investor hopes for higher dividends, and thus profits. Managers can exploit this difference in order to pursue their interests in the name of the corporation at the expense of societal norms and democratic governance.

Undergirding the managerial basis in skill, the railroads were the first companies to develop the methods of corporate administration. For example, there were supervisors over supervisors—in other words, multilayered organizational charts. Furthermore, dovetailing with the need for safety and efficiency (given the competition), the railroads developed precise management of their operations, including the development of standards for measuring performance. In short, the railroads were the first to develop a cadre of managers specialized in administration in the particular industry. (3)

Regarding the private power based on technique (i.e., managerial power), Henry Adams announced in 1869 that there was no authority, whether in society or government, capable of resisting it. The normative call for corporate social responsibility and the political call for a resurgence of democracy amid the encroaching capitalism were born. In other words, with great power came a recognition of a need for great responsibility. The corporate social responsibility movement began as precisely this recognition even as the modern large corporation was in its second decade.

Punctum Saliens, the large corporate type of commercial organization itself is inherently powerful relative to societal norms and even potential governmental or regulatory restraints. That is to say, the invention of the large corporation may have been inherently problematic, essentially involving systemic risk to the republic itself on account of the private power of the managements. To paraphrase Nietzsche, power cannot be but powerful. To unleash an inherently powerful feeding machine and expect it not to eat the grass is naive, if not patently irresponsible. To expect the managements of extremely wealthy corporations to be willingly socially responsible when their economizing and power-aggrandizing nature is to run through such non-constraints is simply ideological, if not fanciful. Fundamentally, the problem with corporate management is its inherent proclivity to bristle at any external constraint. It is the underlying maximizing egoism that is innately antithetical to the limiting natures of government regulation and corporate social responsibility.

Endnotes:

1. Henry Adams, “The New York Gold Conspiracy,” in Charles F. Adams, Jr. and Henry Adams, Chapters of Erie (Ithaca: Cornell University Press, 1956), pp. 135-36.

2. Henry Adams, The Education of Henry Adams (1907; Boston: Houghton Mifflin, 1961), p. 238.

3. H. W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), pp. 22-23.

Starbucks: A Racist Company Against Racism

In June, 2023, Starbucks had to face a unanimous jury decision in favor of a regional manager whom Starbucks' upper management had fired because she had resisted the company's racist policy of punishing innocent Caucasian managers for good public relations, which the CEO felt was needed and appropriate after a store manager had legitimately called the police on two Black people in a Starbucks restaurant who presumed the right not only to sit in a restaurant without ordering anything (before Starbucks allowed this),  but also to ignore the authority of the store's manager. Starbucks cowered to the unjust negative publicity, and thus showed a lack of leadership, and went on to act unethically in wanting to show the world that the company can go after Caucasian employees. This racism is ironic, for several years earlier, Starbucks' CEO had ordered employees at the store level to discuss racism with customers. Interestingly, the anti-racist ideology being preached was partial, and thus contained a blind spot wherein racism such as the company's upper management would exhibit is acceptable. 

As the CEO of Starbucks, Howard Schultz had employees promote his political ideology on two social issues: gay marriage and race. Regarding the latter, he ordered employees, whom he artfully called partners, to write race messages on cups so customers would unknowingly enable employees to impart Schultz’s position on the issue by raising the topic. I assume that the employees could not begin such conversations. I have argued elsewhere that Schultz’s use of the employees for such a purpose was not only extrinsic to making coffee as per the employees’ job descriptions, but also unethical.[1] In terms of corporate governance alone, the shareholders, as the owners of the company, should have decided whether to have their company used to promote partisan positions on social issues. In 2023, Target and Budweiser would learn of the perils in wandering off the knitting to get political on social issues. In terms of jurisprudence, the “right” of a company, a legal entity, to have free speech is dubious, as abstract entities, even if legally recognized as such, are not human beings. Rather, the “free speech” claimed by companies is really that of the human beings who work for the companies. Using an abstract entity that itself cannot speak to gain additional publicity for one’s ideological views is unfair because the vaulted or amplified speakers are not so from a democratic standpoint. In short, why should Howard Schultz have access to a megaphone and employees to propagate his political ideology on social issues, when you and I have no such means of self-amplification? Whether we agree or disagree with the former CEO’s political ideology on race is not relevant to my point. To be sure, that his employees were told to speak against racism is in my opinion much better than had they been told to advocate racism against Black people. That Starbucks would then engage in racism is that much harder to understand, but perhaps the hypocrisy reflects a hidden negative aspect of Schultz’s ideology on race. American society could benefit by having that aspect uncovered; such a benefit vastly outweighs any benefit to business. Even in a pro-business culture, a lower good should not be put over a higher one. Aristotle refers to this error as misordered concupiscence.

In June, 2023, a jury in New Jersey “found in favor of former Starbucks regional director Shannon Phillips, who sued the company for wrongfully firing her, claiming she was terminated for being White.”[2] The company’s position was that Phillis’ boss fired her because she had displayed weak leadership. The use of such vague jargon as leadership for what is actually management is itself problematic. Even if Phillips had “appeared overwhelmed and lacked awareness of how critical the situation had become,” as her boss presumably had written, does not constitute weak leadership, for she was not in a leadership role[3]; instead, the company’s CEO should have got out in front of the issue and provided a vision for the company.[4] If Schultz was the CEO at the time, the failure of his leadership would be especially telling, considering his earlier foray into politics using the company to promote his ideology.

The triggering incident that had overwhelmed Phillips, according to her boss, whom the CEO at the time must agree in retrospect failed as a supervisor but presumably was not fired, involved two Black men who had refused to leave a Starbucks store in 2018 even though they would not purchase anything. They were thus not customers, and the incident occurred before the company allowed non-purchasers to be in the stores. That the two Black men refused to leave the company’s private property means they were trespassing, so the store manager was on solid legal grounds in having the local police remove the men from the store. Being Black, even if that race has been (and is) subject to racism generally, does not give a person the right to trespass on private property, and efforts to remove such trespassing is not racist, for anyone trespassing would be legally subject to removal from the property. 

I contend that Howard Schultz’s notion of racial reconciliation suffers from the weakness of being blind to the racial presumption displayed by the two Blacks. In having employees talk about the need not to be racist to customers, Schultz was assuming that racism is something that non-Blacks do to Blacks. Employees were not told to suggest to Black customers that being Black does not give them special exemptions from the law or in society. Schultz could have had employees suggest to Black customers that jay-walking between intersections in a major street even if cars are coming is not “a Black thing” that is justified because the race in general has been subject to discrimination. Furthermore, the use of the word, nigga, cannot be allowed only if the speaker is Black, for that would be a racist position. For a Black person who uses the word to become hostile or aggressive towards an Indian, Oriental, or Caucasian who also uses the word is itself racist (and of course the hostility is unjustified unless the related word nigger is used in a hostile manner). The U.S. Constitution does not indicate that free speech depends or is limited by race; such a clause would be prime facie racist.

Phillips’ complaint, which the jury accepted unanimously, states that following the arrest of the two Black men, Starbucks “took steps to punish White employees who had not been involved in the arrests, but who worked in and around the city of Philadelphia, in an effort to convince the community that it had properly responded to the incident.”[5] Phillips was ordered “to place a White employee on administrative leave as part of these efforts, due to alleged discriminatory conduct which Phillips said she knew was inaccurate. After Phillips tried to defend the employee, the company let her go.”[6] It does not sound like Phillips was overwhelmed; in fact, she was being pro-active and ethical in defending an employee from an unjust punishment. The implication is that the person who fired Phillips acted unethically.

Moreover, in being willing to sacrifice Caucasian employees based on their race for good public relations, the company’s upper managers were being racist. An unseen implication is that those managers believed that the public reaction against the company for having the two Black men removed from the store in Philadelphia had some validity—that Black people should not be treated like that or that Black people deserve special treatment due to their race. But such a belief is itself racist. Schutz’s talking points for his employees to discuss with customers on race did not include mention of the racism in such beliefs. Moreover, he did not have the company’s employees talk about racism by Black people stemming from resentment. Any ideology is partial, rather than whole, and even claim of being against racism can fall short. In going after Caucasian employees, including Phillips, Starbucks’ upper managers fell short; the failure of leadership ultimate belongs to the CEO at the time. At least at the time of the trial, Howard Schultz was the CEO.

---

1. Skip Worden, Bucking Starbucks’ Star.

2. Danielle Wiener-Bronner, “Starbucks Ordered to Pay $25.6 million to a Manager Who Says She Was Fired for Being White,” CNN.com, June 14, 2023.

3. Ibid.

4. Skip Worden, The Essence of Leadership.

5. Danielle Wiener-Bronner, “Starbucks Ordered to Pay $25.6 million to a Manager Who Says She Was Fired for Being White.

6. Ibid.

A Professional Misnomer: Everyone Is a Self-Proclaimed Professional!

Certainly by the turn of (and well into) the twenty-first century, the term, "professional" had become such a cherished word in the American lexicon that every American had decided that he or she is one. Evincing the Lake Wobegon effect—the tendency of most people to describe themselves or their abilities as above average—nearly everyone is wont to say, “I am a professional.” On housing listings on Craigslist, for example, people routinely use the word to signify that they are not students. In fact, even some students characterize themselves as professionals (though not as professional students!). Such common usage belies the term's claim to having a specific meaning. Moreover, the tendency of non-professions to deem themselves as professions nonetheless may evince one of the downsides of democracy—namely, its proclivity to excess in terms of self-entitlement. This is particularly likely to ensue from a citizenry that is lacking in self-discipline, virtue and knowledge. 

I contend that the self-appellation of “professional” is in actuality an attempt at inclusion in what was hitherto known as “the professional class.” Nietzsche’s thesis is relevant regarding the instinct of certain herd animals to dominate as if they were strong—even though they are in fact weak. 

It is as though a manager at Walmart imagines a concept of egalitarianism wherein he is akin to a lawyer or surgeon—perhaps based on the fact that the manager distinguishes himself somehow from his subordinate “employees.”  Even in the midst of such self-vaunting, a knowledge of store policies and years of practice in dealing with customer complaints do not constitute an equivalent to the knowledge of law or medicine required of a lawyer and physician, respectively. Nor is there an obligation to the public such as in entailed in the practice of law or medicine.

Technically, the term "professional" applies to “the professions.”  This does not mean “any profession” in the sense of “any job category.” Because a professional relies on years of study, albeit undergraduate (meaning only one degree in a discipline/school of knowledge), in his or her practice, he or she must be allowed significant autonomy. Hence the partnership arrangement, wherein the self-discipline of peerage rather than a boss is relied on, is the typical business form for law firms, CPA firms, and medical offices. Managers in business are not professionals. This can be seen both from the standpoint of the relative salience of a responsibility to the client/customer and of judgment.

According to Relson (p. 750), “the basic social role of the physician . . . is to be an agent and trustee for the patient. Physicians are ethically bound to place the medical care needs of their patients before their own financial interests – an obligation that clearly sets the practice of medicine apart from business.” One could add a lawyer's ethical obligation to act in the interest of the client and the CPA's obligation to act in the interest of the public (people who rely on the financial statements). In business by contrast, "buyer beware" is often the default; a business practioner serves a customer for monetary gain.

Similarly, the judgment of a lawyer, physician or CPA is not easily second-guessed by people outside of the respective profession. Even in a hospital, a physician is not reviewed by a manager who is not also a physician. In contrast, non-managerial board directors commonly review the performance of managers.

Put another way, whereas one can manage a business without having attended business school, I do not think any of us would agree to be seen by a physician who had not graduated from a medical school. Nor would a defendant in a criminal case be likely to chance a conviction (and decades in prison) by hiring a lawyer who had not studied law. Creditors and investors would think twice about the unqualified opinion of a CPA firm whose auditors had not passed the CPA exam after years of study of accounting.  That a certified public accountant might also engage in consulting, however, does not mean that consultants are thereby also professionals. Even were consultants to devise a certifying exam, it would not be as substantive or relied on as the lawyer bar exam, medical boards, and the CPA exam.

According to John Boatright (2008), the "work of most financial services providers does not meet the standard criteria for a profession. Among the criteria for a profession which are lacking in financial services are a high degree of organization and self-regulation, a code of ethics, and a commitment to public service. These criteria are possibly met by financial planners and insurance underwriters, but not by brokers, bankers, traders . . ., who, in the strict sense of the term, are not professionals." Financial planners and insurance underwriters come up short, however, in terms of educational requirements. 

According to Boatright (1992), a professional’s stock in trade is a body of specialized knowledge that is the basis for making judgments. Not only is the reliance placed on a professional’s judgment relatively important; professionals are paid primarily for the value of their knowledge that is the basis for their judgments. Accordingly, it is difficult, if not impossible, anyone other than their peers to evaluate their practice.  In fact, Jean Van Houtte (p. 207) refers to professionals as “individuals who practice their occupation autonomously.” Even another surgeon is limited in being able to second-guess a colleague without being in the operating room at the time. The salient element of judgment includes discretion that is difficult for even colleagues to evaluate (though not impossible); obvious lapses, for example, can easily be discerned by a professional’s peers. 

In short, the term "professional" has a specific and limited meaning centered on the responsibility-autonomy that is entailed when specialized-knowledge-informed-judgment is salient in the practice of an occupation. The term does not apply to anyone who does something for a living (as opposed to being an avocation).  If it did, then even prostitutes and politicians would be professionals.  The term “professional politician” connotes ignorance, for which political office is not a job?  It is not like one can be governor of Alaska as a hobby. Also, neither "mature" nor "responsible” is interchangeable with “professional.” Nor does the term mean “acting impersonally or bureaucratically rather than emotionally.” It is no accident that people not in one of the professions use notably wide criteria.

Until the last few decades of the twentieth century, the term "professional" did not suffer from such lack of clarity. For example, Joe Flom, who was instrumental as a lawyer in the hostle take-over bubble that began in the 1970s, claimed that his parents wanted him to be a "professional." He wrote that for them, "being a professional was a great thing. . . . That meant either a doctor or a lawyer." This was the popular application: medicine or law--not a manager or sales person, or even a CEO. Then a sort of inflation set in, and the value associated with being a “professional” has diminished in proportion. The presumption that simply getting hired or being mature on the job makes a person a professional is odious and false. In fact, the over-reach itself evinces an underlying sordid character. Ironically, such a person is in need of more supervision, rather than warranting any sort of autonomy. 

Sources:

Jeff Madrick, Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present (New York: Alfred A. Knoff, 2011).

John R. Boatright, “Conflict of Interest: An Agency Analysis.” Pp. 187-203 in Ethics and Agency Theory: An Introduction, Norman E. Bowie and R. Edward Freeman, eds. (Oxford: Oxford University Press, 1992).

John R. Boatright, Ethics in Finance (Oxford: Blackwell, 2008).

Arnold S. Relman, “Dealing with Conflicts of Interest,” New England Journal of Medicine 313 (1985): 749-51.

Jean Van Houtte, “Research Report: Conflicts of Interest in Law Firms in Belgium,” Legal Ethics 12 (part II): 207-28.

See also:

Skip Worden, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management.

Business & Society and Business Ethics: Two Distinct Fields of Business

As a field of business, business and society (which includes the topic of corporate social responsibility (CSR)) can be viewed as falling within the rubric of the environment of business. Business and government can as well. Indeed, the environment goes beyond stakeholders. Although sometimes deemed as falling within this rubric, business ethics actually does not, as it is internal to a business even as unethical policies and decisions can impact stakeholders. In fact, business ethics and business and society are two distinct fields, even though they share a common border and are often fused as if they were one seamless country.

That some of the CSR literature applies ethical principles to CSR does not mean that describing or analyzing differences between the norms, values, and cultural attitudes and practices of a culture and those of a business involves ethical reasoning from ethical principles. As David Hume pointed out, you can’t get should from is. Going from a current state of affairs to what should be involves ethical reasoning. To obviate such reasoning based on ethical principles and simply say that something that exists should exist is to fall prey to the naturalistic fallacy.

So to claim that a corporation’s culture should be more in line with the society’s overall culture requires more than describing the two cultures and how they differ, as well as analyzing how the differences impact business as well as the wider society and providing suggestions as to how a corporation can move closer to societal norms, values, and mores. To go on to how things should be, reasoning a priori from ethical principles is necessary. That is, once the question of whether an extant, descriptive difference should exist is brought up, the business field of business & society is left behind and the philosophy field of ethics and the business field of business ethics are entered. 

Specifically, the philosophical field applies to ethical questions that go beyond the business side of the equation, whereas business ethics applies to whether a management or corporation should change to be more in line with societal norms, values, and/or mores. This question lies beyond the field of business and society because ethical principles rather than sociological, anthropological, or management theory are necessary. Organizational and societal norms, values and mores fall within the basic (not applied) disciplines and sociology and anthropology. Ethical principles and ethical reasoning fall within philosophy. Sociology and anthropology are social sciences, whereas philosophy is in the humanities. Treating the field of business and society as if it were synonymous with business ethics conflates two social sciences with a field in the humanities.

Tension between Wall Street and Main Street: A Case beyond the Reach of Corporate Social Responsibility

In October 2011, Gerald Seib wrote that political and economic pressures in the wake of the financial crisis were “pushing business leaders into the public cross hairs.”[1] I submit that the very existence of the largest American banks was becoming an issue. In such a case in which a gulf between business and society is so fundamental or deep, corporate social responsibility programs do not suffice and may even backfire. While it is normal for the norms and values of a business sector to differ from those of the wider whole (i.e., society), it is uncommon for a rupture to be so deep that corporate marketing and CSR are not sufficient business responses. I submit that in such cases and where corporations have a lot of power over government officials, CEOs extend their toolset to government to fill in the trench. The "Occupy Wall Street" protests is a case in point. 

From the corporate standpoint, the time was ripe for the field of business and society, whose topics include corporate social responsibility, corporate citizenship, and stakeholder management. The fundamental matter to be “managed,” or assuaged, in that field of business concerns divergent norms as well as values between the individual corporations or the business sector and the wider society. Tension is not always or invariably present, but the fact that a corporation and even the business sector is a part of a wider whole (i.e., a society) suggests that the respective interests, perspectives, norms, and values are likely to differ. Generally speaking, the interests of a part are not identical to the interests of the whole of which the part is a subunit or part. An externality such as from dumping chemicals in a river or polluting the air means that a company's interest, norms, and values can differ from those of a society. 

Self-interest can obviously affect norms and values. A powerful corporation's executives and board may believe that the company's power over members of the U.S. Congress is normal and right because such dominance is in the corporation's financial interest. Meanwhile, voters may feel that such a distended dominance by the moneyed interest harms democracy and is thus a norm that should not exist. 

According to Seib, societal populists and corporate executives were not on the same page in 2011. In as much as the executives were utilizing corporate social responsibility to create the impression that the corporate norms and values being espoused were in line with societal norms and values, the field of business and society may not have been equipped to deal with divergent talking points that are grounded in antipodal, or antithetical, social realities. In short, corporate social responsibility as marketing or "window-dressing" can be detected as fake, thereby increasing the rift rather than reducing it. Indeed, it can be said that the topic began as an ideal  to bridge the gap between corporations and societies only to end up in marketing.[2] Foisting the illusion of convergent corporate and societal values can backfire by illuminating boardrooms as places where only a narrow perspective of short-term profit pervades.

In the context of the “Occupy Wall Street” protests spreading across the U.S. during the Fall of 2011, Seib pointed to the existence of “a radical disconnect between the picture populist critics paint from the outside, and the one business leaders describe from inside.”[3] This disconnect had gone back to September 2008, when bankers viewed the collapse of the housing market (and those of related financial products, such as CDOs) as a result of over-reaching, dishonest and languid mortgage borrowers. 

Meanwhile, the wider society saw greedy and fraudulent mortgage originators and investment bankers behind the adjustable-arm steep mortgages and the "crap" bonds that were based on those risky mortgages. This disconnect infuriated the general public, especially because contrition would not come from Wall Street. Greed refuses any constraint, including even acknowledging even some responsibility. Banks would engage in mass foreclosures without a hint of guilt for having misled people into going for oversized houses. The mortgage producers at Countrywide and other companies conveniently made the bad assumption that a few years of mortgage payments would enable the mortgage borrowers to shift from step-wise increasing-rate to fixed 20-year mortgages so as to avoid the higher interest payments. This flawed assumption was no doubt helped out by the fact that more mortgages would be sold, and thus higher bonues received. The interest of the economy, not to mention society as a whole, was of lesser concern. Hence the clash in norms and values between the part and the whole. 

In the populist protests, the crowd also saw American companies with enough profit and cash to create jobs domestically yet without the will to do so. In the first decade of the twenty-first century, American corporations had cut their work forces in the U.S. by nearly 3 million, while increasing employment abroad by almost 2.5 million. In the fall of 2011, Standard & Poor predicted corporate earnings growth of 13.5% for the third quarter, which, according to Seib, suggested “to Wall Street protesters that companies were hoarding profits without creating work.”[3] Saving money by moving factories "off shore" fits the business value of efficiency, and even the maxim in trade that goods should be produced where doing so is cheapest (e.g., where the goods are most plentiful). The cost of such a norm of and value on going abroad is externalized to the host country, which is left with the impaired social contract between a large corporation and the society. 

Generally speaking, a government says, in effect, to a company: We'll let you incorporate and even expand into multinational corporations but we expect you to provide jobs in addition to benefiting your customers with goods and services. This version of the social contract that includes the obligation to provide as many jobs as possible (i.e., while still allowing for a reasonable profit, and thus dividends) is controversial, however, because CEOs could retort that providing goods and services that reduce suffering and increase happiness is sufficient. From a utilitarian standpoint, therefore, such CEO's could even claim an ethical justification. Such a justification would likely merely be marketing to craw back some of the lost reputational capital, a long-term intangible asset. 

According to Seib, business leaders cited more practical factors that more easily fit into the traditional business calculus. From the business perspective, third-quarter expectations were less than expected. The managers pointed to the benefits of an artificially weak dollar that had already strengthened at the expense of exports. More broadly, businesses were looking at weak consumer demand and increasing costs with government regulations, which make augmenting the domestic work force more costly. Seib juxtaposes this business view of a hostile business environment with the societal view that looked angrily at unpatriotic and greedy corporate chieftains. 

I submit that when a divide is so gaping, depating the factors in the business environment doesn't fit. Corporate social responsibility programs, such as having employees volunteer at soup kitchens, are not restorative. Firstly, the benefit from such programs would not come close to the original costs borne by society from the reckless and even fraudulent banking practices. Secondly, the people hurt from those practices are not necessarily helped by a program. This is especially true if the "restorative" program in oriented to another society problem, such a disease. Thirdly, corporations benefit from the good public relations from a CSR program. An angry populist is not likely to be pleased that one of the selfish, reckless banks is actually benefiting as it makes contrition. Fourthly, the gap between the business sector (or an industry, but not likely an individual company) and a society can be so deep enough that capitalism itself is severely questioned at large. Filling in such a deep trench goes beyond what CSR can do; a bulldozer rather than some shovels are needed in such cases. I contend that the "Occupy Wall Street" protests that took place three years after the financial crisis deepened or perhaps only exposed such a trench. I suspect this is why the U.S. Government, which was refusing to hold mortgage producers and investment bankers criminally accountable for the fraud--protecting the powerful financial sector--took an active role in stopping the protests. To have the very legitimacy of corporate America, or even just the banking sector, even questioned in such a public way was likely too much for a government whose elected officials could receive unlimited campaign contributions. 

1. Gerald F. Seib, “Populist Anger Over Economy Carries Risks for Big Business,” The Wall Street Journal, October 11, 2011. More generally, see Skip Worden, Essays on the Financial Crisis.

2. William C. Frederick, my doctoral professor in the field of Business & Society, came to this conclusion, as did I. When upon retirement from teaching he turned to the application of the natural sciences to economizing and power-aggrandizement in relation to societal "ecologizing" forces, and then to management, I truly became one of his students (for twenty years). I gave a conference paper, for example, on how a company could be run on ecologizing rather than profit-maximizing principles. The field of Business & Society is indeed wider and more abstract than the CSR topic. 

3. Seib, “Populist Anger Over Economy Carries Risks for Big Business.”

CSR and Corporate Governance Reform: An Opporunity for BlackRock as an Activist Shareholder

In 2019, BlackRock’s management and board publically fired two executives in the Hong Kong office for breaching company rules on dating subordinates. The firings demonstrated to employees that the company would enforce its employee policies and sent the message that employees would be “free to point out problems in the workplace.”[1] This would not be so extraordinarily significant but for the fact that BlackRock is the “world’s largest money manager with $7.4 trillion under management,” which enables the company, through the funds it runs, to be “one of the five largest shareholders in nearly every corporation in the S&P 500.”[2] So BlackRock “can cast votes and pressure boardrooms to effect change.”[3] The company would be hypocritical in using its power as a major stockholder to get managements to have and enforce good workplace policies if the company were not doing so itself. From the standpoint of self-regulatory capitalism in society, BlackRock could make a significant contribution far beyond improving workplace policies.

In January 2020, BlackRock’s management announced that it “would take a tougher stance against corporations that aren’t providing a full accounting of environmental risks.”[4] This was “part of a slew of moves by the investment giant to show it is doing more to address investment challenges posed by climate change.”[5] BlackRock CEO Laurence Fink wrote, “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.”[6] The long-term viability of companies is a salient variable in recalculations.

As much as issue-specific stockholder activism narrows the gap between the values and priorities held by business and society, the matter of corporate governance is also important. In particular, companies whose managements control their respective boards of directors suffer from a deficit of accountability in their governance system. Board members could be influenced on issue-specific stockholder activism and yet a CEO could ignore any pressure from members if he or she controls the board, whose functions include holding the CEO accountable. BlackRock had the power as of 2020 to pressure boards to break up the conflict of interest when a CEO is also the chair of the board of directors at a company. Because of BlackRock’s reach in overseeing so many companies, corporate governance could effectively get a remake such that greater accountability would be part of the governance systems. Because outside directors would theoretically have more sway over a company’s management, wider issue-specific stockholder activism could have greater resonance with management. The gap between corporate and societal values and norms could thus be narrowed. Indeed, the capitalist system within a society would be more self-regulated in terms of corporate governance.

In short, BlackRock could improve the business sector significantly beyond responding to particular issues. Perhaps business itself is vulnerable to missing the big picture at the scale of governance systems, and thus opportunities to improve them. Even though the focus on quarterly earnings and, moreover, on profit-seeking may play a role, I submit that even CEOs do not typically cast a wide enough eye such that governance systems (not only in business, but also government!) are entirely in view as systems. Focusing on particular stockholder issues is closer to the focus on profitability, and thus primary.

---

[1] Dawn Lim, Steven Russolillo, and Jing Yang, “At BlackRock, Public Firings, Overseas Probe Send Message About Office Misbehavior,” The Wall Street Journal, February 3, 2020.

[2] Ibid.

[3] Ibid.

[4] Dawn Lim and Julie Steinberg, “BlackRock to Hold Companies and Itself to Higher Standards on Climate Risk,” The Wall Street Journal, January 14, 2020.

[5] Ibid.

[6] Ibid.

Goodwill Dismisses a Solid Societal Norm: A Mentality beyond Unethical Conduct

When managers of a business or non-profit interact with a societal norm by openly rejecting any obligation to act in accord with the norm, the reaction from stakeholders can be utter disbelief. The refusal to act in accordance with the norm as it impacts the organization can be beyond bad management and even unethical conduct. The refusal to acknowledge a societal norm even as its impact on the business and stakeholders has been arranged by the business is beyond, though it can include, unethical conduct. Norms are not in themselves ethical, for as David Hume wrote, you can’t get an ought from an is; rational justification by ethical principles must be added before we can get to, “You ought to do X” from “X is the practice.” Yet ethical principles can be in norms, in which case we can say, “You ought to act in accordance with the norm because it is ethical.” In some cases, the norm-business relationship (i.e., Business and Society) can be more salient than an ethical principle in the norm itself. A managerial practice at Goodwill, a non-profit retailer based on donations for the poor, serves as a case in point.

Goodwill stores have tags of several colors on the merchandise. During yellow tag week, merchandise with a yellow tag is half off. Every other Saturday, all of the colors are half off. By the time the doors open, customers have likely formed a long line out in front. Such lines can cover most of the front length of a store. On one such morning at one store, I saw a customer stand by the front doors opposite of the line just five minutes before the opening. I saw the store manager let that customer in second, even though it was obvious that she was not in line. Curious, I entered the store to interview that manager. He told me that his responsibility is only to open the doors, not to determine that some people can come in and others cannot. His lapse would have been easily fixed not by telling the woman, who did not evidently think that store lines applied to her, that she could not enter the store, but, rather, that she would have to go to the back of the line. I asked the manager whether he believed that the line did not pertain to his store. “It is not on our property,” he answered. “We can’t say what people can do out there.” Observing my facial expression, he said he would make sure that customers come in first who are in line, and he even made an announcement lightly chastising “the individuals” who had not waited in line.

Nevertheless, later the same day, I returned to the store to interview two of the associate store managers, both of whom also touted the property point. “So if I come here just before 9am in two weeks, I don’t have to stand in line; I could go second or third?” I asked. “Yes,” one of the associate managers said, even as her hesitation in answering came, I suspect, from a recognition that her answer violates the ethical principle of fairness. This recognition should have given her the sense that something was wrong with the policy she was supporting.

Even though the violation of justice as fairness—it is just that people enter a building in order hence via making a line—is salient in this case, the fact that managers of a store disassociated it from the line to get into the store, hence pertaining directly to the store, is even more bizarre and thus significant. The societal norm here is that customers forming a line outside a store before doors open are to be let in first. For a manager to open a store door and assume that the norm does not apply to his store, and thus does not form an obligation on his part to see that the customers in line go in first, removes him, in effect, from the society or environment in which the store functions.

Even the narrow property-limits rationale is bizarre, for Goodwill leased rather than bought the land and building, and the line of customers pertained to the store even though it did not extend to the sidewalk in front between the building and the parking lot. That the line pertained exclusively to getting into the store overrides the question of property in terms of the incurrence of an obligation because the customers in line had the societal expectation of being able to enter the store in order whether or not the sidewalk was owned by Goodwill. The managers with whom I spoke dismissed the customer’s expectation, whose legitimacy is societal (a societal norm) rather than company-based. The sheer dismissiveness is rude, not to mention bad customer service. Even though the ethical principle of fairness is in the societal norm, the bad attitude toward the customers, the lazy approach to opening the store’s front door, and the decision that the societal norm does not apply to that store are not necessarily unethical (or at least an ethical argument would need to be made).

Narrow self-interest, which business managers tend to adopt, is not in itself unethical. For one thing, the business and financial systems have infrastructures and norms that virtually necessitate it at the firm level. Even so, if stakeholders (or others) are harmed as a consequence, then the narrowness is culpable ethically. In this case study, the harm to the customers in line from one person entering second from opposite the line is small. Few of the customers in line could even see the interloper, and none of the customers—in line or afterward—would have guessed that the store manager’s initial position (and those of two of his associate managers) regarding the store’s responsibility to let the people in line in first.

In fact, that the associate manager who answered affirmatively that I would not need to stand in line (because Goodwill is only concerned, by right, with what goes on inside the stores) had come to such a nonsensical conclusion (and stood behind it) is not in itself unethical. She was not lying, for instance; she really believed herself. Moreover, that a person could believe anything so nonsensical (including the property argument) is also not unethical. Perhaps in the field of business and society, psychology figures in more than does even ethics. Of course, the norms-based field of business and society is (or ought to be!) distinct from business ethics even though the two relate, such as in there being an ethical principle (e.g., fairness) in a societal norm that is not in itself ethical because it merely is.

McDonald’s Over-Reach: Blending a Restaurant and a Coffee Shop

In spite of essentially flat sales in the U.S. in February 2013 from the same month in 2012, McDonald’s CEO, Don Thompson, said he was confident that the people at the company had sufficient experience to “grow the business for the long term.” Even assuming that a business can be grown as if it were a geranium plant, the claim can be critiqued both in regard to the underlying assumption regarding “growth” and that of long-term viability. Fusing a restaurant with a coffee shop can be said to be an over-reach that had blended the company too much, at least at the store level.
In regard to the company’s long-term viability, changes in the business environment were important. The fast-food industry had obviously changed from 1970 to 2010, as did American society. As restaurant chains like McDonald's gained substantial economies of scale with the proliferation of restaurants, the increasing popularity of healthy meals gradually undercut the prospects for continued growth.

From "Americana" to "Enjoy Getting Fat": A change in the business environment in the last quarter of the twentieth century in the U.S. that impacted McDonalds at its core.    source: McDonalds.com

The management at McDonald's did relatively well in introducing healthy alternatives to its menu by 2010. The strategy also included blending the restaurant with a coffee shop experience, the enjoyment of which had also expanded due to Starbucks. To cut into that market, McDonald's introduced new drinks, such as smoothies, mochas and lattes, and added wireless internet service. As a result of having adjusted to the health-conscious and coffee shop mini-cultures in the business environment, McDonald’s U.S. sales rose 11.1% in February 2012 from the year before.[1] By 2013, Burger King was renovating its restaurants and adding "coffee shop" drinks too. Even so, the flat McDonald's sales figure in February 2013 was a bit of a surprise. Although the problem could have been the newly introduced fish product, I suspect that the market may have been questioning McDonald’s expansion into the coffee shop business as being an over-reach even it did enjoy certain synergies.
McDonald's was admittedly poised to give Starbucks a "run for its money" concerning that the giant coffeeshop chain had gotten away with mass-producing drinks to sell as premium prices. That coffee chain was essentially charging a premium price for non-premium products, given the manner of production. Even though McDonald's could undercut Starbucks on price and thus potentially gain market share, a McDonald's facility looked and functioned more like a restaurant than a coffeeshop where people would feel comfortable hanging out and getting work done or socializing. 
Adding to the discordance was the decision of McDonald's management to continue to stress the “dollar menu” for the “budget conscious” customer. Put somewhat delicately, the business strategy assumed that two very different market segments would co-exist in the same room. Starbucks had the same problem because of its "third place" policy, wherein people could hang out without purchasing anything. I know of at least one Starbucks' store in which the number of homeless "customers" has driven out otherwise paying customers. McDonald's management, through at least the 2010's, was essentially blurring the company's identity by seeking continued sales growth by trying to combine a restaurant with a coffee shop.
In general terms, a company’s senior management (or board of directors) should not get so caught up with important changes in the business environment that the resulting strategic change involves trying to remake the company into something the company is not. A fast-food restaurant is not a coffee shop. Although some people in the fast-food crowd would relish mocha, blending the social distance between the two cultures could result in a bitter drink that satisfies nobody. Had McDonald's management concentrated simply on adding new healthy fast-food (i.e., restaurant) products, sales would probably have improved without risking an identity crisis at the restaurant level. Alternatively, McDonald's could have built real coffee shops, with suitable furniture and decor, and synergies could still have existed. Perhaps fusing different lines of business, in cases in which each has a distinct culture and customer base, is not wise. To keep up with societal shifts and profit from them while not blurring the business’s identity is the sort of balance that a corporate management should attempt to reach and sustain in formulating strategy over the long-term.

For a critique of Starbucks, see Bucking Starbucks' Star, available at Amazon. 

1. Candice Choi, “McDonald’s Sales Drop Despite New Fish McBites,” The Huffington Post, March 8, 2013.

“No Loans” on Gun Sales: G.E. as Socially Responsible or Financially Savvy?

In the wake of the Sandy Hook school shooting in Newton, Connecticut in late 2012, General Electric announced that the company would no longer finance consumers’ gun purchases. Russell Wilkerson, a G.E. spokesman, wrote in an email that the new policy was being adopted “in light of industry changes, new legislation and tragic events that have caused widespread re-examination of policies on fire-arms.” In other words, the policy shift was not simply a reaction to Sandy Hook. Rather, the company’s executives were adapting to changes in the organization’s environment, including the industry itself. This opens up the question of whether the new policy can be classified under the rubric of corporate social responsibility (CSR). Perhaps the adaptation was simply good business, with the appearance of “CSR” adding some reputational capital through a good public-relations campaign.

Do business principles mandate treating this product like any other?  Source: NBC News

Well-meaning moralists in particular may have a tendency to project their own strident sense of obligation onto other people, and even organizations as if they too could be moral agents. Yet an organization, like a biological organism, must adapt to its changing environment, or risk being replaced by a competitor that has achieved a better fit to the new environment. Does such adaptation, which renders a company more fit by means of a sort of competitive natural-selection process, involve obligation manifested as responsibility to that environment, or is the adapting simply a matter of survival and even accruing surplus? To do one’s duty is not typically said of what a person wants to do anyway in line with self-interest. A person would quickly see through my claim that it is my duty to eat the remaining chocolate sundae so not to waste food. People do not typically fall over themselves to do something out of a feeling of duty or felt responsibility. For the sense of obligation or responsibility to be the primary motivator, the person (or persons, in the case of a company) must not otherwise be inclined, as from the anticipation of a benefit, to act. When stimulated, self-interest tends to eclipse the feeling of duty of responsibility. This thesis can be applied to GE’s policy on financing firearm purchases. 
First, though, can the policy be said to fall under the rubric of corporate social responsibility? What if marketing the policy was simply good business? The societal benefit in making it more difficult for people to buy guns may simply have been intended as a byproduct. Surely the societal good of a byproduct has worth even without having been motivated when the policy was chosen. Even so, the primacy of self-interest--the profit motive--irrationally taints the resulting societal good. Such a company's societal reputation would be enhanced by the good of the byproduct and decreased by the primary motivation of self-interest.  
How salient was the profit-motive in GE's decision to stop lending on gun sales, and how great was the impact in terms of the benefit to society, beyond the company? GE Capital Finance had already stopped providing consumer financing for new gun-shop customers in 2008. The policy change in 2013 merely extended the ban to existing customers. So it is not as though potentially new customers would be discouraged from buying a gun on impulse for nefarious purposes. The impact on the bottom line from lost sales could not have been assumed to be great; even if new and existing gun customers had been eligible for financing before the policy change in 2013, we would still be talking about a small fraction of GE’s revenue. Additionally, according to USA Today in 2013, GE’s “decision affects fewer than 75 retailers, which GE says is about 0.001% of all gun retailers.” This is because the policy “affects only retailers that sell firearms exclusively.” General merchandise stores, such as Walmart, were excluded from the company’s lending ban. 
However, Wells Fargo had stopped financing gun purchases in 2004 “for business reasons,” according to company spokeswoman Lisa Westermann. Perhaps it was good business at GE too, but not directly. 
Indeed, the "corporate social responsibility" policy as promotion could have been expected to boost sales companywide without much cost in foregone gun sales on credit to new customers in gun stores only. In fact, the policy as promoted could even be misleading, as in the article's title in USA Today, “GE Won’t Make Loans to Buy Guns” even though GE would still be financing guns—just not through stores that sell only guns. The gap itself between the publicized and actual policy could mean that the managers' intent had been to use “marketed CSR” to boost the company's reputational capital with as little cost as possible. In other words, the profit-motive was likely the motive. If most of GE’s lending on gun purchases was through multi-merchandise retail stores, GE could capitalize financially on sympathy from the school shooting without having to give up much financially. Interestingly, the shooter’s father, Peter Lanza, was a GE executive at the time—the company being based in Fairfield, Connecticut. Had other GE executives felt obligated, also being at such close range to the tragedy, to protect the kids, we would not have seen the sort of motivation that led to the exceptions and allowing the misleading storyline to go uncorrected. Were the primary intent that of protecting kids at schools from getting shot, the loopholes would not have been allowed to exist even if GE had to wait for contract renewals with general-purpose retailers such as Walmart.  
Often corporate social responsibility and business ethics are conflated. The distinction in this case is clear. The fitness of a policy to societal norms is a descriptive matter of whether organizational values are in sync with societal ones, whereas the misleading claim to have have ended loans on gun sales is a normative matter. Whether the norm in GE is consistent with the societal norm on the role of guns in the tragedies does not require justification by ethical reasoning and principles or theories. In contrast, whether a company should be misleading or even fail to stop it in the press necessarily includes resort to ethical principles, for only they can justify the claim that the motive or consequence is unethical. 
Still another lesson to take from this case involves the choice to wade into a controversial societal issue. As in the case of gun control, which is really about access to guns, entering a controversial debate puts a company at risk for being negatively viewed by the “other side.” This could significantly reduce the good  to the company obtained from the use of corporate social responsibility. 
A USA Today poll taken at the time of the policy change in 2013 found public support for new gun-control legislation “slipping below” 50 percent. GE risked many people agreeing with John Meek, the owner of a gun store in Illinois, who called GE’s policy “an injustice” because the instrument rather than the user is being blamed. Howard Schultz of Starbucks, in contrast, correctly judged the changing American attitude toward gay marriage in using the company to promote the cause, even if a CEO using a company for a personal political agenda is unethical. A dramatically changing shift in societal mores, norms, or attitudes is like a wave that managers strategizing corporate social responsibility programs and policies can ride, whether the motive is financial gain only or includes improving the social good. What might seem like an easy way to enhance a company's societal reputation can easily backfire if not done with attention to a changing business environment. 

Source:

Paul Davidson, “GE Won’t Make Loans to Buy Guns,” USA Today, April 25, 2013.

What is the basis of Business & Society?

Scholars and practitioners alike in the field of business & society tend view it as being synonymous with corporate social responsibility. It is easy to do. Another error concerns the conflation of CSR and business ethics. In fact, the very name of the topic, corporate social responsibility, is problematic. Straightening all this out could result in more topics in business & society even as the field ceases to overstep into business ethics and the nature of CSR becomes more transparent in business as well as society. 
First, corporate social responsibility is a topic in business & society; CSR is not a field in itself. Business & society contains several topics, one of which being CSR. The study or practice of how business and societal norms converge or diverge does not reduce to how to design and implement a CSR program even though such programs are typically marketed as helping society in some way under the veneer of business-altruism. The managers of a business are aware that even just projecting this patina of a warm glow into the business environment can help even the bottom-line, not to mention reputational capital, a long-term intangible asset. Not that the managers of most companies believe that the business actually has a responsibility beyond making or selling a good product.

Stepping away from CSR within business & society, much material can be studied as well as be used by companies. For example, the field extends to the macro (i.e., above the firm-level) level. CSR folks typically miss this point completely. The business sector itself being within a culture or society is also a matter of study in the field from the standpoint of values and basic beliefs. 
Business culture in a given society may stress, for instance, getting as much as possible out of external stakeholders, whereas in society people may look disparagingly on self-seeking, manipulative people. In the business sector of course, a focus on the firm's interest is not viewed as selfish, and interactions with people outside the firm are not characterized as manipulative. Yet from the standpoint of societal norms, those people outside the firm may perceive the business mentality as such. 
Another area of study in business & society concerns whether the business sector dominates such that even societal norms have been swayed in that direction. In contrasting the E.U. and U.S., for example, American values are arguably more pro-business. The Americans have even made a de-facto holiday out of first shopping day after Thanksgiving! 
Also, industrial titans in the late 19th century believed that they owned America. What then of democratic values, it was asked, if the Congress was indeed bought and paid for? The U.S. Presidential election of 1896 showed that the barons could sway, likely by payoffs, their workers into voting for the pro-business party rather than that whose platform for a more economically egalitarian distribution was more in the workers' economic interests. In terms of business & society, the issue here is the hegemony of business values and norms over those of society such that its own reflect those of business. The question of whether the hegemony is right, or ethical, is exogenous to business and society, as ethical reasoning is instead in the field of business ethics, which draws on two other fields: management and philosophy. 
Should is an ethical term, so answering the question of whether businesses should be socially responsible is properly done in the business-ethics field, whereas business & society is descriptive, being about norms and values. What are the respective values/norms in business and society, and what are the costs to both businesses and societies of divergence and the benefits for both of congruence? Asking furthermore whether business values and norms are hegemonic in American society is different than asking whether they should be. The latter requires justification by reasoning and ethical principles, whereas description does not. The European philosopher, David Hume, claimed in the eighteenth century that we cannot get from a descriptive statement to a normative statement. To say, for example, that I am hungry is not to say that I should be hungry (or not be hungry). That the respective values (and consequent norms) of business and society differ, this is not in itself enough to claim that they should differ. The should statement requires rational justification by ethical principles or theories. 
It follows that the third theoretical movement of corporate social responsibility, "CSR3," is an oxymoron in that it conflates CSR with ethical justification. The latter is the method of ethics in philosophy, which, with management, is an underlying discipline of business ethics but not of business & society, which deals with extant rather than ethically justifiable values and norms in capitalism as well as the societies in which markets and businesses operate. 
I contend that the term, responsibility, in CSR is inherently ethical and thus properly exogenous to both CSR and moreover business & society. In other words, corporate social responsibility suffers from the inherently-moral term, responsibility. The misnomer represents a category mistake (confusing business ethics and business & society). CSR takes it as a given, at least in its label, that businesses are responsible for societal problems and thus are obligated to take part in solving them. In other words, the question of whether businesses should be held to be responsible for societal ills has essentially already been answered in the label of CSR. In other words, the title begs the question and answers it before a person enters into the topic. Debating the question within the topic and even the title itself, such as I did in William C. Frederick's doctoral seminar at the University of Pittsburgh, is an uphill battle from the start, for the playing field is severely slanted from the start (i.e., the label, CSR). 
Interesting, Bill and I were both sickened by the marketing exploitation of CSR by corporations (although, admittedly, some social good results even if as a by-product). I turned to the field of business ethics while Bill, whose doctorate had been in anthropology and economics at Texas, took up the study of applying genetics, evolution, thermodynamics and other natural sciences to business organization. My first two years in college had been in a biology/botany major, and from those classes in science I took quite well to Bill's work. Finally Bill and I were on the same page academically, years after I had graduated. We had both rejected CSR as it had evolved and went to basic theory as a foundation. I went on to ethics in philosophy and religious studies, yet while picking up Bill's approach to business & society. He was more my professor then than when I had been his doctoral student. The arguments I had made against CSR are in this essay, yet the arguments I believe have matured (as have I). 
Going beyond my criticism of the incorporation (and basis) of the term, responsibility, I can now go on to proffer a basis for the field of business & society. CSR is not this basis; as a topic in the field, CSR is further out--a middle planet in the solar system rather than the sun.
Rather than being based on ethical justification, the basis of the field of business & society can be said to be how people working at a company and external actors relate with each other. At the interpersonal level, finding common ground in how we relate is the core chore of the field. Business and non-business people alike, and even managers/employees and their external stakeholders, unwittingly or intentionally clutch at their respective roles. These can belie the common humanity that naturally exists as a common denominator between people as we interact. Business & society is essentially about transcending these roles to relate on a human level interpersonally. Simply calling into a company's customer-service call-center can illustrate how a rigid role can snuff out human interaction, which is ultimately in a business's best interest because  more can be accomplished with mutual understanding and flexibility that with talking at the other person. From a business's standpoint, more can be accomplished with a customer who is not shouting at the employee. Business & society is ultimately about the persons on both sides getting past their respective roles (and stereotypes of the other) so common ground on an operative value and norm can be realized in a way that business can be done in society. Borrowing from Bill Frederick's application of natural science, I submit that we are all of the same species, homo sapiens, so common ground in terms of values and norms, or at least being able to transcend clashing values and norms, must be possible. In fact, given our common DNA (as well as basic socialization, such as being raised by adults), the common ground is more natural than are the differing values (and related norms). 
From the business end, employees (including managers) can let go of the jargon-crutch and rigidity that come from a policy-oriented, top-down management system, while people outside a given company or the business sector itself can compromise too in attempting to interact rationally rather than emotionally--meeting business halfway. Those people can also realize that employees are being paid to economize their time rather than listen to stories about relatives or pets. The interpersonal dynamic that is typical between call-center employees and customers is in great need of this fundamental task in business & society. Like Buddha's "middle way" and Aristotle's doctrine of the golden mean, the people in both business and society can (here, not should!) go halfway to relate as humans. 
Corporate programs in social responsibility not only do not adopt a middle standpoint, but also can keep a business's management from attending to where business & society can really change how a business interacts with people including customers. Even in assuming that people in society self-identify mainly as customers or even consumers has too much of the business-perspective in it. People in society may view the ways of business, and especially its self-oriented profit- or advancement-mentality as different and even strange. 
In short, norms of business and society can be aligned at a basic, human level, meaning in how people relate to each other. Employees can say hello in having even brief contact with people outside the company who are of no use to it--that is, not being so purpose-driven--while the people can put any anti-business fervor aside and relate as individuals.  The relating itself is fundamental to business and society. It should be done at the middle between the extremes of business-culture and society so both business and societal norms/values can be invoked and related. Studying Mars from the Earth does not do Mars justice; hence, NASA has sent craft to the red planet. I take this to be the basis of the field, with matters of institutional programs such as CSR being relatively artificial and thus not human enough to be central to the nature of business & society. 
A program with policies and functionalities (i.e., offices) is an extension of how businesses are organized and function. People in our daily lives do not organize as such, and thus recognize CSR programs as being on the business rather than society side of the field. It might be interesting to imagine how CSR could be established and done from the middle standpoint. 
In short, a CSR program reflects the ways of business, and is thus not far enough out on the business plank to fundamentally touch the societal end. Whereas the field is by definition business and society, CSR is mostly on the business side. It is no wonder that many businesses use CSR as "window-dressing" designed to make the company look good so more people will buy goods or services there. Of course, CSR programs do benefit societies, and this point can be argued to justify the central marketing use by business. Nevertheless, meeting societal norms means going half-way even in the approach that a business uses.