Beyond Climate Change: Starbucks Awash in Cash

While it may be tempting to go after companies for hypocrisy on corporate social responsibility, even deeper criticism may be closer to the bottom line, financially. Even though social media castigated Starbucks for its impact on carbon emissions in agreeing to fly its Southern Californian CEO Brian Niccol to Seattle on a company plane each week, I submit that the amount of spending entailed raises questions about cost-containment and even cast some doubt on whether the company’s price increases in 2024 were wholly justified, and thus even on whether the industry was competitive or an oligarchy.

Before Niccol was to assume his role as CEO on September 9, 2024, Starbucks announced that he would “not be required to relocate to the company’s headquarters” during his employment with the company.[1] Because he would be expected to work at the Seattle office at least three days a week to comply with the company’s policy on hybrid working, he would be flying a distance greater than that which is between Berlin and Rome on a company plane weekly. Why could he not fly commercial (business class) and thereby save the company a lot of money? Is a CEO really above such flying?

I suspect that in the E.U. the answer would be more down-to-earth, or realistic, than in the U.S., where CEO’s are more likely to be reckon as akin to divine emperors. Whereas in Europe, an aristocracy exists that can put the moneyed caste in its proper place, American CEOs reside at the top of the societal pyramid. Being consumed with thoughts of money is valued rather than presumed low. This is not to say that inherited wealth is value-free and thus exempt from a different criticism. Rather, my point is that CEO’s of American companies can get away with being treated like royalty on account of the relatively pro-business (or business-leaning) societal culture.

Rather than criticizing Starbucks for spending too much money on its CEO’s transportation, users of social media expressed anger over the company’s preachments on sustainability while the CEO is to be flown on a private plane weekly, burning thousands of liters of fuel in the atmosphere. On its website, the company claimed that it had “a bold aspiration to be a resource positive company.”[2] The CEO of Conservation International stated that the company was backing up its “commitments with immediate actions to reduce [its] footprint and invest in nature.”[3] The hypocrisy could have been easily obviated by having the CEO fly business in a commercial airline.

It is not as if Niccol would not be able to afford the flights, as his annual salary was announced as $1.6 million, not including a possible performance-related bonus of up to $7.2 million and up to $23 million a year in company stock.[4] Of course, the company would no doubt cover the cost of its CEO’s commute, whether commercial or on a company plane, and such money, together with his compensation-level, suggests that Starbucks had money to burn in 2024 even as it was increasing the prices of its drink products.

In 2023, the CEO-to-worker pay ratio in the United States had increased to 251:1, which was up 26% from 2022. Back in 1965, CEOs were paid on average just 21 times more than the medium worker. In 2021, Chipotle, where Niccol had worked prior to becoming CEO of Starbucks, was at 2,998:1, which was the fifth highest in the United States. I suspect that he had rather high expectations in negotiating with Starbucks. That the company relented even as it felt the need to increase drink prices (presumably to keep afloat financially) is a point that the carbon-emission critics missed.

Considering the rise in prices at restaurants and grocery stores since the pandemic of 2020, it is worthy of note societally that a company raising prices would have enough cash on hand to fly one person weekly on a company plane instead of having him fly commercial (and on his own dime!). That is to say, one might wonder how legitimate the rising prices of food (and drink) were even after the pandemic. In competitive markets, new entrants can offer more competitive prices and thus bring down prices generally in an industry, such that the companies cannot afford to be extravagant in spending. Starbucks may simply have been raising prices because it could get away with it, and could thus afford to fly its CEO on a company plane weekly not only to the company’s headquarters, but on visits to company stores and brewing facilities on a regular basis.

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1. “Anger Boils Up over Starbucks CEO 1600km ‘Super Commute’ on Private Jet,” Euronews, August 23, 2024.
2. Ibid.
3. Ibid.
4. Ibid.

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.

Hypocritical CSR during a Pandemic: O’Reilly Automotive, Inc.

In the retail sector, the behavior of managers and their employees at the store level is particularly relevant to customers. This relevance, I submit, outweighs the wider benefit of a company’s corporate social responsibility (CSR) program if the behavior contradicts either the CSR wording or actual programs. Besides the obvious bad odor of hypocrisy that vitiates CSR claims, a company’s direct effects on its customers (and employees) have implications in terms of responsibility. I submit that these implications are more important than those of CSR programs that are geared to societal problems because they are less central to a business. In short, having a CSR program does not make up for irresponsible policies or conduct toward customers (and employees). O’Reilly’s Automotive serves as a good illustration.
The company’s second CSR goal in 2018 was to enhance “the health and wellbeing of communities engaging with” the company.”[1] The company claimed that CSR is “embedded in” its business philosophy such that the operations are not to “become an obstacle or a burden in the way of people’s and the environment’s wellbeing.”[2] Regarding health, the company’s CSR program consisted of providing “nutritional boosting” by producing and distributing health and hygiene products to “enhance the wellbeing of its customers along with the various communities” with which the company has engaged.[3] To the extent that such products are sold to customers, the CSR program is more like an additional product line than from any sense of responsibility to help reduce societal ills. In other words, the health CSR program was rather self-serving.

In spite of the signage, two out of the three customers in the store were not wearing masks or maintaining physical distance from other people. No employee confronted the two customers. 

In just two years, the company’s store-level operations had negligently become an obstacle or hindrance to the health of employees and customers even as the company continued to tout its CSR health goal. Even though stores had signs indicating that masks were required due to the coronavirus pandemic, managers and/or employees in at least one store were refusing to enforce that policy when customers came in without wearing masks. Such customers could even ignore the barriers keeping customers at a distance from the check-out counter. One employee told me that some customers were even mistaking the barriers as an invitation to go behind the counter! I was just as astonished, however, at the employees’ impotence when it came to enforcing the mask requirement.
Perhaps just as the company’s CSR program was self-serving (i.e., selling an unrelated product line), so too was the company’s overriding dictum that the company’s mask policy should not be permitted to get in the way of customers buying products. That is, I suspect that the implicit priority was on the value of marginal revenue over the health of customers and employees. This business calculus may not be surprising, yet the refusal to enforce a salient (by signage) company policy is. To claim that a requirement that is not to be enforced is nonetheless a requirement involves not only cognitive problems, but also sheer weakness. Management includes both making policies and enforcing them. The decision not to enforce one, such as in telling employees not to accost customers who feel entitled to ignore the signage of a requirement, can thus be regarded as ineffectual management even if the goal is to maximize revenue.

[1] Matthew Harvey, “Corporate Social Responsibility of O Reilly Automotive, Inc.,” Essay 48 October 17, 2018 (accessed November 18, 2020).

[2] Ibid.

[3] Ibid.

On the Ethics of Business Donations and Saving Souls

In the film, Major Barbara (1941), Barbara, a Major in the Salvation Army, has been raised with her sister and brother by their mother. She is legally separated or divorced from the father, Andrew Undershaft, who nonetheless finances the lavish lifestyle of his family. Even Barbara, the idealist Christian evangelical, lives on her father’s armaments wealth. Yet when she meets him after several years, she leaves the Salvation Army after Andrew and an alcohol producer donate large sums. Although Barbara recognizes that the Army in London needs the money, she believes that the Army has sold out because providing weapons of death and alcohol are sinful. “What price salvation, now?” a customer at the Army’s soup kitchen asks Barbara after she had taken off her Army pin and given it to her father. Barbara is not willing to continue with the Christian organization because in her mind it has sold out even though it admittedly needs the donations to survive. But has the Army sold out? Furthermore, does Barbara sold out in using her father's business to convert workers. Ironically, that may be more ethical than the Army's approach to saving souls. 

The full essay is at "Major Barbara."

Authentic Corporate Social Responsibility during a Pandemic

"We’re doing a lot of social distancing,” U.S. President Trump claimed during his press conference on Coronavirus on March 23, 2020. The day before, he had said he is proud of the American people for voluntarily taking precautions. March 21st, I had been in a Target store to buy some necessary items. No one was "social distancing," including employees. A more accurate, and better understood term would be physical distancing, as it is more broadly applicable than socializing and the latter can be done at a distance, especially via telephone and the internet.[1] A day before, I had been in two grocery stores—two because one—a Safeway [Albertsons]—was missing so many hoarded items. I found no physical distancing at Safeway and Sprouts. The former was not that safe after all, and the latter's healthy-food was not being sold in a healthy way. It was as if the employees, customers, and managements were oblivious to the obvious risks, but the explanation may be more complex. I contend that it applies to corporate social responsibility too, for I also found that none of the store managers was making announcements or had signage to remind people to keep a distance from other people in the respective stores. On March 26, 2020, I again saw no physical distancing by employees and customers at a Safeway store; the store manager told me he would have a store meeting on the issue. In the meantime, not even periodic announcements would be made. This is known as erroneously applying status-quo management procedures in a state of emergency. Also, Safeway's store management had not acted proactively to ration products such as toilet paper and cleaning products that had been voraciously grabbed off the shelves by herd-exuberant customers in a panic mode. In short, I submit that the unique business conditions of the Coronavirus pandemic can be used to assess whether corporate social responsibility is real or merely a marketing tool.

(This is not the Safeway store where I found the deliquencies.) 

I begin with the matters of relinquishing old habits and starting new ones, for both are important to being proactive both at the individual and store levels during a pandemic. Plato’s dictum, to know the good is to do the good, relies on the human proclivity to create and maintain habits. In other words, habitually doing the good, which presupposes knowing what the good is, plays a vital role in doing the good. It gets easier once a good habit has been established and practiced. We are indeed very habitual animals. We tend to take the same route to work, sit in the same seat where seating is open, and even eat the same foods at breakfast as if in a rut. So Plato’s emphasis on habit is wise. If staying at home and keeping at a physical distance from other people are good habits during a pandemic, then the emphasis should be on establishing these habits and attending to them until the new habits become easy, even automatic. Unfortunately, this is easier said than done.

A good habit faces two hurdles. Firstly, contravening habits must be resisted. When the Coronavirus just getting started in the U.S., I literally had to pull back my arm so I would not shake someone’s hand. “I don’t think it’s a good idea to shake hands now,” I told the other person, who was stunned. My habit of shaking hands had become so ingrained in my mind that it sent my left arm out even though I had decided not to shake hands. Pulling my arm back felt so unnatural that actually doing it felt difficult, as if I were fighting against horizontal gravity; it was as if I had to drag my arm back.

Furthermore, that the other person was stunned even though he knew the reason was reasonable stunned me. Why the apparent affront in the face of a pandemic already present locally? I suspect that the man’s reasoning was not controlling his passions (emotions). In The Republic, Plato writes that such a psyche is unjust. So too, by the way, is the polis (i.e., a political geographical area) that has passions unrestrained or checked by reason via individuals or a government. A government has a responsibility, for example, to see that the passions that would otherwise thwart reason’s conclusions do not. So, many governments were urging or ordering people to stay at home (i.e., self-quarantine) and maintain physical distance in public during the Coronavirus pandemic. That government, acting justly, had to contend with preexisting habits such as shaking hands and walking or standing at a close distance to other people. From the standpoint of those habits, the government’s position may have seemed unjust, perhaps as invasive or overreactions. In short, ongoing habits die hard.

The second hurdle that a good habit must overcome to be sustained is the person going beyond the decisions and actually engage the new behaviors enough such that they stick. It is one thing to decide to do something different, and quite another thing to change behavior. This goes beyond stopping previous habits, such as shaking hands and standing close to other people; new behaviors must be done enough to gain traction. Simply having made the decision to change is not enough. Yet implementing a new choice is difficult because the conduct is not aided by the force of habit until the conduct is done enough times to become habitual. Hence Plato’s dictum that doing something good enough for it to become a habit is important. This applies to corporate social responsibility at the managerial level (especially at the store level).

In the grocery stores (and the Target store) that I went to when it was reasonable to assume that most Arizonans would be aware of the need to keep a certain distance from others, I found that few if any people were engaged in the practice. Even if they had made the decisions to engage in the practice, which was in line with the core human motive of self-preservation, they had not resisted old, antithetical practices and put the new behaviors into practice enough for them to become habitual, and thus easier.

Rationally, a human being would tend to be motivated based on self-preservation to form new conducive habits. In other words, a law should not be necessary. Perhaps the force of old habits is powerful enough to eclipse even the motive for self-preservation, or maybe the problem lies in too many people not making even rather obvious connections between, say, staying at a distance and not catching the virus. Arizona was at the time 49th out of the 50 American States in primary and secondary education (i.e., before college). 

Corporate social responsibility could have bridged the gap, such as by a store manager making regular announcements that everyone in the store should maintain a certain physical distance from everyone else. I suggested this to the store manager on duty at Sprouts grocery store as I was leaving, but he demurred even though the chain was touting its social responsibility in providing healthy produce to customers. He looked at me as though I were from France. C'est drole, n-est-pas? 

Perhaps that manager feared that some customers in the store would overreact out of fear and immediately leave the store, beginning an unprofitable stampede. The bad education system locally may also have been a factor, for he presumably could have made the announcement in a calming, friendly way. "Hey, thanks for shopping with us today. Just a reminder that the government recommends that we all keep a distance of at least ... from each other. Nothing to worry about; just a precaution." The informal, friendly tone, the use of "government" rather than "public health agencies," the use of "recommends" rather than "orders," the "nothing to worry about," and the sense that the manager and employees were included would likely have been sufficient to stifle any herd-animal stampede, even in Arizona. However, at the end of March, 2020, while I was in a Target store, a simple, "Please keep a distance of six feet between you and others" announcement played every half-hour and did not trigger any stampedes. Even then, neither Sprouts nor Safeway were making announcements in their respective stores even though from my visits I could see a lot of non-distancing, even by employees. 

Perhaps the manager at the Sprouts store was so ingrained in old thinking habits that my suggestion did not even register such that he did not even make a decision. Both hurdles to beginning a new habit (i.e., making the announcement periodically) may have been too high for the man, yet it is curious that the company did not have a policy of making announcements as of the end of March.

Similarly, the manager of the Safeway store was in a meeting-rut when on March 26th he told me he would have to have a store meeting in the future rather than make announcement to employees and customers alike to please keep a distance of 6 feet/1.8 meters in keeping with the government's recommendation of distancing. Ironically, when his employee charged with sanatizing the shelves had walked very close to me and I reminded him of the distancing, his response was essentially to blame me. "Just relax," he said twice (he was obviously not). Interestingly, although the cashiers had a new protective clear-plastic sheet separating them from customers, at least one young cashier couldn't hear the customers because of the screen so she would lean sideways to speak at close range without any barrier face to face at close range. More than one office meeting would be needed at that store.

On a positive note, Sprouts's shelves were well stocked, whereas Safeway's were not. Safeway's managers may have been in too much of a mental and behavioral rut to catch the drasically increasing sales figures on items like toilet paper and ration them. Of course, the resistance to rationing may have been from the profit-motive, in which case we could conclude that the company's CSR programs paled in comparison to authentic corporate social responsibility within the business (i.e., closer to the core business functioning, or operative business model). Safeway managers may have discounted the point that rationing may even have an overall good financial effect as fewer customers face empty shelves and thus a bad experience.

I do contend that the store managements had a social responsibility to see that their employees and customers were as safe as possible from catching the illness while in the stores. It cannot be said that the managements were pro-active; even their reactivity was laggard or incomplete. Besides making simple announcements on distancing especially at the cashier area, responsibility extended to picking up on, and acting upon, abrupt trends in product sales in enough time to ration items even if rationing is not in the short-term financial interest of the companies. The companies' respective charters undoubtedly give those companies the right to make food available to paying customers. With that right comes a responsibility that becomes particularly active not only when too many customers and employees are not keeping a distance, but also when some customers are hoarding a product to such an extent that the stores cannot provide that product to other customers in a reasonable period of time. Rather than pointing here to CSR programs whereby a company sponsors a baseball team or food bank, I am referring to authentic social responsibility, which lies in managers and employees taking responsibility in the conduct of business, directly with people rather than through an institutional program. In other words, the authentic sort tends to a bottom-up phenomenon, at least at first, though proactive companies can issue companywide policies that are consistent with the measures taken in some stores in a timely manner. I contend this sort of responsibility is most likely to be enacted in strong companies, whereas the weak are too focused on entrails—too easily held back by preexisting choices and habits to venture new choices and implement new policies. Perhaps this case study comes down to this: Why in the world would a store manager NOT make a store announcement after a customer recommends doing so because people, including employees, are not keeping a distance to each other? It is reasonable to expect that the manager would not only make an announcement, but also call his superior other store managers can do likewise. Perhaps the rare situation of a pandemic reveals that the typical mentality in retail management is excessively rigid, even if being so is not really being cautious after all, but impedes caution being actualized at the store level. 

1. "It is important for us all to realize that when they recommend 'social distancing' . . . what health experts are really promoting are practices that temporarily increase our physical distance from one another in order to slow the spread of the virus." Cecilia Menjivar, Jacob Foster, and Jennie Brand, "Don't call it 'social distancing'," CNN.com, March 21, 2020 (accessed April 4, 2020). 

Corporate Social Responsibility or Increased Market-Share: The Case of Juul Labs on Youth Vaping

If the beneficial consequences for a society or the world are what externally validate corporations being socially responsible, does it really matter whether or not such benefits serve as the validators within the corporations? In other words, how much does the motive matter if stuff is getting done such that society is benefitting? To be sure, the motive can influence how much is getting done and for how long, but if the societal results are the same, would the nature of the motive really matter? I lay to the side the perfectly valid point that providing goods and services of value to customers benefits a society because consumers are, after all, a part of society. The interesting cases tend to be those in which profits can be expected to be negatively impacted from a socially responsible policy or program. Of course, a corporate management may announce the expectation of reduced revenue even as the management has carefully calculated how acting responsibly will be likely to be a profit-oriented strategy in the long term (including the related enhancement of reputational capital from appearing to have been self-sacrificial. The case of Juul Labs, Inc., the vaping industry leader in 2019 with a market share of 64 percent, shows just how difficult it is to get to corporate motives, even though the beneficial consequences to a society are arguably more important.

In 2019, Juul “voluntarily pulled its sweet, fruity and mint-flavored refill pods from the U.S. market.”[1] The company’s CEO pointed out in a meeting at the White House that flavors can help adult cigarette smokers switch to a less harmful alternative, so the company “would defer to the science-based approach of the Food and Drug Administration.”[2] President Trump had announced his intention to ban all flavors except that of tobacco. In refusing to follow Juul’s lead, NJOY and Reynolds American, Inc., makers of the second and third most popular vapers, kept selling all of their respective flavors, including those especially popular with teenagers.

Joseph Fragnito, a manager at Reynolds, said at the meeting, “We believe we can market flavors responsibly.”[3] At that meeting, President Trump, fearful of banned flavors being sold on the street and thus unsafe, was coming to the same stance. So had Juul gone too far in having taking kid flavors off the shelves if even those flavors could be marketed responsibly? In other words, had Juul lost revenue when the company could have changed how it marketed the inflammatory flavors? On the other hand, can flavors so attractive to teenagers be marketed in such a way that teenagers do not vape? In such a case, responsibly market may be an oxymoron, especially given that NJOY and Reynolds supported raising the minimum vaping age to 21. U.S. Sen. Mitt Romney, also at the White House meeting, supported Juul’s ban on certain flavors. “Putting out cotton-candy flavor and what is it, unicorn poop flavor?,” he said in reference to Juul’s competitors. “Look, this is kid product,” he added. “We have to put the kids first.”[4] Therefore, I submit that Juul applied responsibility better in banning such “kid product” than NJOY and Reynolds did in applying the concept to marketing the kid flavors.

This does not, however, absolve Juul with respect to its motive. At the White House meeting, the company’s rivals claimed that Juul’s management had voluntarily pulled its flavored products because it could sit out and wait for authorization from the Federal Drug Administration (FDA) as smaller companies went out of business. Then Juul would be able to come back with even more market share. Juul’s CEO countered that the company had banned its flavored products to address the problem of youth use. Whether or not the company’s socially responsible action was ultimately designed to increase market share or reduce the youth use of vaping—that is, to increase profits in the long-term or reduce teen vapers—the question is: Does this make any difference if the benefit to society in terms of less youth vaping is the same? I contend that the difference is ethical in nature, except from a consequentialist standpoint. In other words, an ethical basis exists—that of consequentialism—that essentially treats the question of motive as a non-issue.

Of course, if the societal benefits differ according to motive, the motive would matter even from a consequentialist ethical basis. If the motive of Juul’s management was to increase market share rather than see fewer kids vaping, then should the market-share strategy become compromised or fail, the societal benefits could be expected to be less than had the company’s management been intending to reduce youth vaping, which in turn could be expected to result in less government intrusion and greater reputational capital.  

Regarding the market-share strategy, could not young Juul customers simply start buying the sweet flavors from the other companies? Although they would have to justify their flavors to the FDA, the president was inclined to allow the flavors to be sold because otherwise kids might get them on the street. Would not Juul eventually go back to competing in those flavors? The other companies would not have gone out of business because the FDA would have approved the flavors. Juul’s management had pulled its flavors when President Trump was inclined to ban them industrywide. The changed politics, likely influenced by industry pressure (and perhaps campaign contributions), may have taken the wind out of the market-share motive, in which case the societal benefit would be less than had the motive been that of reducing youth vaping.

In conclusion, motive can matter even from a consequentialist standpoint because the amount of benefit to society can differ. In cases in which such benefits are the same even if the motive is one thing or another, the motive does not matter from a consequentalist standpoint. Even so, we want to think it does, ethically speaking. We want to assume that a management acting in a socially responsible way values doing so, rather than merely using social responsibility to earn more profit even in the long term. The field of business and society looks at the degree of fit between societal and company values, norms, or policies (as the corporate values may not matter), whereas business ethics delves into the ethical basis of a management’s motive. For example, is it enough that society benefits? Shouldn’t a company’s management want that consequence even if it comes with some financial loss (or opportunity cost)? These two fields are typically conflated at this point of contact. To say that Juul’s motive was in line with societal values is not to say what the motive should be. More than description is needed to get to normativity: the matter of should. We want to believe that Juul’s motive was the right one, but this is an ethical point that may not be relevant from a consequentialist standpoint. In terms of the degree of fit between corporate policies and societal values, the extent to which a society benefits is the litmus test.

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1. Jennifer Maloney and Alex Leary, “Trump Warns of Dangers in Banning Vape Flavors,” The Wall Street Journal, November 22, 2019.

2. Ibid.

3. Ibid.

4. Ibid.

General Electric: Tax Avoidance with Former IRS Employees In-House

The name of the game in all too many corporate tax departments is to minimize the tax due as much as possible. No countervailing notion of “corporate citizenship” or even “fair share” exists in that economic world of single-minded minimization of what is to be paid out. Put another way, responsibility does not compute in the business calculus. Advocates of corporate social responsibility got this wrong for decades by naively assuming that people who work in management roles cannot compartmentalize. Whether due to the strictures of a job description or financial pressures on a company, managers themselves may regret having to compartmentalize in order to keep their respective jobs. Sadly, all too often, a manager faces internal and external pressure to sign off on something that is admittedly unfair or too greedy. That the playing field itself may be slanted in the financial interests of large businesses goes beyond a manager's pay-grade, and even that of a corporation itself. For one to speak out in order to make the tilt explicit in society would deny the operative role of compartmentalization. Managers, even CEO's, may personally want a level playing field wherein corporations cannot yield an undue amount of wealth at the expense of other entities or persons, such a desire is outside of the business calculus. 

One manifestation of the tilted field is the ability of companies to bring IRS agents in-house as employees. In the debate on whether to end the George W. Bush Tax Cuts, the nominal (or statue) tax rates were salient. Much less was said of the effective rates, which are calculated by dividing the actual tax paid by total income (individuals) or net income (corporations). The New York Times reported in 2011: Although “the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.”[1] Although perfectly legal, the undue advantage means that the U.S. Government has had to look for other sources of revenue to make up for the lost revenue or do without the revenue, using debt to compensate. The "perfectly legal" aspect points back to the tax laws, and, more particularly, at the undue or even improper influence of the business sector in Congress. In fact, lest it be concluded that the business calculus is the reason for the tax avoidance (which is legal, unlike tax evasion), the financial power of business tilts the field not only by having too much influence in the crafting of tax legislation, but also in being able to hire ex-IRS employees to get "the inside scoop" on avoidance tactics. I now turn to the case of General Electric (GE) in 2010. 

General Electric reported global profits that year of $14.2 billion, $5.1 billion of which came from operations in the United States. Rather than owing any federal income tax on the $5.1 billion, however, the company claimed a tax benefit of $3.2 billion. Behind the “fierce lobbying for tax breaks and innovative accounting that enable[d] [the company] to concentrate its profits offshore,” the company’s tax department was led at the time by a former U.S. Treasury official, John Samuels.[2] Moreover, the department included “formal officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.”[3] G.E. had essentially brought the tax-writing and enforcement skill of the U.S. Government “in house.” As paid employees of G.E., the former government expertise was put under the aims of the private company, an organizational machine solely oriented to maximizing profit, whether short term or long.

Generally speaking, companies of such enormous financial wherewithal that annual profits are in billions of dollars can appropriate and harness governmental machinery for the sake of private gain. The issue here is not simply the existence of too much tax avoidance, hence at the expense of fairness; rather, the underlying problem is whether the existence of such large and powerful private enterprises is compatible with a democratic form of government. It is certainly not in the interest of the business sector that this question be interjected into public discourse. So the vested powerful interests, working through political stand-ins and the media, which itself is largely corporate, preoccupied with secondary issues, such as nominal individual tax rates, off-shore factories, and NAFTA. NBC, for instance, was owned by G.E. before being bought by Comcast. 

To be sure, the mantra well-known to many Americans in the 1950s, What is good for GM (or GE) is good for America, was supported by the notion that economic prosperity benefits everyone and a profitable company hires more employees than does an unprofitable company. What if the societal absorption of the value of this ideology made it possible for the business sector to have so much influence in Congress that the corporate taxpayers have practically been able to write their own tax laws? What if a pro-business society is too vulnerable to the rule by wealth (i.e., a plutocracy) that this underbelly can even keep itself hidden from view? Flaws exist in the assumption that what is good for GM or GE is good for America. Abstractly speaking, the good of a part is not necessarily the good of the whole. Private gain is more limited than is public gain. So if some of the parts come to dominate the whole and even define it in their own terms or image, the other parts and even the whole can be taken advantage of on the tilted board.

1. David Kocieniewski, “G.E.’s Strategies Let It Avoid Taxes Altogether,” The New York Times, March 24, 2011.
2. Bonnie Kavoussi, “General Electric Avoids Taxes By Keeping $108 Billion Overseas,” The Huffington Post, March 11, 2013.
3. David Kocieniewski, “G.E.’s Strategies Let It Avoid Taxes Altogether.”

“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.

Western Banks Lending to Asia's Expanding Middle Class: Profit vs. Planet

In April 2013, debt levels in Asia were reaching record levels as international lenders were extending short-term loans to a growing middle class. Non-mortgage consumer credit in Asia outside of Japan had increased 67% from 2007 to reach $1.66 trillion by the end of 2012. This credit included credit cards and loans for cars, electronic products, and appliances. Outside of Japan, Asian car and motorcycle loans nearly doubled from 2007 to 2012, to reach a record $219.7 billion. Appliance and electronics loans also more than doubled, reaching a high of $10.9 billion. Meanwhile, credit-card loans grew by 90% to reach a record $234.1 billion, according to Euromonitor. The incentive for the banks is not difficult to fathom. At the time, more than half of the world’s middle class was expected to be in Asia by the end of the decade. That translates yearly into more than 100 million additional people per year. For the banks, this was an opportunity since at least the beginning of the decade because growth was not possible in the European Union and the United States on account of the financial crisis of 2008 and the ensuing European debt-crisis that extended well into 2013. The European Commission of the E.U. was also working on regulatory proposals that would limit the incentives of mortgage servicers to produce too many “bubble-creating” mortgages. 
So Western banks had an incentive to look east for fruitful markets. Interesting, government regulators in China, Malaysia, and Indonesia had began reining in mortgage, credit-card and auto/motorcycle lending, perhaps in fear of an Asian financial crisis. Had Western bankers learned their lesson, or were they unwittingly bringing their reckless mentality to Asia? Two levels of concerns can be extracted from this case. I contend that the more immediate concerns were crowding out attention that ought to have been paid to the larger, but longer-term, problems.
One sort of concern suggests that the international banks may have been providing too much credit to people entering the middle class. Such borrowers, similar to the sub-prime mortgage borrowers in California, Arizona and Florida, may not be able to handle their new debt-loads. At the beginning of 2013, debt levels relative to individual income in many Asian economies, including Malaysia, China, South Korea, Thailand, Indonesia and India, were already up to 30% higher than in the United States. This would suggest that the Western bankers were again poised to be reckless. Citigroup’s claim that it was expanding its lending to the middle class in Asia in a “disciplined manner” can thus be challenged. More particularly, the financial-growth incentives facing the bank, given the continued weak economies in Europe and North America, can be critically analyzed. Did Citigroup's bankers accurately anticipate whether another debt melt-down might have resulted from the trend in debt-loads, or was this low-probability, high-risk scenario too long-term oriented to be factored in sufficiently? I don't know the answer to this, but I submit that baleful consequences that are larger and presumably further off tend to get pushed aside by the human mind, given the preoccupation with today, hard-wired by natural selection.
Even if we take Citigroup at its word that it was lending in Asia in a “disciplined manner” in spite of the rather unique opportunity for bank profit there, we can ask whether international banks have a responsibility to society, and even the species itself by resisting the temptation to immediately extend the rising middle class higher in spite of "growth pains" that could be anticipated. To a banker, this might have seemed like muzzling the golden goose, particularly given the soft economies in North America and Europe at the time.  What if his or her competitors would have stepped in anyway? Responsibility involves some voluntary restriction on a company’s financial self-interest that may require industry-wide commitment.  What are the chances that no one would cheat? Very low, I submit. Nevertheless, duty, a word mostly lost to today's short-sighted narcissism, is not meant to be convenient; otherwise, it would not operate as a tug on a banker’s conscience.
The upsurge in auto loans in Asia is a case in point. That is, is is responsible to facilitate an expansive auto market especially in China's major cities, which had already been known to be notable polluters. After 2000, the number of cars in use in China was doubling every year. Meanwhile, the Chinese were building an “interstate" highway-system that would dwarf the network of highways in the contiguous United States. Loans enabling an exploding middle class to buy cars increased the global demand for oil, resulting, other things equal, in a higher price at the gas pump. Would the magnitude of the surge in projected fossil-fuel use in China drain the Earth’s oil reserves before alternative sources of energy could pick up the slack, or should the Chinese too be able to enjoy a car economy like those in the West? It would be too easy for the Western bankers to resound with the latter at the expense of the former due to the allure of greater profits over duty to the species.

More people=More cars=More pollution    source: Businessweek

The viability of the species enters the equation of course because of the scientifically-proven link between carbon emissions by humans and climate change in which both the atmosphere and oceans of the planet have been warming since well before 2013. To be sure, it could indeed have been argued that the Asian middle-class deserved the same freedom and ease provided by owning a car in the twenty-first century that the American and European middle-classes enjoyed in the twentieth century. Fair is fair, right? However, the global climatic threat to the species had not been pressing during the industrial revolution and through the ensuing shizogenic (i.e., a maximizing variable) consumerism of the twentieth century. By  analogy, even though a person starting to smoke at 50 can point to a person starting at 20 and say, “I should be able to have my years of smoking too,” the person who smokes at an older age faces more health risks than the person who smokes when young. Is it worth a heart attack to a 50 year-old to insist on having years of smoking too?  Similarly, the question of the additional oil for more cars, as well as more coal-sourced electricity powering electronics and appliances—all being facilitated by the upsurge in loans—can legitimately be answered differently when it is accurately (and thus justly) feared that unless the carbon-use trends reversed themselves everywhere, the species would likely face dramatic negative effects all too soon, with the very survival of the species itself perhaps hanging in the balance further out.

As these diverging patterns demonstrate, the threat of over-population is not uniform across the globe.   source: fashionzombie.net

In terms of public policy, if corporate social responsibility is not strong enough given the addictive allure of profit-seeking to ward off even current use that could result in a very different climate, perhaps resulting in a new equilibrium beyond the bounds of human habitation, then government regulation may be humanity's only option to pick up the slack. Because the problem is global in nature, this option is also problematic. 
Because the interests of the government of China and other countries do not take kindly to economic costs inflicted on their respective peoples for fear of political unrest and economic recession,  the absolutist interpretation of national sovereignty might finally have to be compromised in order, ultimately, for the species to survive or at least not be inundated even in the twenty-first century with climatic havoc. To the extent that the explosion of the human population is the root cause of the increase in carbon (and methane) in the atmosphere and oceans, even government regulation enforced at the global level would be difficult, even ethically, especially as countries fear an older demographic in a declining base. It would be a lot to ask bankers to take this on. Nevertheless, societies and governments can legitimately ask banks not to exacerbate global warming by acting so as to dramatically increase human consumption too much given the business environment. As the managerial role is profit-seeking by design and incentive, however, it is not likely that bankers would agree. Hence I have viewed corporate social responsibility as a creature more of marketing than duty, especially in societies in which the honor of duty is not valued. 

Source:

Kathy Chu, “Consumer Loans Surge Across Asia,” The Wall Street Journal, April 22, 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.