Corporate Social Responsibility – Why Sometimes Large Corporations Don’t Get It Right

We need to understand that even the biggest of corporations don’t always get it right. Sometimes when we think about the humanitarian goals of a big corporation, we automatically think that the company is already doing great things, but that is not entirely the case. Yes, companies are giving donations to causes but most likely the causes they choose have nothing to do with the business model. The goals are weak, the projects unrelated, and the financing is not sustainable and can change from year to year.

For example, a major airline may choose to donate money to local charity A. The only connection that the airline has with Charity A is that it is located in the same city. On the day the check is written, a photo is taken and the media covers the one-day event. While charity A is thrilled with the gift, the airline has no more involvement in the outcome of its investment and the services provided by the charity. It may or may not serve to enhance the for-profit business and its stakeholders. The next year the airline chooses to write their big donor check to a different local charity, leaving charity A with a budget deficit because it has built its programs on the previous gift. This is not a sustainable model.

What if the airline took a look at its core business model, its goals, its clients, its suppliers, and its employees before considering its CSR initiatives? Isn’t the airline in the business of travel both for passengers and cargo? The majority of non-profits pay full retail for travel and cargo space. Why? This only serves to use up valuable money in their budget that should be used to help more people. Wouldn’t the airline be better served by aligning with other business clients to support nonprofits through it core competencies? What if, instead, it partnered with a business-to-business client in the pharmaceutical industry and a global health non-profit (Charity B). All of these people could work together to provide life saving medicines to those in need.

By simply filling vacant cargo space, the airline strengthens its position with its pharmaceutical corporate client, securing loyalty and meets a desperate need of the non-profit (Charity B) with a program that matches the airline’s DNA. That is an ongoing story and one that readers and future customers will love. This model has much more impact and is much more sustainable than the writing of a donor check.

Every corporation needs to think differently about how its resources, core business products and services can affect the world in a positive way. By doing this, we are almost certain that business relationships can be strengthened, clients will become more loyal, and there will inevitably be greater social impact.

The purpose of RAISE is to change the hearts and minds of business leaders to make social impact as important as their bottom line.

Leave a Reply