Against the Grain? Companies That Push CSR Beyond Their Own Interest
During their many years of research, Sandro Castaldo, Full Professor Department of Marketing at Bocconi, and his colleagues have established a clear relationship between Corporate Social Responsibility (CSR) and performance in terms of higher level of customer loyalty, higher level of word of mouth. Along with Bocconi's Nicola Misani and Antonio Tencati, Castaldo decided to look at an emerging phenomenon: company that decide to benefit stakeholders in an innovative way that goes beyond commonly used rationales such as win-win opportunities, creating shared value, or corporate philanthropy.
Some firms are initiating pro-stakeholder activities and policies that transcend conventional CSR conceptions and seem inconsistent with their business interests or economic responsibilities. These initiatives, which are neither legally nor morally obligatory, are responding to calls for a more active role of business in society and for a broader interpretation of CSR.
In "A Qualified Account of Super Erogation: Toward a Better Conceptualization of Corporate Social Responsibility," published in Business Ethics Quarterly of the Cambridge University Press, Castaldo, Misani and Tencati borrowed from ethical theory to develop the concept of "super erogation" to look at examples in CSR and marketing case histories where companies did "something more" without expecting any kind of immediate payoff and even acted against what would seem to be their own interests.
"We created a model of qualified 'super erogation,' which in Latin means 'more than required,'" said Castaldo. "We are able to understand that some companies are pushing to change their goal system to achieve something more than the usual CSR done by profit-oriented firms. This changes the company's business model."
The paper illustrates this emerging phenomenon by describing initiatives at five companies: Coop, Patagonia, REI, General Motors, and Interface. Patagonia's 2011 ad campaign "Don't buy this jacket" would seem to be against the firm's own interests at first glance. It ran an ad campaign leading up to the Christmas shopping season asking consumers to join its "Common Thread" initiative to reduce sales of new clothing. Coop did something similar with bottled water, inviting customers not to buy bottled water but to opt for a water purification system instead.
General Motors, instead, made a "super erogation" to its 48,000 union workers in 2015 with an unexpected bonus. Each worker received $9,000 in profit sharing, or $2,400 more than General Motors was contractually obligated to pay.
Super erogation has visible positive impacts on the business community in terms of raising the bar and activating new learning processes, the study concluded. In terms of practical applications, a better understanding of how super erogation affects long-term results would be useful in defining management goals, said Castaldo. In future research, he aims to demonstrate a direct link, helping companies shift away from a short-term approach.