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International Relations - Trade Page

Corporate Social Responsibility: An Idea Whose Hour Has Arrived...by Dr. Robert Lee - Open Grants, East West Center, U. of H. (Dr. Lee was a Senior Fellow at the East-West Center (1972-73), and has returned to his position at San Francisco Theological Seminary in San Anselmo and Berkeley. He has written 12 books and was guest speaker at LWV Annual Meeting Luncheon in April 1973.

This 28-page paper was delivered as an Open Grants lecture at the East West Center. In its three parts, the first seeks to document the emergence of the idea of corporate social responsibility; second, gives an explanation for this emergence; third, points out some unresolved issues. The League of Women Voters has recently completed a study and consensus on foreign trade in general with a particular emphasis on the role of the multi-national corporation. We support the expansion and vigorous role of the MNC's, but this paper, which eventually will be incorporated into a book, sheds a new dimension to the roles of the MNC along with its traditional role of international expansion for profits and economic growth.

In explaining the new ideology of big corporations such as Sears, US Steel, IBM, ATT, GE and DuPont, noted economist Robert Heilbrener detects breaks from harsh capitalism into new "responsible, socially aware" capitalism. It is documented in the. many new Board positions with public interest directions (Urban Affairs, Community Affairs, Drug Education, Consumer Safety). To be sure, there are discrepancies between the rhetoric and achievement--some projects being purely cosmetic. The changing business climate is there. However, the Third Century Dreyfus Fund, begun by the Dreyfus Corp., raised $24 million in capital investing only in companies with good records on pollution control, product safety, minority medicine as well as other fields affecting the quality of life.

There has also been a shift from the entrepreneurial spirit to a managerial spirit in the funneling of a corporation--the latter calls for spirited organizational teamwork and collaboration more sensitive to human relationships. The ownership and control of huge corporations have continuously dispersed themselves among a swelling army of stockholders. This means the corporation must increasingly operate under a public consensus. Thus, managers no longer exist to maximize profit, but rather to plan profit growth, spread profit out evenly, maintain continuity and existence, and surely avoid loss..

Another interpretation based on a psychological perspective is the hierarchy of needs: 1) for life--a marginal or struggling company, 2) for security--for safety, 3) for belongingness--social needs, 4-) for respect and self-respect--ego needs and 5) for self-actualization--self fulfillment needs.

The "newbelievers" in the doctrine of social responsibility for the corporation face a credibility crisis ahead--a standing invitation for critics from both sides of the pendulum. Despite notable domestic achievements, corporate power structures continue in military support systems overseas. Another point made is with middle management promotions being judged solely by traditional profits and productivity-- consider the bank branch manager seeking to upgrade the community via high-risk loans yet criticized for the higher rate of failure by such loans. How does one measure social responsibility as it is done with annual financial statements? If corporations are required to publish a "social audit", what indications could be used? Already there is are active growing body interested DIY these unresolved areas and this movement in itself is a good omen.

Melvia Kawashima

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