Why Every Company Needs a CSR Strategy and How to Build It

Kash  Rangan; Lisa  Chase; Sohel  Karim

Working Paper | HBS Working Paper Series | 2012

Why Every Company Needs a CSR Strategy and How to Build It

by Kash Rangan, Lisa Chase and Sohel Karim

Abstract

The authors argue for a strategic and pragmatic, rather than ideological, approach to Corporate Social Responsibility (CSR) that contrasts sharply with the prevailing Shared Value framework offered by Porter and Kramer (HBR; Jan.-Feb. 2011). We assert that, despite criticisms of and debate about the value of CSR initiatives to society and to corporate profitability, every company needs a CSR strategy that reflects both its desire to address social, humanitarian and environmental needs, and its core competencies and institutional capacity. Using a "three theatre" CSR framework, the paper demonstrates why the question for corporations is not whether to engage in CSR, but why they need to develop CSR strategies that both enhance CSR practice within each theatre and coordinate the independent efforts from across the three theatres. Our perspective is a marked departure from the Shared Value framework, in that we embrace the inherent value of corporate philanthropy (theatre 1) on one end, as well as transformational business models with potentially limited short-term financial returns at the other (theatre 3). Furthermore, the paper seeks a moratorium on the fruitless debate about CSR definition and societal value, instead providing pragmatic guidance for corporations to significantly improve the social and environmental impact of their CSR initiatives through a holistic and strategic process of continuous CSR auditing, editing and development.

Keywords: Corporate Social Responsibility and Impact; Corporate Strategy; Values and Beliefs; Profit; Practice;

Language: English

Format: Print

31 pages

Read Now

Citation:

Rangan, Kash, Lisa Chase, and Sohel Karim. "Why Every Company Needs a CSR Strategy and How to Build It." Harvard Business School Working Paper, No. 12-088, April 2012.

Gilead had come up with an innovative drug for Hepatitis C, which affected 180 million people worldwide. The drug was priced at $1,000 a pill for the US market. Gilead had to decide how to price and market the pill in developing countries that bore the brunt of the disease. The company had earned accolades for its work in HIV/AIDS, where its innovative medicines now accounted for 60% of all patients on Anti-Retroviral (ARV) medicines. Much of this was accomplished through generic licensing, which brought a $10,000/year treatment regimen down to $100! Should the company replicate that strategy for Hepatitis C? If so, how would its US Healthcare customers, who were paying $84,000 per patient, react? On the other hand, Gilead had to balance the interests of its shareholders, who paid $11 billion for an acquisition that led to the new Hepatitis C drug.

Jai Vakeel, a nonprofit organization in India, serves individuals with Intellectual Disability (ID), those with an IQ below 70. The organization was founded by the parents of a child with Down Syndrome, and they (and their next generation) steadily built the organization over 60 years to the become the largest such organization in India. Yet the organization served only some 1,000 children annually when there were millions more needing the healthcare, education, and skills to lead a decent life with ID. This case describes the evolution of the organization from the founder’s family (six decades) to the first CEO from outside. As Archana Chandra appointed in 2013 brings about several changes to the organization, she wonders how to scale the organization from the current 1,000 people it serves annually to at least 10,000 and then to the many millions who are in need.

Faculty & Research

Why Every Company Needs a CSR Strategy and How to Build It

Abstract

Citation:

About the Author

More from the Author