C.B. Bhattacharya Defines Good vs. Bad Corporate Social Responsibility

C.B. Bhattacharya is the foremost scholar in corporate social responsibility (CSR). He defines CSR is "a commitment by a company to maximize society or environmental well-being through business practices, policies and resources".

In other words, CSR is related as much to how one operates the company as it is to the programs one chooses to invest in.

C.B. notes that there is a process that consumers or stakeholders use in judging CSR. It involves three criteria:
1. Understanding: Many companies invest in CSR but do not do enough to make people aware of what they are doing.
2. Usefulness: The CSR program must be seen by stakeholders as being of benefit to them. Companies spend a lot of time talking about the money they spend in CSR. Stakeholders care about the usefulness, not the amount.
3. Unity: the CSR program must be integrated with the strategy of the company.

C.B. has said that philanthropy is not CSR and I completely agree with him. Philanthropy is giving away money or in-kind services to something of importance to society without regard for the value it creates for the company. CSR, on the other hand is not only related to doing good, but also to doing well. It should build the company's value as it builds value for others. It is symbiotic.

When companies contemplate CSR, they must make it part of their overall brand or reputation strategy. It is part of it, not an add-on program. If companies can relate the program to the needs and interests of the stakeholder the program is intended to serve, it will have a greater chance of success. Consider, for example, the great success of the J&J "Campaign for America's Nursing Future", and investment of J&J resources to build the image and attract people to the nursing profession--one of the key customer groups of J&J. The company did well by doing good. On the other hand, consider many of the pharmaceutical companies that report spending $25M on CSR, yet cannot build their reputations because the programs are often not related to the overall strategy of the company, they are not of importance to stakeholders, and few people know about the particular programs. The amount spent might as well be written off as philanthropy--all well and good, but do not expect anything in return.