Wednesday, June 29, 2005

Socially Responsible Behaviour in Organisations

Socially Responsible Behavior
Developing Virtue in Organizations

Quy Huy , Maurizio Zollo , Susan Schneider
INSEAD Working Paper, Reference: 2005/40/SM/CMER

Business corporations are facing greater pressure from stakeholders to behave responsibly. Today's corporation may employ entire communities and their products or services can influence the behaviours and lives of sometimes millions of people across the world. What then could be more natural for these corporations than to increase their participation in the well being of the societies and peoples they service...their stakeholders? Corporate governance has received much airplay over recent years, with corporate scandals raging and consistently proving that unfortunately, business leaders do sometimes behave irresponsibly. Consequently, much attention has been focused on improving the organisational model and governance methods, but what about the individuals at the helm of things. What are their individual roles in taking on, or avoiding, the expectations and demands of stakeholders (beyond those of financiers)? The history of mankind has shown us that no matter what governance rules and systems are in place, it is the human being enforcing them who is the ultimate gatekeeper. Looking at the recent corporate scandals, it does not appear that the highly-educated, highly-paid manager can consistently claim to be a 'better' person than the next guy... And to date, the ethics debate has centred around a set of normative rules dictating behavioural principles with seemingly little long-term or lasting effect.So does there exist a measurable leaning to 'goodness'-something that can be sought out- something that can be fostered or emulated? Is it possible to know whether a manager will be more likely to do the 'right' thing, whether he will be truer to a socially responsible ethic? In this research paper, Socially Responsible Behaviour: Developing Virtue in Organizations, HEC's Susan Schneider and Karin Oppegaard are joined by INSEAD's Associate Professors of Strategy Maurizio Zollo and Quy Huy to examine these questions.

Just what characteristics identify or favour Socially Responsible Behaviour (SRB)-or a socially responsible manager.The authors firstly propose a definition of SRB as: 'decisions and actions made with the primary (although not exclusive) purpose of enhancing social welfare'. Through an exhaustive examination of earlier and current studies and statements, the individual's behavioural antecedents are viewed and catalogued through the eyes of Social Responsibility. Not in any way ignoring the contextual or organisational factors, the group affirm however, that despite these constraints, managers do have a choice and therefore personal responsibility for their actions. But what causes one manager to behave in a more socially responsible way than another?The study correlates a number of psychological traits with SRB and takes the analysis one step further by specifying a framework of cognitive factors, personal values and emotions that would actually foster SRB. The outcomes of this study, including the proposed dynamic SRB model, would lead to interesting and pertinent applications; such as the measurement of inherent or acquired SRB traits in managers, and also as such traits are identified and identifiable, the possibility of building both learning and organisational structure to foster, monitor and even reward the ensuing behaviours.

The paper concludes that such a model would allow for the dynamic evolution of SRB within the organisational context and that by encouraging and practicing such behaviours, that they would become routine. Practice makes perfect! There is no doubt that Socially Responsible Behaviour can be either positively or negatively influenced by the organisational policies and practices, but this paper argues for the usefulness of also applying time and energy to developing the individual equation of Corporate Social Responsibility and fostering the individual managerial behavioural response to growing demands for CSR. If some of the managers involved in recent corporate scandals were perhaps endowed or nurtured with a deeper sense of social responsibility, then maybe their companies would have also been led in a different direction...Socially responsible conduct can stem from individuals, whether with or against the general flow of an organisation. The authors lead us closer to how this could be brought about through the manager's desk.

COpyright & Source:INSEAD 2005

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