Integrating Corporate Responsibility into Day-to-Day Operations: An Interview with Steve Rochlin
by Kali Saposnick

from Leverage Points Issue 44

Copyright © 2003 Pegasus Communications, Inc. (www.pegasuscom.com). All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from Pegasus Communications, Inc. If you wish to distribute copies of this article, please contact our Permissions Department at 781-398-9700 or permissions@pegasuscom.com.

Steven Rochlin is director of research and policy development at the Center for Corporate Citizenship at Boston College. In that capacity, he supervises the Center's research initiatives, including leading various research projects and coauthoring reports on corporate citizenship. Steve will be a keynote speaker at Reshaping Corporations: Adding Value Through Responsible Business Practices, a hands-on, two-day workshop in Boston, Massachusetts, on January 25–27, 2004 (learn more about the workshop), where he will discuss the practical challenges for a company trying to implement responsible practices. In the following interview, Steve shares some of the trends he sees in the field of corporate citizenship.

In today's market economy, in which most corporations' foremost obligation is to their shareholders, making the business case for corporate citizenship is often a Herculean effort. Part of the reason is that many companies don't yet recognize the value for themselves in institutionalizing and integrating responsible practices throughout the business. But an emerging perspective on responsibility, based on three decades of research, might help them see the potential opportunities. This new view argues that large companies have obligations to a broad web of stakeholders—and that investing in social and environmental health may be the best thing for business performance.

"We're living in a fascinating time," says Steve Rochlin, "in which we can clearly see the powerful force a market capitalist system is for social and economic development—and the extent to which large corporations have become the main global entity for delivering on the promise of that system. Yet also apparent are the changing expectations of a variety of interested parties, such as governments, interest groups, activists, and the public, around what roles these companies should and could perform to help meet a wider set of social and economic justice objectives."

According to Rochlin, in response to these shifting expectations around the relationship of business to society, many companies are starting to recognize the need to devote greater attention to managing their affairs with important external stakeholders. But unfortunately, their commitment is still mostly limited to complying with government regulations and standards. "While compliance is an entirely legitimate practice," Steve says, "it often reflects leaders' resistance to fully upholding responsible business practices. To become corporate citizens, they must shift from viewing responsibility as an afterthought or imposition to embracing it as a core strategy for adding value to the business as a whole."

A Core Strategy
In order to help companies adopt corporate citizenship as a core strategy, the Center has focused on developing the value proposition. "Part of the challenge," Steve says, "is helping executives see the myriad ways they can contribute to and benefit from promoting social and environmental welfare while adding value to the financial bottom line. A wealth of research is now showing the advantages of investing in responsible business practices, such as reduced project costs, more favorable government regulation, easier entry and exit into and from markets, positive "word-of-mouth" advertising, increased employee retention and morale, more efficient production processes, and effective management of community-based stakeholders. We let executives know that corporate citizenship can be part of business practices that build the firm's assets and don't create further liabilities."

In initial conversations with companies, Steve focuses on three questions: (1) How do you build a strategy for corporate citizenship that is aligned with the rest of the business? (2) How do you embed that strategy in the practice of all functions? (3) How do you infuse it into the values and culture? In this way, leaders begin to think through how corporate citizenship can help their businesses live up to their values, reduce the risks that either stakeholders pose to the business or the business poses to stakeholders, and create new opportunities in the market or for healthier communities, societies, and environments.

Once companies uncover some of the answers to these questions, the next step is to examine the change processes that need to occur in order to integrate corporate citizenship into the day-to-day operations. Typically, mid-level managers are the leaders and drivers of these changes, so consideration must be given to the tools they will need to shift the company's structure and dynamics at many different levels. These efforts also require senior leadership to play an active role in engaging all line and staff functions in supporting the economic, social, and environmental bottom lines.

Linking Theory and Practice
Because this change process can be difficult, much of what Rochlin does is work with companies to try to understand the link between the theory and practice of corporate citizenship. "In that sense," he says, "our work is often designed to be action research projects. We introduce those accountable for implementing this type of change to the theoretical models we're building around the integration and institutionalization process, standards of management, and world-class performance. Our hope is that these managers then become co-developers, eventually moving forward to design and implement the ideas we're proposing."

At the same time, the Center is studying and working with companies that have already made significant progress in corporate citizenship and are building on their successes. For example, HP and IBM continue to develop a strong legacy of linking business strategy to community, environment, and employees. Companies such as Dupont are looking at corporate citizenship as a source of innovation and are thinking creatively about how these conversations around strategy fundamentally change their businesses and the products they offer.

"In the eight years that I've been at the Center," Steve reflects, "corporate citizenship has moved from the far periphery closer to the center of the concerns of many large companies. We see this in the fact that many more are producing public social and environmental reports. They're beginning to professionalize the management around their responsible practices. And they're making stronger, more visible commitments to these practices. So, there's progress being made, but we still have a fair way to go."

Kali Saposnick is publications editor at Pegasus Communications.