McDonald’s, Tesco and the limits of CSR

The sentencing of Kenneth Lay and Jeffrey Skilling – almost certainly to life imprisonment – is an awful reminder of what can happen when corporate social responsibility (CSR) is abused. Enron, famous for its high-profile CSR stance during the

The sentencing of Kenneth Lay and Jeffrey Skilling – almost certainly to life imprisonment – is an awful reminder of what can happen when corporate social responsibility (CSR) is abused. Enron, famous for its high-profile CSR stance during the 1990s, parroted the language of Martin Luther King Jr, while its principal executives were cynically engaged in off-balance sheet corruption that ended by destroying one of the largest US companies.

Even in more honestly-run companies, joined-up CSR policy is not for everyone. Indeed, many companies avoid one for very good reasons. Not so much because of the expense and executive time involved, though these will be considerable. But because they fear becoming hostages to fortune. The rough and tumble of everyday business life may sometimes require pragmatic decisions that are hard to justify in the wider public arena. Yet, if a company has embarked on a high-profile CSR policy, it is likely that every such decision will be magnified in the media as corporate hypocrisy at its most unappetising.

For this reason, it is interesting to see McDonald’s and Tesco, in their separate ways, embarking on such a high-risk strategy. McDonald’s is still smarting from the classic PR blunder known as McLibel, which has had a lasting negative impact on its UK image and sales. UK chief executive Steve Easterbrook is taking steps to make his company more “touchy feely”. A new website, makeupyourownemind.co.uk, which addresses the company’s stance on the environment, animal welfare, the health debate and so forth, is pretty radical by McDonald’s standards. Easterbrook also courageously chose to appear in a televised confrontation with leading McD-basher Eric Schlosser – author of Fast Food Nation and chief inspiration of a Hollywood film on the subject. But was it wise? The takeaway from TV interviews was more about McDonald’s enthusiastic interest in selling oversize burgers to England World Cup fans than any new-found sense of social responsibility.

Tesco’s announcement with much advertising fanfare of its Community Plan, seems altogether more assured. The timing of McDonald’s espousal of an “open door” policy appears related to its fears of another public beating, this time from Schlosser’s film. Tesco, by contrast, has an almost impregnable brand: consumers, apparently, can’t get enough of it. It is the lobbyists who are carping, and then about the size and market influence of the supermarket chain rather than what it sells. All right, there is a contemporary reason for Tesco’s concern, in the form of a Competition Commission inquiry. But these have come and gone before without noticeable CSR activity. The difference now is Tesco’s fear of catching that very British disease, tall poppy syndrome (MW, January 27, 2005).

Whether the subtle but nebulous Community Plan will actually work or, more likely, occasion hollow laughter, remains to be seen. Sometimes blunt simplicity is better than the most sophisticated CSR. Cadbury Schweppes chief executive Todd Stitzer recently made an uncompromising stand as “an unapologetic seller of treats and refreshments”. He could do so in the confident knowledge that his company had recently made one of the most competent CSR statements in recent times by acquiring Green & Black’s. Like rock, the message will run through the business and beyond.

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