CSR and Modeling (Revision)｜企业社会责任与建模

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Compare and evaluate the Constituency and the Sustainability Models of CSR in terms of their effectiveness in balancing maximising profits with benefitting society

比较和评估企业社会责任的选民和可持续性模型在平衡利润最大化与造福社会方面的有效性

Introduction:

There are many methodologies to discuss the basic attributes of a business company. Whether a company represents a collection of natural persons or a corporate entity usually depends on different models. Through the comparison and analysis of two different types of corporate social responsibility, this paper discusses how to balance the maximum profits of enterprises and social benefits more effectively. And how to balance the relationship between morality and law.

企业社会责任

本文通过对两种不同类型企业社会责任的比较与分析，探讨如何有效平衡企业利润最大化和社会效益，以及如何平衡道德与法律的关系。

建立模型

底层逻辑是C模型，属于规则层面，直接影响公司生存发展，是人合性与资合性保障的前提。斜面是S模型，属于道德层面，是站在战略高度审视公司未来与社会责任之间平衡的视角。而处于顶点的问责制(accountability)较好地制衡了法律强制性与道德自发性的关系。

I. Comparing the two Models (the C model and the S model) of CSR 

Archie B. Carroll (1991) showed that CSR has emerged as an unavoidable priority for business leaders in each nation. But sometimes they set business against society. Furthermore, he suggested that appropriate way need to be used rather than common ways to make their specific strategies. In fact, if corporations can realize and seize many great opportunities to benefit society, they can gain much more than a cost. 

Archie B. Carroll表明，企业社会责任已成为每个国家商业领袖不可避免的优选事项。如果企业能够实现并抓住许多造福社会的伟大机遇，他们将获得更多。

A.  The definition of the C model of CSR

According to David Millon (2011), the C model looks the company as an organization composed of several individual groups of people, each of which has a common interest binding. [1] In the meanwhile, there are obvious conflicts of interest among these groups. For instance, generally the purpose of shareholders is to pursue the maximum benefits from their investments, while employees hope they have friendly work environment and get satisfied salaries. 

In addition, creditors hope that their contracts signed with the company can be performed smoothly, the company is in good condition, and their claims can be guaranteed. As a result, the relationship between these different groups is like a balance, which is difficult to maintain and ensure the interests of all parts at the same time. Whether shareholders’ or non-shareholders’ interests should be given priority may even be at risk of violating human rights in some undeveloped countries.[2]

选民模型更注重与公司有利害关系的个人和利益群体，而这些群体之间往往存在利益冲突。如：股东希望投资收益最大化，员工希望获得更好的工作环境和令人满意的薪水，债权人则希望公司状况良好，合同顺利履行，债权得到保证。因此，不同群体间的关系就像天平两端。在一些不发达国家，优先考虑股东利益还是非股东利益，甚至存在侵犯人权的风险。

B. The definition of the S model of CSR

The S model is based upon taking the corporation as a whole and discussing the balance between the pursuit of short-term profit maximization and long-term sustainable development. [1] This model emphasizes more on the responsibility and contributions of enterprises to the society. For a great company, to survive or to prosper is a significant choice. 

Lei Jun, founder and chairman of China’s Xiaomi Technology, for example, aims to sell the world’s best phones at half the price and make them affordable for everyone. He chose to do things that were valuable in the long run, reducing shareholder dividends and increasing the company’s capital in the early years of the company in order to achieve sustainable growth. After all, “Management’s catering to shareholder preferences also impedes thinking about long-run objectives because the corporation’s future performance depends in part on expenditures that are made today.” [1] 

可持续发展模型以企业整体为重，探讨追求短期利润最大化与长期可持续发展之间的平衡，该模型更强调企业对社会的责任和贡献。对于一家伟大的公司来说，生存或繁荣是一个重要的选择。例如，中国小米科技的创始人兼董事长雷军的目标是以半价销售全球最好的手机，让所有人都能买得起。为了达到可持续的增长，他选择做长期有价值的事情，减少股东分红，增加公司资本。毕竟，管理层迎合股东偏好也妨碍了对长期目标的思考，因为公司的未来业绩部分取决于今天的支出。

C. The differences of the C model and the S model

Firstly, these two models have respective concerns. The C model of CSR is centered on balancing the interests among shareholders, directors, supervisors, executives, employees, creditors and other individuals who have interest’s relationship with the company, while the S model concentrates more on the overall contribution of the corporation to the society and the value created. Thus, the former is more internal, while the latter is more external.

Next, these two models have their own strategies. In the C model, the principle of profit distribution provides many different strategies to meet the respective targets of different companies. Generally speaking, measuring the success of a company, eight or nine times out of ten, will be considered as profitability. That is not to say the S model does not focus on profitability, just that it tends to focus more on profitability and dividends, while also trying to take into account people who seem to be irrelative to the company.

Therefore, whether these profits can be used for the long-term development of the company or to satisfy the interests of shareholders depends on the vision and the planning of the company. Different beliefs determine different strategies, and different strategies determine whether you want to create a big company or a great company. 

C模型以平衡股东、董事、监事、高管、员工、债权人和其他与公司有利害关系的人之间的利益为中心，而S模型则更注重公司对社会的贡献和创造的价值。

在C模型中，利润分配原则提供了许多不同的策略，以满足不同公司各自的目标。并不是说S模型不注重盈利能力，只是它更倾向于关注盈利能力和股息，同时试图考虑那些似乎与公司不相关的人。

因此，不同的战略选择决定你将成就一家大公司还是一家伟大的公司。

II. Evaluate the C model and the S model of CSR

A. Embracing money or embracing morals is a new challenge.[4] 

With the continuous expansion of the enterprise scale, the enterprise’s social responsibility will gradually become larger. “The corporations of the future need to serve the public, with ownership widespread among the public, and with labor so fairly treated that it will took upon the corporation as its friend.” [5] Sometimes there is a paradox: do companies that seek to maximize profits have no ethics? Is this a moral kidnapping or a social responsibility? Essentially, corporation social responsibility should be voluntary rather than obligatory or compulsory. Mallika Tamvada (2020) indicated that both legal responsibilities and moral responsibilities have an intertwined relation with ethics. [6] In China, there are many corporations that hire disabled people to exempt them from taxes or reduce costs. Maybe this is a wise way to gain both money, morality and social responsibility. 

随着企业规模的不断扩大，企业社会责任也随之扩大。未来的公司要为公众服务。但往往存在一个悖论，即：寻求利润最大化的公司就没有道德吗？这是道德绑架还是社会责任？从本质上讲，公司的社会责任应当是自愿的，而不是义务或强制性的。马利卡·塔姆瓦达（2020年）指出，法律、道德与伦理有着相互交织的关系。在中国，许多公司雇佣残疾人以免除部分税收或降低成本。这也许是获得金钱、道德和社会责任的明智方法之一。

Take the Ford Motor Company for example, Mr. Henry Ford is the dominant force in the business of Ford. He said: ‘My ambition is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business.’ He considered that it is more important that benefiting the public than pursuing the profits. Obviously, he preferred to contribute to the morals and the society.

以福特汽车公司为例，亨利·福特先生是福特业务的主导力量。他说：“我的雄心壮志是雇佣更多的男性，将这个工业体系的好处推广到尽可能多的人，帮助他们建立自己的生命和家园。为此，我们将利润的最大份额重新投入业务。”他认为，使公众受益比追求利润更重要。显然，他更愿意为道德和社会做贡献。

B. How to balance the development of the corporation and its responsibility to society is more effective? 

Corporations of different sizes and at different stages of development may have different choices about the balance between their social responsibility and the interests of the company, but they are all for the long-run survival of the company. Is it more effective to do the correct thing or to do the good thing? There are different measurement and evaluation criteria.

不同规模的公司和处在不同发展阶段的公司对企业社会责任与公司利益平衡会作出不同选择。做正确的事还是更有益的事？有不同的衡量和评估标准。

1. Pursuing the profit

Some companies do some grandstanding in order to raise their reputation, but the ultimate goal is to make a profit. For some start-ups, profits can help the company survive and continue to grow. Undoubtedly, profit is the simplest measure of a company's success. Profit distribution mechanism will be directly related to the corporate social responsibility. Should profits be distributed within the company or should short-term profits be sacrificed for the greater benefit of society? It depends to some extent on the management and corporation’s positioning.

绝大多数企业的最终目标都是为了盈利，即便偶尔做一些“哗众取宠”的事情。对于初创企业，利润可以帮助公司生存并持续增长，对于衡量企业是否成功，盈利能力的确是一个较为简单的评价标准。因此，利润分配机制影响企业社会责任的选择和大小，这取决于公司的管理层和战略定位。

2. Pursuing the reputation

Some companies blindly pursue corporate social responsibility for the benefit of the public, and eventually get into trouble and go out of business after a short time. Enterprises provide employment and develop production itself is a kind of contribution to society. Giving to charity or giving money to people in need is also an option for some successful entrepreneurs. Pursuing reputation is a shortcut to corporate success, but only promoting social responsibility is a long-term solution. In a word, balancing and bottom line are the key points. 

还有一些企业为了公众利益盲目追求企业社会责任，最终陷入困境，在短时间内退出经营。企业提供就业、发展生产本身就是对社会的贡献。向慈善机构捐赠或向需要帮助的人捐款也是一些成功企业家的选择。平衡和底线才是关键。

3. Pursuing both the fame and fortune

relationship between legal, moral responsibility and accountability.  

法律、道德与问责之间的关系

An accountability mechanism may be one of the best solutions to balance corporate social responsibility between the legal level and moral level. CSR is a corporate strategy tool that does not require corporations to undertake mandatory obligations.[6] Undoubtedly, nothing can be accomplished without rules. Therefore, the company should write the accountability system into its articles of association to realize the combination of mandatory and voluntary，and transform the legal obligation into the responsibility of the company. Some companies have done well, growing their companies, contributing to society, and gaining a reputation. 

For example, Iron Mountain® Incorporated (NYSE: IRM), the global leader in storage and information management services, announced two important environmental commitments that significantly advance the company’s efforts to reduce its carbon footprint and increase its usage of renewable energy around the world.[9] While protecting the environment, it also expands the company’s fame and fortune.

问责机制或许是在法律层面和道德层面平衡企业社会责任的解决办法之一。CSR 是一种公司战略工具，不要求公司承担强制性义务。因此，公司应将问责制写入章程，实现强制性与自愿性的结合，将法律义务转化为公司责任。例如，铁山®公司是存储和信息管理服务领域的全球领导者，它宣布了两项重要的环境承诺，大大推进了公司减少碳足迹和增加全球可再生能源使用量的努力。在保护环境的同时，也扩大了公司的名声和财富。

Conclusion

According to the analysis, it is hard to say which model is the best, or which single model can solve all the problems. The important steps is to survive, balance the interests,  then grow. The question of which model is more effective depends not only on the corporation itself, but also on its vision, mission and values.

很难说哪个模型是最好的，也没有哪个模型可以解决所有问题。生存，平衡，壮大，是企业的必经之路。哪种模型更有效，取决于公司本身以及公司愿景。

References

[1] David Millon, (2011). Two Models of Corporate Social Responsibility. The Sustainable Corporation, 46 (3). Pp 523

[2] Einer, Elhauge, (2005). Sacrificing Corporate Profits in the Public Interest, 80(3). Pp 733-869

[3] Nekhoda, E. V., (2018). National Models of Corporate Social Responsibility. Business Strategies. Issue 3. Pp18-21

[4] Vogel, David J., (2005). Is There a Market for Virtue? The business Case for Corporate Social Responsibility. California Management Review, Vol. 47, Issue 4.

[5] Leonard Silk and David Vogel, (1977) Ethics and Profits: The Crisis of Confidence in American Business. New York: Simon and Schuster, 6(5). Pp592-593

[6] Mallika Tamvada, (2020). Corporate social responsibility and accountability: a new theoretical foundation for regulating CSR. International Journal of Corporate Social Responsibility, 12(5). Pp 1-14

[7] Gyamfi Bright Akwasi; Bein, Murad A; Bekun, Festus Victor, (1997) Environmental Science and Pollution Research International. Heidelberg: Springer Nature B.V.

[8] Pava, Moses L. (2020) Humanistic Management and Religion: A Case for the Constructivist Approach to Jewish Business Ethics. Humanistic Management Journal.

[9] Iron Mountain Incorporated, (2018). Iron Mountain Joins RE100 and Commits to Setting Science Based Targets for Carbon Reductions. Global Warming Focus. Atlanta [Atlanta]18 June 2018. p 102