The follow up to Part 1 of ESSEC Prof. Bernard Leca’s article on a new form of capitalism (2.0), drawn from his research with co-authors Kazmi (Aston Business School) and Naccache (INSEEC Business School): “Is Corporate Social Responsibility a New Spirit of Capitalism?”

Capitalism 2.0: From the bottom up (2/2) by Bernard Leca.

Does a CSR spirit of capitalism guarantee security?

Boltanski and Chiapello argue that to gain support for a new spirit of capitalism, its promoters must convince people that engaging with the proposed version of capitalism will bring them some security. Security is a central part of the argument developed by CSR promoters. However, the approach to security developed here is different from that in previous spirits of capitalism:

• as a solution to the threat from the current version of capitalism to the long-term security of society as a whole;
• as a guarantor of security for future generations;
• and as a way to ensure the long-term security of corporations, as it should strengthen ties between corporations and the wider society.

The books also enumerate several other benefits from CSR that are likely to increase companies’ economic success and chances of survival, including the development of new markets, innovation and repositioning, reduction in risk and increased capacity to attract bright people willing to work for CSR-driven corporations. What’s noticeable, however, is that while the long-term security of society and corporations is discussed and argued about at length, limited attention is paid to improving the security of wage-earners, for example, by promising lifelong careers.

Capitalism 2.0: Does it guarantee fairness?

One last but very important dimension of the spirit of capitalism, according to Boltanski and Chiapello, is to give people a sense that, by supporting and working within capitalism, they will be rewarded in a fair way. For example, in the current spirit of capitalism—evident in project-based organizations—fairness is embedded in the evaluation of wage-earners, based on their adaptability, mobility and capacity to fulfil projects. Our analysis of managerial texts suggests a distinction emerging among wage-earners, that is, between managers and workers.

While the authors address the issue of fairness for managers, for whom they recommend rewards, they give little attention to the workers. The texts we analysed are targeted at managers rather than workers. They insist on the importance of top leadership and regard managers, in particular, senior managers and CEOs, as the main driving force in CSR policies. Some authors recommend direct financial rewards for managers’ engagement in CSR.

In sharp contrast, when considering rewards for workers, the texts tend to perceive the rewards as more symbolic and less financial. CSR is presented as a way of giving staff an opportunity to express their idealism, to be seen as smart and concerned citizens, to create for themselves a ‘positive working environment, and even improve their employability. Yet, it’s argued that for workers, “motivation is based on values rather than purely on financial reward’. Ironically, while remuneration is viewed as too narrow a motivation for workers, it is considered a valuable motivation for managers. 

In other words, many see the implementation of CSR as a major change requiring a top-down process, where leadership from managers is essential. Within this perspective, the lack of tangible rewards for workers may be just an omission, as the texts concentrate on those issues that the authors view as more important.

It might become problematic when trying to convince the protagonists of capitalism and to ensure implementation, especially since it creates a divide between managers and workers in the incentives to implement CSR.

Capitalism 2.0 needs a bottom-up approach

Our analysis suggests that CSR does exhibit the core characteristics of a spirit of capitalism: it introduces changes in practice, makes recommendations regarding how those changes should be introduced, and spells out the benefits that corporations, managers and employees may obtain. CSR theorists and gurus don’t promote the maintenance of “business as usual”, but call for reforms and aim to influence the current management of corporations, arguing that a new form of capitalism might be part of the solution, much as the current one is part of the problem.

However, two characteristics of this new spirit of capitalism remain underdeveloped: there appears to not be enough attention paid to the security of the individuals within the company, and in regards to compensation, some individuals are treated more fairly than others. In other words, until now this new spirit of capitalism has been ushered in through a primarily top-down approach.

Most critically, this has led to a rather unusual view of fairness, where managers who lead, develop and enact CSR can expect financial rewards, while workers receive only the symbolic satisfaction of working in a company engaged in CSR. This could potentially lead workers to consider CSR as a way to increase managers’ financial gains but not their own. In short, the current incarnation of a CSR-based spirit of capitalism may succeed in producing collective value for corporations and society, but it does not include employees in creating or benefiting from it.

A new spirit of capitalism is still developing. However, if long-term change is to be produced, workers need to be placed at the centre of this critical CSR project. By taking a bottom-up approach, this new system could more easily be brought to fruition.

Return to Part 1 of this article.

Useful links:

• Download the full research article Is Corporate Social Responsibility a New Form of Capitalism?
• Read a related article: Unlearning CSR: Is conventionally understood CSR a dead-end?
• Download the Council white paper “Corporate Governance and Leadership“
• Visit the Council on Business & Society website to know more about the alliance and its work.

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