This morning's WSJ features an academic exercise in corporate calculus by Dr. Aneel Karnani of the U. Michigan's Ross Business School that tries to make the case against corporate social responsibility. Put simply, Dr. Karnani's argument is that corporations are driven by a profit motive.  As such, any action by corporate executives that does not seek to maximize profit is ill-advised and doomed to failure. As an example, he cites McDonald's addition of ostensibly healthy menu items as driven solely by a need to expand market share, not in response to corporate concerns over the ever-expanding American waistline. Additionally, he notes Detroit's recent infatuation with hybrids and plug-in vehicles is a reaction to cratering sales of less fuel-efficient vehicles and not a sudden infatuation with daisies and dolphins. Blistering insight there, eh? Actually, the most stunning element of the column is Karnani's assertion that the best way to balance social responsibility with profit, is through governmental regulation -- stunning not for the originality of the statement but because it actually was allowed to appear in a Murdoch media outlet. Part of the problem here is that Dr. Karnani focuses strictly on what for years has been known as "doing well by doing good." To my mind this is a too narrow and old-fashioned definition of CSR. Karnani's calculation is just that -- highly limited academic equation grinding that assigns no value to CSR efforts that many corporations deploy which have nothing to do with products and pricing. Dr. Karnani's view reads like the accounting department's take on CSR.  It is not (and should not be) the CEO's point of view on the multitude of benefits of CSR to his or her organization.  Let's ignore for now all of the brand enhancement, reputation management, and relationship strengthening that accrues to a company that deploys a sincere CSR campaign. We'll also ignore how actually giving a hoot  about something more than profit margin can help avoid little distractions like, say massive oil spills, financial malfeasance on an international level, or selling millions of diseased eggs.  Instead, let's just focus on this simple declarative:  I firmly believe that leaders must actually lead  -- and that starts with an understanding that leadership means more than market share or sales volume.

 Any successful company is, by default, a leader in its community, region, industry or ecosystem.  There exists both the opportunity and obligation for these leaders to serve as a catalyst for the betterment of the communities that have helped them to success in the first place. That can take any number of forms, from mentoring and training future leaders and entrepreneurs to encouraging employees to devote work time to charitable efforts to using communications capabilities as a bully pulpit for selected causes or ideas.  Less dramatically, execs and managers can stress to employees the importance of looking beyond their cubicles to see that what their company does has a direct impact on a community every day, and the impact should be as positive as possible.  

Certainly, all companies have a fiduciary responsibility to a variety of stakeholders and no company will be able to conduct much of a CSR effort if it sacrifices its profit motive foolishly.  But CSR also doesn't need to be the zero-sum mathematical exercise Dr. Karnani portrays it to be.  And then there's that whole governmental regulation thing...nah, that's for another day.