Business during the times of crisis

Can big businesses help during the times of political crisis? Examples show they can.

photo: Freepik

Narayan Manandhar

  • Read Time 3 min.

In January, 2005, The Economist reported that Corporate Social Responsibility (CSR) is nothing more than women’s make-up. It is applied every morning and is washed off before going to bed. The implied meaning here is that CSR is attractive, ritual, temporary and artificial.

“The business of business is to do business, nothing more nothing less”, this is what Nobel Laureate, Prof Milton Friedman, the famous economist from Chicago University claimed about (social) responsibilities of business in the early 1970s.

Business is an economic instrument designed to create wealth and it serves best by maximizing wealth creation function. There is no need for business to get involved with extra or added activities like performing social responsibilities.  

However, over the last 50-60 years, the concept of CSR has evolved from corporate philanthropy (donations to charities) to risk management (managing negative impacts of business) to the creation of shared values (business directly addressing poverty, unemployment and other socio-economic and environmental concerns). One modern day argument in favour of CSR is why don’t businesses themselves undertake social responsibilities instead of paying taxes to the government that is corrupt, inefficient and partisan?

But I suppose the real test of CSR hinges on trying times like extreme political and humanitarian crisis situations currently unfolding in Afghanistan. Here are two examples from the past: During the Arab Spring in February 2011, in Egypt, at Tahrir Square in Cairo, when security forces resorted to firing the protesters gathered there, all the coffee shops located around the Square kept open their doors, allowing the protesters to run for security cover from flying bullets. The coffee shop owners saved the lives of thousands of protesters. The act cannot be termed as business philanthropy. Neither this comes under risk management definition. Instead business owners themselves were risking their own lives. The act is being performed from the sense of true altruism. 

Similarly, during the escalation of violence in the spring of 2018 in Ukraine, Kiev, a miner deployed around 9,000 of his mining staff members to give security during night time curfews. This is another extreme example of how business can actively take up non-business roles during crisis situations.

I suppose cases like these can never be explained under the concept of conventional CSR. The CSR textbook will never explain business to be directly associated with political activities. Though we have read news about big businesses often indulge and conspire in toppling governments for the sake of their vested business interests.   

Here are some more recent examples coming from the crisis situation in Afghanistan.    

First Airbnb, Walmart and others are lending their hand to the people of Afghanistan after the collapse of the US-backed government and Taliban takeover. Airbnb has committed to provide temporary housing to 20,000 Afghan refugees worldwide, free of cost, as long as they need. This news has come at a time when questions are raised about the business companies that operated in Afghanistan and which benefited from billions of dollars from the aid money injected into Afghanistan. 

Verizon, the US wireless network, is planning to waive charges for calls from its consumer and business customers to Afghanistan, up to September 6.

The real test of corporate social responsibility (CSR) hinges on trying times of extreme political and humanitarian crisis situations currently unfolding in Afghanistan.  

Similarly, discount retailer Walmart has committed to donate one million dollars to three non-profits supporting Afghan refugees entering the US, as well as to veterans and their families. These organizations are the Lutheran Immigration and Refugee Service, No One Left Behind and the Tragedy Assistance Program for Survivors. The toy maker Lego is also donating 100 million kroner ($16m) to support vulnerable children in Haiti and Afghanistan.

Based in Denmark, the Lego Foundation and parent company KIRKBI A/S had partnered up with, among others, two UN agencies—UNICEF and UNHCR—as well as Education Cannot Wait, a global fund, to transform the delivery of education during the crisis situation.

The last two examples are conventional forms of business philanthropy, directly giving donations for the cause. However, the acts of Airbnb and Verizon are different forms of CSR. The companies are directly using business activities for the cause of Afghan refugees. These examples tell us that, if needed, the business must proactively engage with the crisis situation through their line of business even though the opponents can easily charge them of “political activities” or partisan interest.

Undertaking these activities requires extreme courage on the part of business leaders. Often exigencies demand business to take up political roles. I suppose this is real CSR in action.

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