Compassionate Capitalism: How Corporations Can Make Doing Good an Integral Part of Doing Well

Citation

Kavan, H. (2005), "Compassionate Capitalism: How Corporations Can Make Doing Good an Integral Part of Doing Well", Women in Management Review, Vol. 20 No. 3, pp. 208-210. https://doi.org/10.1108/09649420510591889

Mention the word Capitalism, and compassionate is not usually the first adjective that springs to mind. Can a philosophy that equates self‐worth with material prosperity, thereby encouraging greed and envy (and some would say bad taste) be really compassionate? Yes – according to Marc Benioff and Karen Southwick whose book Compassionate Capitalism has received laudatory reviews in business magazines and on Amazon.com.

Compassionate Capitalism (not to be confused with George Bush's compassionate conservatism) is a call to the managers to give back to the communities they profit from, both locally and abroad. Chief author Benioff is the CEO and Chairperson of Salesforce.com, and writes from his own experience with Salesforce's philanthropic philosophy, while his co‐author Southwick, (recently deceased), is an award winning journalist. We are told on the back cover that Benioff's ideas could bring “a much needed tidal wave” of positive pressure on corporate America.

To be sure, the book is timely. Corporate social responsibility (CSR) has been one of the biggest corporate trends since the 1990s, and almost a third of MBAs in Europe now offer CSR modules (ICCSR & EABIS, 2003). Noting the way that corporations have exploited developing countries, the United Nations has also endorsed CSR. This endorsement has been of particular interest to women's groups as 70 percent of the 1.3 billion people worldwide who live in extreme poverty are women and girls (Obando, 2004, p. 4).

The book begins with a citation from Martin Luther King Jr: “Everyone is great because everyone can serve.” The authors urge companies to stop free loading off societies, and argue that by closely aligning business and community goals, managers help their businesses and their employees as well. Businesses, they say, gain from increased innovation, they are more likely to attract and retain good employees, and there are obvious public relations benefits. Employees also gain: they learn new skills and get the chance to do deeply meaningful work, sometimes travelling to distant countries. According to the authors, “Employees seeking greater levels of fulfillment in their own lives will have to look no further than their workplace” (p. 97).

As well as arguing for the benefits of altruism, Benioff and Southwick provide a practical guide for managers to implement philanthropy, using case studies from companies like Cisco, Microsoft, and Timberland. The authors stress that philanthropy must be a building block of the organisation's culture. There is no point, they say, in waiting until the company has more money; managers can start small by, for example, giving half their employees four hours a month of paid time to do community work.

Later chapters address the vital issues of globalisation and how to tailor philanthropy to harmonise with the cultural, business and social structures of other countries. The authors also give advice for tackling big projects (such as deep‐rooted social problems), going into partnerships with non‐profits, maintaining philanthropy during hard times, and measuring results. Chapter 14 is a valuable chapter on non‐profits and corporations' perceptions of each other, and the need for mutual respect. The book closes with recommendations and a “call to alms”.

Several of the case studies will be of special interest to women, and could be starting points for Oppedisano's (2004) call for more research on women's philanthropic entrepreneurship. These include: Ebay's Irene Wong who helped Guatemalan village women sell their handicrafts on Ebay, Theresa Fay‐Bustillos of Levi Strauss who empowers migrant women in China holding their first job away from home, and Carrie Schwab Pomerantz of the Charles Schwab Corporate Foundation who helped start the San Francisco international museum for women.

However, I wonder whether many women will relate to the book's implicit calls to be less selfish; in my experience, women's faults are more likely to involve lack of service to themselves than lack of service to others. Also, given that corporate structures tend to exacerbate gender inequities, we might question whether corporations are the best resource for helping the increasingly disproportionate number of female poor, especially as researchers have linked female poverty to traditional paternalist practices (Barrientos et al., 2000).

While the book's passionate images of people who – for example, give spectacles to Bangladeshis who cannot afford them – lead me to feel uncomfortable playing the role of armchair critic, it is difficult to ignore the authors' lack of critical reflection. This is not just a minor flaw. The vast majority of the book is made up of unverified information supplied by businesses, and more than once I experienced feelings of mistrust.

The case study of Coca Cola is a good illustration. At the same time that the authors incorporated Coca Cola's narrative about its leadership in environmental ethics, Coca Cola was being ordered by the Kerala High Court to stop depleting desperately needed water supplies in an Indian village (Krishnakumar, 2004). Another example is the book's sparkling account of Starbucks' conservation work. We are told that Starbucks has teamed up with Conservation International to preserve rainforests in Chiapas and that they are “bending over backwards” to educate coffee growers about their environmental standards. The book does not mention that these standards only apply to just over one percent of the coffee Starbucks uses, and the vast majority of their coffee is grown by clearing rainforests and depleting habitats for birds, animals and plants (Box, 2003).

Equally important, the authors mention only indirectly – as if this is a mere detail – the fact that the money that corporation managers give away ($12.2 billion in the USA in 2002) is not actually their money, but belongs to the firm's shareholders. Managers need to convince shareholders that philanthropy is profitable, otherwise they can be fired for not acting in shareholders' interests. However, the assumption that socially responsible behaviour leads to profits is debatable, and even if philanthropy is financially beneficial, managers do not know how long profits will take to emerge and whether they will be consistent over time (McGuire et al., 1988; Tsoutsoura, 2004).

There are other features that also suggest that Compassionate Capitalism would have benefited from more thought. Information is repeated, a quotation attributed to Confucius is actually from Lao Tzu, and the referencing is sparse and inconsistent. Also, the book has the same title as Richard DeVos' best‐selling book on the same subject published eleven years earlier, and it seems unlikely that the authors were unaware of his publication.

Ultimately, I think that Compassionate Capitalism is evocative, even if it's vision exceeds, simplifies, and occasionally even obscures reality. In some sections there are compelling examples of people passionately embracing causes, and these make the book worth reading. In short, Compassionate Capitalism is the business equivalent of a self‐help book – a book to be secretly inspired by, but not to stake one's credibility on, or leave on the coffee table when friends or associates who are committed environmentalists or social policy analysts come calling.