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Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited
Article Type: Guest editorial From: International Journal of Bank Marketing, Volume 30, Issue 6
In the 70 years since Steinbeck castigated the banks for their treatment of dustbowl farmers, and the 50 since Eisenhower warned us of the growing power of the military industrial complex, things have got steadily worse. Corporations have grown ever bigger, transcending national boundaries and dwarfing regulatory institutions. In one sense this is unsurprising: as many commentators, from Joel Bakan in 2004 to Naomi Klein in 2007, have noted, a ruthless regard for the shareholder, corporate wealth and the bottom line is written into corporate DNA, and this in turn makes continuous growth a necessity (Gerard Hastings, 2012).
Continued and dedicated coverage is required if the social responsibility and sustainability ideologies are to gain traction in the commercial sector. Some definitions of corporate social responsibility (e.g. Carroll, 1991, 1999) consider Friedman’s (1962) economic requirement a foundation, suggesting that legal, ethical, and philanthropic considerations be held in secondary importance to the primary wealth-producing purpose of business. Such views encourage firms to seek revenue growth at all costs, which can only occur through reducing costs, increasing prices or acquiring new economies of scale within the corporation through mergers and acquisitions. As noted by Hastings (2012) this has led to corporations exceeding the size of some countries across the globe. A situation that vests more power into corporations than the states that govern a collective of individuals is frightening and in the long term it is a recipe for disaster – as the 2008 Global Financial Crisis first suggested.
The 2008 US credit crunch provides a clear illustration. With millions of US families facing loan foreclosures and the threat of a collapse of the financial sector, the US government resumed control of the two largest lenders in the USA (Freddie Mac and Fannie Mae). Business practices involving extending unsustainable levels of credit created chaos with significant societal and economic implications for the USA and other countries across the globe. The US government and hence the US taxpaying public bore the cost of poor decisions by large corporations desperate to achieve continued economic growth.
While alarm bells rang in 2008, during, and in the period immediately following the Global Financial Crisis, the commercial sector was happy to resume business as usual leading the majority to believe that things were going to be ok. Fast forward to 2012 and once again the global financial industry is treading on thin ice with countries fast headed toward bankruptcy and coalitions of governments convening meetings in an attempt to stay in the black. If Governments are not solvent who will bail out companies following their judgement errors?
Today’s managers continue to face volatile economic forces, differences in organizational and cultural values, cultural diversity among employees and customers, rapidly changing technology, environmental damage, and finite resources. Through research we can inform our current and future leaders of the global predicament that we are in. This special issue of the International Journal of Bank Marketing sought to bring together research that is theoretically innovative and well grounded to provide deeper insights into how the sector has and will continue to evolve.
In an era of continued financial instability caused by a flawed business model, we need to continue to challenge definitions of corporate social responsibility that have economic imperatives at their core. The time has come to develop alternate models of business, and for researchers to challenge the purpose of corporations. More liberal stances exist suggesting the true purpose of corporations should be to make societies better off (Cohan, 2002), not worse! The research featured in this special issue provides an important step towards taking up this challenge. I hope you enjoy this special issue.
Sharyn Rundle-ThieleGuest Editor
Carroll, A.B. (1991), “The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders”, Business Horizons, Vol. 34, pp. 39–49
Carroll, A.B. (1999), “Corporate social responsibility: evolution of a definitional construct”, Business and Society, Vol. 38, pp. 268–95
Cohan, J. (2002), “‘I didn’t know’ and ‘I was only doing my job’: has corporate governance careered out of control? A case study of Enron’s information myopia”, Journal of Business Ethics, Vol. 40, pp. 275–99
Friedman, M. (1962), Capitalism and Freedom, University of Chicago Press, Chicago, IL
Hastings, G. (2012), “The marketing matrix”, Journal of Social Marketing, Vol. 2 No. 3 (forthcoming)