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  • Mark R. Kramer

Coronavirus Is Putting Corporate Social Responsibility to the Test


For millions of Americans, the new relief law will be too little too late. It is expected to take three weeks for cash payments to reach laid-off employees and small businesses. Businesses may defer payments and cut costs, but employees who have lost their income without warning cannot wait three weeks to feed themselves and their families. For much of America, this is a crisis that requires immediate action that only companies can take.

The way large companies respond to this crisis is a defining moment that will be remembered for decades. Thirty-eight years ago, seven people in Chicago died from taking poisoned Tylenol pills. It was a rare and localized event, but Johnson & Johnson immediately pulled all Tylenol from all stores everywhere, taking a huge loss to avoid even a single additional death. People still talk about that decision. People who weren’t even born at the time are still studying that case in business schools.

A great many large companies talk about having a social purpose and set of values, or about how much they care for their employees and other stakeholders. Now is the time for them to make good on that commitment. Research suggests that people only truly believe that their company has a purpose and clear values when they see management making a decision that sacrifices short-term profitability for the sake of adhering to those values.

When the U.S. drugstore chain CVS chose to go more deeply into health care, it decided that it could no longer sell tobacco products, giving up $2 billion in revenue. When my social-impact-consulting firm, FSG, encountered the 2008 recession, we made a decision not to lay off people, but instead to reduce salaries on a sliding scale so that those who made the most took the deepest cuts and those who made the least took a very minor reduction. More than a decade later, people still talk about that decision — and we have decided to repeat it now.

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