Americas Business Review - May-June/2020

CSR: Microsoft Case

Prof. Aldo Brunhara
Doctor in International Management at ESPM

Investors and CSR: Friends of Foes? Neither of them. The question

is who decides how much green shareholders want.

M
icrosoft has been rated the most
environmentally friendly company
by the noprofit Just Capital. It
reached carbon neutrality, reduced its
products packaging by 20% and donated
billions in software services to communities
and NGOs in 2018. For example, the
company uses its AI to address global
warming in India, a country heavily
affected by rising sea levels and changing
temperatures, providing software tools
to help produce higher crop harvest. But
why should the company spend so much
money to focus on Indian farmers instead
of generating returns to its shareholders?
Does Micrsosoft really know what its
stakeholders want?
The clash of ideas regarding CSR can
be summarized in two words that
relate to each other: shareholders vs.
stakeholders. The latter category, of
course, includes shareholders, as well
as employees, communities, clients and
environmentalists. Given this context of
polarization, managers and students must
rule out accusations that discredit the
opponent, such as “leftists” or “vegans”
aimed at the supporters of CSR, or
“troglodytes”, against traditionalists. In the
end, there is no shortage of arguments by
respected analysts to defend one position
or another. One of these analysts is the
magazine The Economist. In the editorial
“Big business, shareholders and society –
What companies are for” from August 22nd
2019, the journal aligns with the supporters
of the traditional view of companies,
urging: “However well-meaning, this new
form of collective capitalism [companies
that emphasize CSR policies] will end up
doing more harm than good. (...) It is a
threat to long-term prosperity, which is the
basic condition for capitalism to succeed.”

Americas Business Review - Sao Paulo - May-June 2020, pp.31-39. www.ibs-americas.com

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 Americas Business Review - May-June/2020

The text points out two flaws in the history
of collective capitalism: one regarding
dynamism and the other one related
to a clear definition of responsibilities
(accountability). The editorial supports the
idea that collective capitalism “leans away
from changes” that, in a dynamic system,
need to happen. It is always necessary,
for instance, reallocating capitals and
workers from obsolete industries to newer
and more efficient ones. Regarding the
weaknesses of accountability, it is not clear
how “society” will express what it wants
from those companies. Ordinary people
are very likely to remain without a voice. In
summary, the text defends broadening the
number of share owners. In most cases,
they will favor maximizing value in the long
term, and these should make companies
be more accountable. For the magazine,
that is the kind of capitalism that is really
explained.
a yearly ranking of the 1,000 largest
American corporations based on how they
create value in the long term through good
relationships with employees, clients and
society as a whole. From the perspective
of organization, a “fair” company is the one
that does the right thing regarding those
three interested parties.
In the 2020 ranking, high-tech companies
confirmed their hegemony, taking eight
out of the first ten positions. Microsoft,
the “fairest” company in 2019, kept the
first place. PayPal, company for digital
payments, went from the 45th to the
8th position, whereas Anthem, a health
insurance provider and one of the “non
high-tech” companies in the “top 10”, with
Procter & Gamble, dedicated to sales to
end consumers, went from the 52nd to the
7th position.

Billionaire investor Paul Tudor Jones would

probably disagree with some aspects (not
with all!) of this editorial. In 2013, he was one
of the founders of a non-profit organization
called Just Capital, whose goal is measuring
what Americans want from corporations
and which companies are contributing
to build a “fairer” society. The article “A
major nonprofit ranked U.S. companies
for doing the best for their communities,
workers, and the environment” (Feloni,
Richard. Business Insider, November 15th,
2019) informs that Just Capital publishes

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 Americas Business Review - May-June/2020

2020 Overall Rankings, Just Capital, 2019

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 Americas Business Review - May-June/2020

The text presents the initiatives of the
“top ten” companies regarding topics
like community, employees, environment,
shareholders (in the case of Anthem)
and clients (in the case of PayPal). The
latter has an excellent customer privacy
policy, whereas Anthem mentions four
women among the nine members of the
Administration Council. Thus, the initiatives
of Microsoft, two-time champion among
the “fairest” companies, indicate some of
the new directions for CSR companies:
• Communities: last year, Microsoft donated
US$1,4 billion in software and services to
non-profit organizations.
• Employees: besides guaranteeing 20-
week maternity leave and 12-week paternity
leave, the company demands since last
year that all its providers guarantee 12-
week paid leave to all employees.
• Environment: in 2012, Microsoft achieved
carbon-neutrality, and last year it reduced
by 20% the packaging of its products.

Apparently, the support to CSR companies

very slightly affected the high-tech giant’s
net income. See the graph below.

Microsoft’s Net Income - 2002 to 2019 (In U.S.D. billions)

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 Americas Business Review - May-June/2020

In relation to the differentiation of products, sensitive to their predominant religious,

some consumers prefer greener options: for
example, a hybrid car over a standard model
that may be cheaper, but more pollutant.
Is it possible to calculate how many
consumers emphasize “environmental
sensitivity” and how many of them look
for the lowest price? The promotion of
CSR initiatives by multinationals divide
the public: some people accept it as
part of what the company effectively is,
whereas others perceive this promotion
as mere advertising. This is related to a
fundamental issue: a company that invests
in CSR initiatives conquers a sustainable
competitive advantage in comparison
to competitors; or is this advantage only
provisional, because competitor will
then follow the steps – and, in any case,
many people will see these efforts as
mere advertising? These are topics that
managers must consider when drawing
the company’s investment strategy.
Consideration should be also given to the
eventual mismatch between a company’s
main activity and its CSR initiatives. For
instance, the oil company Royal Dutch
Shell is recognized for developing relevant
CSR activities. To what extent are these
initiatives just a smoke screen to make the
public forget they basically work with oil
and byproducts, all highly pollutant?
historical and cultural contexts.” Visser
claims that developing countries present
a distinctive ensemble of challenges in
the CSR agenda that are, collectively, very
different from those faced by developed
countries.
To recognize these challenges, he looks
into CSR in Asia, Africa and Latin America,
and also into the aspects that boost it
in those large regions, such as cultural
traditions, political changes and socio-
economic priorities.
Under this prism, managers and students
need to combine Visser’s analysis with
well-known aspects of the socio-economic
and political reality of the three regions.
The author points out, for example, that
“CSR debates in Africa have historically
been framed in terms of the ethics
of colonialism and apartheid and the
prevalence of corruption and fraud on the
continent.” Young managers must reinforce
this analysis through ethical values
incorporated by them, like the fight for
human rights, threatened by the frequent
civil wars in the African continent.

Many of those remarks, generally referring

to developed countries, Wayne Visser
extends to the rest of the world. In a
2009 article Visser, W. Corporate Social
Responsibility in Developing Countries.
The Oxford Handbook of Corporate Social
Responsibility, Jan. 2009, the author
explains that he uses the expression “CSR
in developing countries” to represent
“the formal and informal ways how
companies contribute for the perfecting
of environmental, work, ethical, social and
government conditions of the developing
countries where they act, while being

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 Americas Business Review - May-June/2020

Asia, in turn, is described as a region where combine those aspects to the CSR initiatives
CSR advances at a rapid rate. For instance, that are taking place in Brazil, Mexico and
almost 75% of large Indian companies Argentina, and that, according to some
have stated developing CSR policies. But analysts, could create some hope for positive
would that be enough to improve the Indian changes.
(and Asian) reality, characterized by child
labor, very low salaries and inhuman work
conditions – in many cases for multinationals
from developed countries?

For Latin America, the CSR agenda would be

“heavily influenced by the socio-economic
and political conditions, that worsened
many environmental and social issues like
deforestation, unemployment, inequality
and crime.” Managers and students must

Drivers of CSR in Developing Countries, Visser, W., 2009.

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CSR Pyramid for Developing Countries, Visser, W., 2009.
By the end of the article, Visser lists
10 distinctive characteristics of CSR in
developing countries. We highlight three of
them:
• In developing countries, formal CSR
is practiced in most cases by large
multinational or domestic high-profile
companies, especially by those that have an
international brand.
• Making a financial contribution is frequently
seen as the most important and effective
way a company can have a social impact,
for example, through investment, creation
of employment, payment of taxes and
transference of technologies.
• Countless CSR issues in developing
countries are presented as dilemmas or
stressful choices: development versus
environment, creation of employment
versus higher work standards, strategic
philanthropy versus political governance.
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Americas Business Review - May-June/2020
To conclude, we can understand why
managers all over the world study the impact
of CSR in companies or countries. The social
dimension of a company will never be its
main purpose – that is the pursuit of profit –
but it is here to stay.
The dilemma for managers and students is
the following: working in a company that
seeks maximum profit for its shareholders
or in a company that, besides that,
acknowledges its obligations towards the
community, the environment, employees
and customers? The Economist reaffirms
the attractive aspects of the CSR alternative:
“Young people want to work for companies
with a clear stance on today’s moral and
political issues.”
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 Americas Business Review - May-June/2020

The choices of young and future managers It is important to remember that CSR
will show the values they received during their companies, such as Microsoft, are not the
education and training. Schools with a more only ones where managers will find a healthy
ethical view support an ensemble of values work environment. As The Economist states,
expressed in the curriculum and in how the if share ownership is broadened, “most
relationship with the university community owners and firms will opt to maximize long-
and with other stakeholders is managed. term value, as that is good business.”
Defense of the Rule of Law, Democracy, basic
Human Rights, Freedom of Expression and of And what about young managers who get
Thought are issues that students incorporate job offers from companies that seek, through
into their vision of the world. Such schools any means, maximum profit in a very short-
try educating managers who are aware of term? Well, there are plenty more fish in the
the impact managerial decisions can have corporate sea!
on society and the environment. For this
purpose, a university environment adapted
for collaboration and exchange of ideas is
created, where ethnic, cultural, gender and
sexual orientation diversity is respected and
valued. Diversity enrichens debate, bringing
different perspectives for the members of the
community.

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REFERENCES
Americas Business Review - May-June/2020

Big business, shareholders and society: What companies are for (August, 2019). The Economist.
Retrieved from: https://www.economist.com/leaders/2019/08/22/what-companies-are-for

Devices Sustainability at Microsoft. (2019). Microsoft.

Retrieved from: https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4d74y

Feloni, R. A major nonprofit ranked U.S. companies for doing the best for their communities, workers, and the environment, and Salesforce and PayPal
made huge jumps from last year. (November, 2019). Business Insider.
Retrieved from: https://www.businessinsider.com/just-capitals-best-companies-ranking-2019-1

Microsoft’s commitment to sustainability (n.d.). [Microsoft CSR policies].

Retrieved from: https://www.microsoft.com/en-us/corporate-responsibility/sustainability

Statista. (n.d). [Microsoft’s Net Income - 2002 to 2019].

Visser, W. (January, 2009). Corporate Social Responsibility in Developing Countries. The Oxford Handbook of Corporate Social Responsibility.
Retrieved from: https://www.researchgate.net/publication/318094922_Corporate_Social_Responsibility_in_Developing_Countries

2020 Overall Rankings (2019). Just Capital.

Retrieved from: https://justcapital.com/rankings/

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