UNIVERSITY OF RIZAL

SYSTEM Province of Rizal

Social Responsibility and Executive Management

Morente, Sharmaine B. MBA1

Corporate Social Responsibility: Microsoft Case Study

Microsoft has been rated the most environmentally friendly company by the
non-profit Just Capital (2019). 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 (Microsoft’s
commitment, n.d.). But why should the company spend so much money to focus on
Indian farmers instead of generating returns to its shareholders? Does Microsoft
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.”
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 (2019) 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.
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 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 (Just
Capital, 2019).

commitments
They believe that companies that can do more, should. That’s why they focus
on four key areas in which technology can and must benefit the future of humanity
and our planet.

Support inclusive economic opportunity

They must ensure that economic opportunity is inclusive—for every country,
developed and developing; every community, urban and rural; every business, small
and large; and every person, including the 1 billion plus people with disabilities.

Protect fundamental rights

They unequivocally support the fundamental rights of people, from defending
democracy to addressing systemic racial injustice and inequity, to protecting human
rights.

Create a sustainable future

They address climate change for a more sustainable future. That’s why we’ve
set ambitious commitments and have detailed plans to achieve them while enabling
others to use technology to create and achieve their own goals.

Earn trust
Every day, they strive to earn the trust of our customers, employees, the
communities they serve, and the governments that represent them through a
commitment to privacy, security, the responsible use of AI, and transparency.

Their progress
As they work to help everyone achieve more, we are committed to sharing our
learnings and reporting our progress.

42 million people accessed free digital skills training for in-demand jobs in the
first year of our global skills initiative

More than $410 million in cash, technology, and resources committed to

support COVID-19 response efforts as of June 2021

2.5 million metric tons of carbon removal contracted for in fiscal years 2021
and 2022 combined
 9 billion threats to devices, 31 billion identity threats, and 32 billion email
threats were blocked by Microsoft security experts

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 (Devices Sustainability, 2019).

In relation to the differentiation of products, 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?
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 sensitive to their
predominant religious, 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.
Asia, in turn, is described as a region where CSR advances at a rapid rate. For
instance, almost 75% of large Indian companies have stated developing CSR policies.
But would that be enough to improve the Indian (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.” (Visser, 2009).
Managers and students must combine those aspects to the CSR initiatives that are
taking place in Brazil, Mexico and Argentina, and that, according to some analysts,
could create some hope for positive changes.

The Theories of CSR in Microsoft:

 By the end of the article, Visser lists 10 distinctive characteristics of CSR in
developing countries. They 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.
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 (2019) 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.”
The choices of young and future managers will show the values they received
during their education and training. Schools with a more ethical view support an
ensemble of values expressed in the curriculum and in how the relationship with the
university community and with other stakeholders is managed. Defense of the Rule
of Law, Democracy, basic Human Rights, Freedom of Expression and of Thought are
issues that students incorporate into their vision of the world. Such schools try
educating managers who are aware of the impact managerial decisions can have 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.
It is important to remember that CSR companies, such as Microsoft, are not
the only ones where managers will find a healthy work environment. As The
Economist states (2019), if share ownership is broadened, “most owners and firms
will opt to maximize long-term value, as that is good business.”
And what about young managers who get job offers from companies that seek,
through any means, maximum profit in a very short-term? Well, there are plenty more
fish in the corporate sea!
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References:
1. 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
2. Devices Sustainability at Microsoft. (2019). Microsoft. Retrieved
from: https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4d74y
3. 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
4. Microsoft’s commitment to sustainability (n.d.). [Microsoft CSR policies].
Retrieved from: https://www.microsoft.com/en-us/corporate-
responsibility/sustainability
5. Statista. (n.d). [Microsoft’s Net Income - 2002 to 2019].
6. 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_Soci
al_Responsibility_in_Developing_Countries
7. 2020 Overall Rankings (2019). Just Capital. Retrieved
from: https://justcapital.com/rankings/
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