Thomas M.
Jones
Corporate Social Responsibility
Revisited, Redefmed
There are several reasons for the current con-
cern with corporate social responsibility. In re-
cent years, the level of criticism of the business
system has risen sharply. Not only has the per-
formance of business been called into question,
but so too have the power and privilege associ-
ated with large corporations. Some critics have
even questioned the corporate system's ability to
cope with future problems. 1,2
Regardless of the substance of this criticism, it
has frequently been accompanied by calls for
improved social control of business or, more
briefly, improved corporate governance. The
apparent failure of several existing modes of
social control-antitrust, regulation, and spe-
cific legal prohibitions-has been charted by
several analysts, while other proposed modes
of governance-worker control, public owner-
ship and national economic planning-are
probably too radical for popular consideration.
Thus a proposal which avoids the pitfalls of
previously attempted modes of control yet is
not too radical for the American system has a
certain appeal. Corporate social responsibility
is such a method. It is a form of self-control
which involves elements of normative con-
straint, altruistic incentive and moral impera-
tive in the quest for corporate social nirvana.
SPRING / 1980 / VOL. XXII / NO. 2
Perhaps its greatest virtue is that its adoption
requires no extension of government. This
alone enhances the appeal of corporate social
responsibility immensely.
Before corporate social responsibility is
adopted on a wholesale basis, certain problems
need to be solved. First, the propriety of the
doctrine needs to be firmly established. Sec-
ond, provisions must be made for its imple-
mentation.
This article is premised on the assertion that
the corporate social responsibility question can
be separated into two subsidiary questions, one
dealing with the abstract concept, the other
with applications of the concept. The first of
these asks "Should we adopt the doctrine of
corporate social responsibility?" the second,
"Given that corporate social responsibility is an
appropriate doctrine, how do we implement
it?" Those who would argue that the two ques-
tions cannot be separated are encouraged to
withhold judgement until they have finished
the article.
Corporate Social Responsibility as Concept
Before any concept can be evaluated, it must be
defined. Corporate social responsibility is the
notion that corporations have an obligation to
59
constituent groups in society other than stock-
holders and beyond that prescribed by law or
union contract. Two facets of this definition are
critical. First, the obligation must be voluntarily
adopted; behavior influenced by the coercive
forces oflaw or union contract is not voluntary.
Second, the obligation is a broad one, extend-
ing beyond the traditional duty to shareholders
to other societal groups such as customers, em-
ployees, suppliers, and neighboring commun-
ities. The crux of the conceptual aspect is the
question of whether corporations have an obli-
gation to groups other than shareholders. The
debate over this issue takes many forms and is
thoroughly documented.I For our purposes, it
will suffice to summarize the principal argu-
ments and draw conclusions where appropri-
ate. Table 1 presents the debate in condensed
form.
The arguments for social responsibility appear
to effectively undermine the position against it
and additionally provide some compelling
points which remain unchallenged. This has
led many commentators, from both the corpor-
ate and academic worlds, to affirm the propri-
ety of the doctrine of corporate social responsi-
bility as an abstract concept. Corporate mana-
gers, they feel, do have an obligation to con-
stituent groups other than shareholders.
Corporate Social Responsibility Applied
Those opposed to corporate social responsibil-
ity have one final argument in their intellectual
arsenal, that social responsibility is too vague to
be useful-how can corporate managers de-
cide what behavior is socially responsible? This
criticism of the doctrine, while valid, does not
apply to the concept, but to its application.
Granting that corporate managers do have a
responsibility to constituent groups other than
shareholders:
Thomas M. Jones is an Assistant Professor of Busi-
ness, Government and Society at the University of
Washington in Seattle, Washington. His current
work includes research in corporate governance,
shareholder litigation, and corporate social respon-
sibility. He has published in both law and manage-
ment journals.
60
• what are these groups?
• how many of these groups must be served?
• which of their interests are most important?
• how can their interests be balanced?
• how much corporate money should be allot-
ted to serve these interests?
Just as the abstract question of whether to re-
distribute corporate funds centered on the ten-
sion between shareholder claims and the claims
of all other groups, the application question
centers on the tension resulting from the com-
peting claims of all corporate constituencies,
including stockholders.
Academic analysts might be inclined to dismiss
these questions as trivial compared to the ques-
tion of the appropriateness of social responsi-
bility in general. They may see these latter
questions as subsidiary, mere details to be
worked out at a later date or postponed indefi-
nitely. Corporate managers, however, can af-
ford no such luxury. Their world begins where
academe leaves off. Corporate managers do
not advance by answering abstract questions
but by making the pragmatic, specific decisions
that confront them in the operation of their
businesses. In short, they need to know how to
use the principle of corporate social responsi-
bility. What they need then is a rule or set of
criteria to help them make socially responsible
decisions in specific instances. Consider the fol-
lowing:
• a large manufacturing firm is being pres-
sured to close its operations in South Africa in
the name of social responsibility;
• a sugar producer is contemplating a lobbying
effort for sugar price supports;
• a manufacturer of soft drink bottles is consid-
ering its stand on a state bottle return bill;
• a paper manufacturer is faced with the choice
of a prohibitively expensive pollution control
investment, a regular (but affordable) payment
of air quality violation fines, or plant closure.
What assistance does the doctrine of corporate
social responsibility provide in such cases?
In the first example, does the manufacturing
firm's responsibility to the ideal of basic human
rights outweigh its responsibility to its South
African workers, black and white? What about
its responsibility to its suppliers, not all ofwhich
California Management Review
 Table 1. The Corporate Social Responsibility Debate
Corporations have an obligation to stockholders alone
(antisocial responsibility position).
• The economic model works only if the corporation ac-
cepts the primacy of stockholder interests; this model
assures an optimal use of society's resources.
• The successful functioning of our society depends on
the role specialization of institutions. The corporation is
an economic institution and should operate only in the
economic sphere to best serve society; profit implies so-
cially preferred behavior.
• The law prevents corporations from engaging in so-
cially responsible behavior; corporate charters limit cor-
porate behavior. Further, managers are the employees of
stockholders and, therefore, must serve only them.
• Managers are not trained to pursue social goals; serious
inefficiencies and inequities will result if they are forced to
do so.
• Social responsibility, when it reduces stockholder
equity, amounts to theft; managers are appropriating and
then giving away money which belongs to shareholders.
• Social responsibility could result in political tyranny; it
is surely a threat to political pluralism and democracy.
operate in South Africa? Can the firm be as-
sured that some other firm, perhaps foreign,
will not take over the operations and perpet-
uate the problem? Can the firm be assured that
destabilizing the white regime will not contrib-
ute to social upheaval far worse than current
conditions?
In the second example, does the sugar produc-
SPRING / 1980 / VOL. XXII / NO. 2
Corporations have an obligation to constituent groups
other than' shareholders (prosocial responsibility posi-
tion).
• The economic model does not work now: oligopolistic
industries abound; owners do not control firms; govern-
ment is deeply involved in the economy. Further, the
"optimal use of society's resources" claim rests on the
dubious assumption that optimality equals efficiency;
surely equity also plays a role.
• Role specialization, while perhaps desirable, does not
and cannot exist in our modern industrial economy. Cor-
porations playa political role; governments play an econ-
omic role. Profit alone no longer implies socially prefer-
red behavior.
• The law sanctions a wide range of corporate behavior
modes. Corporate charters frequently are very broad, and
the courts have upheld managerial actions which deviated,
considerably from pure profit maximization. Further,
legal arrangements often accomodate reality rather than
creating it; the law sometimes trails, rather than leads,
society.
• Managers may not be trained to pursue social goals, but
the social and political impact of their actions is inevitable;
it is too late to claim incompetence.
• Social responsibility need not be thought of as theft; the
corporation which acts in a responsible manner may sim-
ply be paying society back for the social costs of doing
business, costs for which the firm rarely receives an
invoice.
• Political pluralism (relatively dispersed decision-making
power in society) could well be enhanced by the adoption
of corporate social responsibility, especially if the alterna-
tive is a greater concentration of power in the hands of
central government. Political democracy is already threat-
ened by the existence of large corporations, which make
important social and political decisions in a distinctly un-
democratic manner.
• Corporations are social institutions and as such must live
up to society's standards; society has changed the stan-
dards for corporations, as it has every right to do.
• If corporations do not adopt the doctrine of
social responsibility, the government, with its potential for
inefficiency and insensitive bureaucratic methods, will be
forced to step in. Social and political pluralism and many
of the remaining virtues of the "free enterprise" system as
well will be seriously compromised in the bargain.
er's responsibility to its customers, and sugar
consumers in general, all of whom would be
served by lower, unfixed prices, outweigh the
risk of going out of business (several sugar pro-
ducers have)" and its attendant impact on em-
ployees and stockholders? Surely its creditors
are owed some obligation as well?
In the third example, the impact on the firm's
61
employees and stockholders of a bill which
eliminates no-return bottles must be consid-
ered along with its impact on environmental
quality, r~source consumption, and energy
consumption. Aggregate unemployment is also
a problem of concern to society and industry
payroll reductions affect this variable as well
however slightly. ' The second facet of Preston and Post's pre-
In the final example, the firm's obligation to its
employees (and the local economy where the
plant resides) has to be balanced against an
uneconomic investment which must either be
absorbed by stockholders or by customers in
the form of higher prices. Once again, remem-
ber that individual price increases bear on an
aggregate economic problem, inflation. The
third alternative, payment of fines on a regular
basis, avoids the expensive investment and
plant closure, but does nothing to alleviate the
original problem, air pollution.
Clearly corporate responsibility is easier to
adopt intellectually than to apply, as the above
examples make painfully clear. What then may
we conclude with respect to the doctrine of
corporate social responsibility as a pragmatic
decision-making tool, one that might be helpful
to corporate managers? It simply is not very
useful!
Public Responsibility to the Rescue?
In their recent book on the subject of corporate
responsibility, Lee Preston and James Post
wrestle with this problem." After concluding
that corporate responsibility in some form is
desirable, the authors advance their own solu-
tion to the problem of vagueness inherent in
the social responsibility doctrine. Their guid-
ing "principle of public responsibility" has two
essential facets. First, they seek to limit the
scope of corporate involvement to primary and
secondary involvement. Primary involvement
is "determined by the specialized functional
role of the organization, the role that defines its
nature and social purpose and that provides
the basis for exchange relationships between it
and the rest of society.?" Secondary involvement
includes "all those relationships, activities, and
impacts of the organization that are ancillary or
consequential to its primary involvement activi-
ties."? By limiting corporate responsibility to
62
these two levels of activity, Preston and Post
have drawn very practical boundaries on what
corporations should be asked to do in social
arenas. Corporations are pointedly not
"charged with improving social conditions or
resolving social problems regardless of their
character or cause.?"
scription directly addresses the problem of am-
biguity in the application of corporate social
responsibility. The principle of public respon-
sibility resolves these sticky issues by suggesting
that public policy, the society's decision-making
system, should inform corporations in their so-
cial policy decisions. Public policy goes beyond
the letter of the law, including also the spirit of
the law, according to Preston and Post. "Policy
exists even in areas ofsocial life in which there is
no specific letter of the law for reference."?
Why? "Clearly, there are many areas of social
concern in which formal statutory require-
ments, judicial interpretation, and executive
enforcement are expensive, largely ineffective,
and perhaps even repugnant.:"? Thus, the
principle of public responsibility recognizes
public policy, more than just the law, as the
source of direction for corporate social policy.
Preston and Post claim to have cleared up the
ambiguity that surrounds the implementation
of corporate social responsibility. "Our concep-
tion of public responsibility ... answers the two
essential questions of scope and criteria that
must be dealt with in any serious approach to
the problem of corporate social involvement
. . . . "11 This is indeed a bold claim. Is it valid?
As a concept, public responsibility falls heir to
the favorable arguments made with respect to
corporate social responsibility. Further, it re-
places the "corporate conscience" decision-
making criterion implicit in corporate social
responsibility with the more tangible public
policy criterion. The behavior of firms adopt-
ing the principle of public responsibility will
thereby be closely aligned with the public in-
terest. In addition, the principle narrows the
scope of appropriate corporate involvement to
that which the corporation can reasonably ex-
pect to manage. The addition of these refine-
ments makes the principle of public responsi-
bility an even more appealing concept than cor-
porate social responsibility.
California Management Review
Public responsibility must also pass the test of
application. In order to provide a consistent
test of its applicability, consider the same exam-
ples used to evaluate the application aspects of
corporate social responsibility (discontinuing
operations in South Africa; advocating indus-
try price supports; opposing a bottle return
bill; responding appropriately to pressure to
reduce air pollution). What assistance does the
principle of public responsibility provide in
these cases?
Public policy provides virtually no help with
respect to the first issue, South African invest-
ments. In the V nited States, public policy does
not even speak to the issue. The only tangible
statements of policy in this area are the utter-
ances of various politicians that basic human
rights should be promoted. Of course, it is not
surprising that our public policy has not been
more dearly defined on this issue; it is not at all
clear what should be done. Would the pullout
of V.S. firms really upset the South African
government? It is possible that operations
would be taken over by firms based in countries
even less sympathetic to the ideals of racial
equality. This would surely cause further en-
trenchment of the present political regime.
Further, the withdrawal of V.S. operations
could cause economic chaos and its attendant
suffering without rocking the current regime
appreciably. This would merely cause hardship
(principally among those people we are ostensi-
bly trying to help) without any tangible gains
for racial equality. Another possiblity is that
political upheaval, either violent or nonviolent,
could result in a black-dominated government
more oppressive than the incumbent regime. A
quick mental review of black African govern-
ments now in power suggests this possibility.
Finally, it is quite possible that positive change
in South Africa can be effected more easily
through less radical action by corporations,
by pressure for change from within rather than
cessation of operations. It is small wonder that
our public policy has not addressed this issue.
The answers are elusive at best.
This analysis points out a major flaw in the
prescription provided by Preston and Post.
When they claim that public policy should
guide corporate managers in their social policy
decisions, they argue that public policy
SPRING / 1980 / VOL. XXII / NO. 2
means more than just formal statements of law
(and presumably regulatory edicts). What
Preston and Post fail to add is that many areas
of social concern exist for which there is not
sufficient concensus to create formal statutes!
In these cases, and there are many, views as to
what is right differ, views as to the appropriate
means to achieve the right end differ, and views
as to the propriety of further government in-
volvement differ.
For these reasons, public policy is far from clear
in many areas. The interpretation of public
policy and of appropriate action under the
principle of public responsibility is also unclear
in many corporate social policy areas. Cor-
porate managers are thrown back into a deci-
sion-making dilemma only slightly less confus-
ing than the one they faced under the doctrine
of corporate social responsibility.
With regard to the South African investment
issue, another question might well be raised:
whose public policy do we regard as dominant?
The public policy of the host nation surely can-
not be dismissed easily at a time when some
corporate responsibility advocates are admon-
ishing multinational firms to adhere to local
laws and customs in their overseas operations.
Our second example, the sugar price support
issue, illustrates further deficiencies in the
principle of public responsibility. How does
public policy inform a decision on this issue?
First, public policy in the last decade has ap-
peared to be fairly consistent in its opposition to
price inflation. Whether or not inflation is cur-
rently public enemy number one is beside the
point. It is a constant problem to politicians and
economists alike, not to mention consumers.
Second, unemployment, both on the national
and local levels, is a matter of social concern
and hence a concern of public policy. The gen-
eral thrust of public policy has been to attempt
to reduce unemployment. If domestic sugar
producers are threatened with substantial cut-
backs in sales, and hence, employment due to
foreign competition (since several domestic su-
gar manufacturers have gone out of business in
recent years, this is a reasonable assumption), it
seems likely that some form of price control
would reduce this threat and save some domes-
tic jobs. How then does public policy guide a
63
corporate manager with regard to such a deci-
sion? It does not. Public policy, as nearly as we
can discern it with respect to inflation and un-
employment, gives conflicting signals to cor-
porate decision-makers.
There is another facet to the price support
lobbying example-the question of corporate
involvement in the political process itself.
Should the corporation allow public policy to
take shape without corporate input? Certainly
not! Our legal system, our political tradition,
and our current "public policy" all provide for
corporate input into the policy-making pro-
cess. It would hardly be responsible for busi-
ness to simply drop out of the political system.
Preston and Post themselves concede the legiti-
macy of corporate participation in the political
system.'? If public policy is to guide corporate
managers with respect to decisions like this, as
the principle of public responsibility suggests it
should, what guidance does it provide? It nei-
ther dictates whether a price support is appro-
priate nor provides any guidance with respect
to appropriate involvement in the political pro-
cess through which such a price support might
be implemented.
Our third example, the bottle bill case, provides
another illustration of many of the issues dis-
cussed above, and raises another point with
regard to the usefulness of public policy as a
guideline for corporate social policy decisions.
Suppose that the state considering the measure
is firmly committed to litter reduction and re-
duced energy consumption. The objections
within the state from beverage bottlers and re-
tail merchants have been neutralized. Suppose
also that the community where the bottles are
manufactured, either within or outside of the
state, has a firm commitment to full employ-
ment (its public policy, perhaps?) and achieve-
ment of this goal is clearly threatened by em-
ployment cutbacks in the bottle manufacturing
industry. The question becomes-whose state-
ment of public policy should have an impact on
the firm's social policy decision, the bottle bill
state or the bottle-producing community? Add
to this the national public policy commitments
to reducing unemployment, promoting energy
conservation, and to reducing visual pollution,
and you have a morass of conflicting public
64
policy goals. The principle of public responsi-
bility seems to have failed again.
The fourth example, the air pollution di-
lemma, merely serves to further illustrate the
problems cited above. Public policy with re-
spect to unemployment would seem to discour-
age the plant closure alternative. Public policy
with respect to air pollution is intended to im-
prove air quality, not simply extract money
from polluters. This would seem to discourage
the regular payment of fines. No statement of
public policy yet disclosed advocates that cor-
porations make economically irrational de-
cisions, such as installing a prohibitively expen-
sive pollution control device. Adherence to
public policy would not lead the corporate deci-
sion-maker out of this dilemma either.
In summary:
• Public policy does not address many issues
that confront corporations in social policy
areas.
• Conflicting statements or expressions of pub-
lic policy exist at the same governmental level in
many areas of corporate social involvement.
• Statements of public policy emerge from sev-
erallevels of government; whose public policy
should be heeded?
In addition, public policy can conflict with
"higher laws" or "higher moral codes." Readers
skeptical of this possibility should be reminded
of Dow Chemical's traumatic experience with
napalm production. Despite the fact that its
action was clearly in concert with public policy,
the firm was roundly denounced as an irres-
ponsible corporation (and worse).
These observations summarize the difficulties
that might arise in attempting to use public
policy as criteria in corporate social policy deci-
sions. Clearly corporate managers would have
many of the same problems applying the princi-
ple of public responsibility as they would imple-
menting the doctrine of corporate social
responsibility. Public responsibility is useful in
terms of narrowing the scope of appropriate
corporate social involvement, but not in terms of
decision-making criteria. Public responsibility to
the rescue? Not really.
California Management Review
Corporate Social Responsibility as a Process
The above discussion brings into sharper focus
one basic characteristic of corporate social re-
sponsibility, public responsibility, or whatever
one chooses to call a voluntary effort on the
part of corporate managers to respond to a
broader range of social needs. It is very difficult
to reach any concensus as to what constitutes
socially responsible behavior. To make the
point even more strongly, it is virtually impossi-
ble to define social responsibility in terms of
specific decisions. Very few can be judged ab-
solutely socially responsible and not many can
be condemned as socially irresponsible. This
leads to the conclusion that corporate social
responsiblity ought not be seen as a set of out-
comes, but as a process.
Corporate behavior should not, in most cases,
be judged by the decisions actually reached, but
by the process by which they are reached.
Broadly stated, corporations need to analyze
the social consequences of their decisions be-
fore they make them and take steps to mini-
mize the social costs of these decisions when
appropriate. The appropriate demand to be
made of those who govern large corporations is
that they incorporate into their decision-
making process means by which broader social
concerns are given full consideration. This is
corporate social responsibility as a means, not
as a set of ends.
Ample precedent exists for this new concept.
The philosophical foundations of our political,
legal, and judicial systems are based on the
notion of fair process. The basic rights held by
citizens in this country are virtually always ex-
pressed in terms of right to a fair process; very
few rights are absolutely held. Contestants in
the political arena are rarely, if ever, guaran-
teed an outcome. They are instead guaranteed
a process, loosely called democratic, by which
their interests are given consideration. Citizens
are never assured that they will win a political
battle, only that their voice will be heard if they
so choose. The legal and judicial systems pro-
vide similar guarantees; a fair result is assured
only to the extent that it is reached through a
fair process. The law cannot guarantee that an
innocent person will be found innocent, but
promises a fair trial. Life, liberty, and property
SPRING / 1980 / VOL. XXII / NO. 2
can be denied, but only through due process of
law.
The analogy to the political process is not at all
farfetched considering the impact of routine
economic decisions of large corporations. When
General Motors, General Electric, or General
Telephone closes a production facility, changes
vendors, or embarks on a minority hiring pro-
gram, thousands of people may be affected.
Political scientist RobertA. Dahl has concluded
that this power is indeed political and that cor-
porations should be labeled political systems. 13
In terms of the social aspects of their decisions,
can we honestly expect more of private govern-
ments than of public governments? Perhaps
the criterion of fair process should apply to
both equally.
Implementing Corporate Social Responsibility
Once this concept of corporate social responsi-
bility is accepted, the problem, as before, be-
comes one of implementation. The new con-
cept leads to an altered set of criteria for evalu-
ating corporate social performance. Emphasis
is shifted to the inputs of the decision-making
process. Corporate managers would be ex-
pected, by whatever means, to fully examine
the potential social impact of their decisions
before the fact.
The means by which this might be done are
varied. Some firms might choose to institute
social policy study groups within the existing
corporate structure. Some might wish to hire
outside consultants. Others might feel that the
decision-making process should be formally al-
tered through the addition of special purpose
directors -environmentalists, racial minor-
ities, women, consumer advocates-or general
purpose "public" directors. Regardless of the
method or methods chosen, the important con-
cern is that the social impact of corporate deci-
sions be given full consideration in the process
itself.
It should be noted that attempts to alter the
decision-making process of society's institu-
tions have already been implemented by gov-
ernmental fiat. Environmental impact state-
ments force the corporation to carefully con-
sider the impact of proposed projects on the
environment. Affirmative action guidelines
65
force universities to show that minority and
women candidates for faculty positions are
given careful consideration. These changes in
the decision process have been mandated by
government, but voluntary actions on the part
of corporations are equally in evidence. The
boards of directors of many large firms now
include women and blacks; some also provide
representation for other constituent groups. A
number of firms also have social policy groups
which may have input into corporate decisions.
These are examples of corporate movement
toward greater social responsibility.
A specific example should help illustrate the
point. In the early 1970s, Polaroid found itself
under considerable pressure from various
groups to abandon its operations in South Af-
rica. By continuing to do business in South
Africa, the company was helping to perpetuate
a corrupt and illegitimate regime, according to
the activists. Polaroid's response was to estab-
lish a committee, made up of employees (black
and white), to study the problem and make
recommendations. The firm then adopted the
committee's recommendations by:
• stating its opposition to apartheid;
• stopping direct sales to the South African
government;
• adopting a policy ofequal pay for equal work;
• providing equal pensions for blacks; and
• providing money for sundry educational
programs for blacks. 14
How should we judge this response? According
to the original concept of social responsibility,
Polaroid's decision, by failing to address some
problems and leaving some critics unsatisfied,
is still vulnerable to charges of irresponsibility.
What about the illegitimate regime? What
about jobs that blacks are forbidden to hold by
law?
According to our revised concept of social re-
sponsibility, however, the decision was a re-
sponsible one. The company formally incor-
porated the views of its workers, the consti-
tuency which would be most directly affected,
into its decision-making process. The fact that
Polaroid also adopted the committee's recom-
mendations demonstrated the firm's commit-
ment to the propriety of the process. This is an
example of socially responsible behavior.
66
It should be noted that proposals to alter or
"reform" corporate boards are based on the
same premise, even if not explicitly stated. The
public director proposals that have originated
from a number of sources are clearly attempts
to tinker with the decision-making process and
not directly with the outputs of that process.
One reformer, Christopher D. Stone, explicitly
recognizes the process aspect of his propos-
als.!" His proposed alterations to corporate
board structure do not fit our definition of
corporate social responsibility, however, since
he proposes that changes be mandated rather
than voluntarily adopted by corporate mana-
gers.
Some Caveats
Two possible problems exist with respect to this
newly defined concept of corporate social re-
sponsibility. First, there is a danger that altera-
tions to the decision-making process will be-
come ends in themselves. Corporations could
begin to pride themselves on process changes,
such as the number of minorities or women on
their boards, while at the same time either ig-
noring the input from these new representa-
tives or consciously shifting the real decision-
making capacity to subunits of the existing
structure, such as the executive or finance com-
mittees of the board. Stone recognizes this
danger with respect to his proposed addition of
public directors. 16 However, voluntarily
adopted process changes could well result in
sincere efforts to incorporate more diverse in-
puts into corporate decisions.
Second, process changes will not necessarily
result in changed corporate behavior. The link
between a changed process and changed be-
havior may be difficult to establish. This should
be recognized in advance. Further, since im-
proved corporate social behavior is madden-
ingly hard to define, it may be that we, as a
society, must content ourselves with an im-
proved process until we have clearer defini-
tions in mind. Until such time as social goals,
and more particularly, the relative importance
of our many social goals come into sharper
focus, we must not expect more ofour corpora-
tions than we do of our other social and political
institutions.
California Management Review
REFERENCES 8. Ibid., p. 97.
9. Ibid., p. 100.
I. Robert L. Heilbroner, Business Ciinlizatum in Dec/me
10. Ibid.
(New York: Norton, 1976), pp. 101-24.
II. Ibid., p. 104.
2. Randall Bartlett, Edwin Epstein, Joseph Pratt, and
Dow Votaw made helpful comments on an early draft of 12. Ibid., p. 147.
this article. 13. Robert A. Dahl, "Governing the Giant Corpora-
3. Lee E. Preston and James E. Post, Prioate Manage- tion," in Ralph Nader and Mark]. Green (eds.) Corporate
ment and Public Policy (Englewood Cliffs, New Jersey: Pouter In Amenca (New York: Grossman, 1973) p.11.
Prentice-Hall, 1975), pp. 29-42; and Kenneth D. Walters, 14. "Polaroid to Continue South African Program to
"Corporate Social Responsibility and Political Ideology," Aid Black Workers," Wall Street Journal, 31 December
California Management Review, Vol. XIX, No.3 (Spnng 1971, p. 13
1977) pp. 40-5 I.
15. Christopher D. Stone, Where the Law Ends (New
4. "The Sugar Wars," Newsweek, 14 August 1978, p. 47. York:Harper&Row,1975),p.121.
5. Preston and Post, op. cit. 16. Ibid., p. 132.
6. Ibid., p. 95.
7. Ibid., p. 96.

SPRING / 1980 / VOL. XXII / NO. 2 67