International Law

CSR and the Economic Crisis

By Stan

This is more of a question than an informative post, but an article about GSK got me thinking:

The world’s second biggest pharmaceutical company is to radically shift its attitude to providing cheap drugs to millions of people in the developing world.

In a major change of strategy, the new head of GlaxoSmithKline, Andrew Witty, has told the Guardian he will slash prices on all medicines in the poorest countries, give back profits to be spent on hospitals and clinics and – most ground-breaking of all – share knowledge about potential drugs that are currently protected by patents.

Witty says he believes drug companies have an obligation to help the poor get treatment. He challenges other pharmaceutical giants to follow his lead.

For the sake of argument, let’s assume that GSK will follow through on all this. Let’s also assume that this announcement has absolutely nothing to do with altruism. I know, that’s incredibly cynical, but I’m going somewhere with this, so cut me some slack.

My question is whether the economic crisis, and an understandable resurgence in populism in many countries (leading the way is the U.S.), will lead to changes in corporate behavior. Even if this change in behavior is based on fear (e.g. compensation package changes in many auto and financial services enterprises), marketing, or other factors, I wonder whether corporations will actually change their behavior in response.

The reason why I discount altruism is that it is not usually effected by external economic factors (I think), whereas normal corporate decision-making is profoundly effected by external shocks or trends. In other words, it’s a lot easier to track cause and effect when you deal with rational actors (for more on this issue, see generally the study of Economics - ha ha).

Anyway, emails are welcome, assuming that the above was even marginally coherent.

Full post as published by China Hearsay on February 16, 2009 (boomark / email).