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Dr. Emiliano Hudtohan

Educator, Business Writer, Industry Expert and Entrepreneur

Antifragility as a Theoretical Lens in Reviewing Corporate Social Responsibility

Dr. Emiliano T. Hudtohan

 Journal of Business, Education and Law (BEL), 20(1). SY 2015-2018  ISSN 0117-6455

Jose Rizal University, Shaw Boulevard, Mandaluyong City, Metro Manila

 

 

Introduction

This paper makes use of Taleb’s antifragility concept as a theoretical lens in viewing corporate social responsibility (CSR). In business, philanthropic CSR falls as a fragile execution of social responsibility; corporations sharing their core values with the community may be considered a robust practice of CSR, and corporations initiating community-based projects can be classified as antifragile CSR from the point of view of the project beneficiaries.

 

Objectives

This commentary primarily aims to provide academicians who are steeped in linear statistics an additional perspective on randomness based on chaos theory. This is a chance to understand Taleb’s  antifragility. Secondly, it offers business management practitioners an insight into change that creates problems in the normal course of an enterprise that has stabilized and has achieved equilibrium in its operations. Thirdly, Taleb’s triad, composed of fragility, robustness and antifragility, is used as theoretical lens on a CSR triad, consisting of philanthropic CSR, corporate shared values (CSV) and corporate social initiatives (CSI). Fourthly, it presents Taleb’s concept and visual of concavity and convexity in viewing corporate social responsibility.

 

Methodology

Taleb’s narrative style tin explaining what is fragile, robust, and antifragile. The arguments in his book, Antifragility, are mini cases he presents based on his experience as an investment trader, which is heuristic in approach (Moustakas, 1985; Pillans, 2014).

As such, I follow his methodology of narrating my personal observations by telling my own story by using his antifragility concepts on the various aspects of corporate social responsibility as practiced by the business sector today. My narration and storytelling provide reflections on antifragility, chaos theory, and CSR practices.  From these reflections, this commentary also provides opportunity for further action through research.  Recommendations for further studies are cited at the end of the commentary.

 

 Fragility and Antifragility

Fragile vs. Antifragile

Merriam-Webster defines fragile as “easily broken or destroyed” and “constitutionally delicate and lacking in vigor.”Dictionary.com defines it as “easily broken, shattered, or damaged, delicate, brittle; frail, vulnerably delicate, lacking in substance or force, and flimsy.”

Robust is defined in Merriam-Webster Dictionary as “strong and healthy, strongly formed or built, successful or impressive and not likely to fail or weaken.   Dictionary.com says it is “strongly or stoutly built: suited to or requiring bodily strength or endurance; rich and full-bodied; and strong and effective in all or most situations and conditions”

Taleb does not define the opposite of fragile as robust; he creates an oxymoron by presenting a non-existing word in the dictionary: antifragile.  To prove his point, he lists 58 examples of “fragile-robust-antifragile” triads that we normally experience in our daily life.  His triads are presentations of heuristic, experiential data and he admitted he was not into creating a theory or generalization.  But the insights he makes are certainly mind-boggling and one is led to nod his head and agree to many of these triads.  I recognized 16 triads as an axiologist, ethicist and values formateur.  I somehow got a feel on what antifragile is.

For Taleb the opposite of fragility is beyond being robust and resilient; the opposite is antifragility. He looks at antifragility as a property of systems that increase in capability, resilience, or robustness as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. Simply, antifragility is defined as a convex response to a stressor or source of harm, which leads to a positive sensitivity to increase in volatility in term of variability, stress, dispersion of outcomes, or uncertainty. He grouped factors under the designation “disorder cluster”.  He defines fragility as a concave sensitivity to stressors, leading a negative sensitivity to increase in volatility. According to him the relationship between fragility, convexity, and sensitivity to concavity and disorder is mathematical, obtained by theorem, not derived from empirical data mining or some historical narrative. (Taleb, 2012).

On the other hand, the Eastern approach to resiliency is to discipline the mind to calm, non-combative attitudes in all conditions.  At the spiritual core, “Everything is already inside” for Tamura believes that you are the answer.  He says, “To be who we are, to have all that is within us and to fully express our divine heritage – that is our purpose for living and the destination of our journey..”(Tamura, 2007, p.5). Seale (2003) remarks, “The more you know who you are and the more you live that true identity, the stronger and clearer are your perceptions and sense of reality, and the less you are swayed by forces that go against your nature.  You have the power to make your own choice and to create your life as you want it to be.”(Seale, 2003, p.5).  Tamura and Seale affirm need to be resilient and therefore one comes out robust, but not antifragile in Taleb’s terms.

Taleb (2012, p.3) introduces antifragility as “some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

cupcake

 

Figure 1. Taleb’s visual of concave: frown and convex: smile (www.emaze.com)

 

Taleb (2012, p. 271-272) discusses convexity and concavity. He cleverly uses the smile button illustrating what is convex and frown button as concave.  His visuals are easily recalled when compared to a geometric and mathematical representation of convex and concave in Figure 2.

concave

 

Figure 2.  Geometric visual of convex and concave images (www.mathsisfun.com)

 

Visually, it appears that concave fragility assumes that the impact of a stressor is inwardly absorbed and the individual needs to fortify himself by being robust.  It is a defensive reaction against stress by being able to arrest the negative impact.  The self is protected from further collapse by being robust.

But convex antifragility is a proactive posturing.  In sports and in chess for example, a strategic move is to adopt the idea: the best defense is a good offense.  It means the individual is aggressively building his resiliency and strength by exercising his power to react and even conquer the environment.  It appears that this is a very aggressive Western approach, exercised by the Nomads in Europe and eventually transferred to the New World of America.  It spread throughout South America and eventually to Asia through Spanish and American conquests. The concave approach is very Asian. Traditional China was defensive by building the Great Wall; traditional India protected its interest in Gandhi’s era by non-violent resistance.  The Hindu Zen gurus meditated and levitated to create peace and harmony.

 

I am familiar with the maxim: What does not kill you will make you stronger. But Taleb’s (2012, p.76) variant is “What does not kill me makes kills others.“  I researched and discovered that my common understanding of getting stronger came from philosopher Friedrich Nietzsche’s1888 book entitled, Twilight of the Idols. The original German phrase was “Was mich nicht umbringt macht mich stärker.” This saying comes from the “Maxims and Arrows” section of that book. It is usually translated into English as “what does not kill me makes me stronger.” Taleb further explains, “What did not kill me did not make me stronger, but spared me because I am stronger than others; but it killed others and the average population is now stronger because the weak are gone.” (Taleb, 2012, p.76)

 

Taleb (2012, p.74) opines that Nietzsche’s maxim is either Mithridatism (King Mithridates practice of protecting oneself against a poison by gradually self-administering regularly non-lethal amounts to develop immunity) or hormesis (an example of mild antifragility, where the stressor is a poisonous substance and the antifragile becomes better overall from a small dose of the stressor). He says, this is different from robustness or resilience because the antifragile system improves with the stressors that are not too large or small. Conclusively, Taleb believes that depriving the systems of vital stressors is not necessarily a good thing and it can be downright harmful.

 

Howden (2014) presents some of Taleb’s insights on antifragility.  He says, “Authors should be shocked to learn that there is almost no news that can harm a writer’s credibility, and that any publicity is good publicity (pp. 51–52). Corporations and governments that try to ‘re-instill confidence’ should not be trusted because they would do so only if they were ultimately doomed (p. 53). Children shouldn’t be on antidepressants as this removes a source of learning from the life experience and thus make individuals less capable of dealing with unwanted events later in life (p. 61). The sinking of the Titanic was a positive disaster as it put shipbuilders on their toes, and possibly avoided an even larger accident later (p. 72). The general theme is that those who make errors are stronger than those who don’t—reliability, or antifragility—only comes when something is regularly tested by an unwanted event.”

 

Randomness and Fragility

 

Ancient literature provides us some insights into the origin of chaos. In the Greek cosmological poem, Theogony, Hesiod (c.725 BCE), in line 116, states that “first of all Chaos came to be” and the Earth and everything else became stable.  The Greeks accepted disorder as a precondition to order. In Chinese mythology, the dragon is a visual image of order (yang), which emerged from chaos.  Then, the Chinese creation myth yin, a ray of pure light emerges from chaos and  builds the sky; Yin (female) and yang (male) principles act together to create the universe.  As they emerged from chaos, they both retain the qualities of chaos.  Cartwright (2012) observed that“[I]n the I Ching, the ever-changing relationship between the two poles is responsible for the constant flux of the universe and life in general. When there is too great an imbalance between yin and yang, catastrophes.”

 

In quantum physics, chaos is “unpredictable behavior occurring in response to precisely deterministic laws.  An essential feature of a chaotic system is that its behavior is non-linear, so that a small change in the initial conditions of…a situation in the world may have a very large influence on the outcome…This means that what are called ‘predictive errors’ resulting from the precision of our knowledge about the initial conditions of the system get bigger as time passes, until, beyond certain point, we cannot predict how the situation will develop at all.” (Gribbin, 1998, p.73).

 

According to Laszlo (2006, p.vii), “Chaos in modern systems theory defines the state of a system in which its stable cycles and processes give way to complex, seemingly unordered behavior, governed by so-called strange or chaotic attractors. . . A chaos window – in the human context of decision-making – is a transitory period in the evolution of a system during which any input of influence, however small, can ‘blow up’ to change existing trends and bring new trends and processes into existence.”  He concludes that the 21st century has reached the chaos point, the crucial tipping point in the evolution of a system which can bring about a breakthrough or a breakdown.

 

Wheatley (2008), in agreement with Taleb’s randomness and chaos, asserts that equilibrium which stabilizes any system or organization tends to promote stagnation, leading to non-growth and entropy and therefore chaos is needed to bring about change. In her book, Leadership and the New Science, she comments on equilibrium and entropy, saying “equilibrium is a result of the workings of the Second Law of Thermodynamics…equilibrium is the end state of evolution of closed systems, the point at which the system has exhausted all of its capacity for change. Entropy is an inverse measure of a system’s capacity for change, done its work, and dissipated its productive capacity into useless entropy.” (Wheatley, 2008, p. 76).  She defines entropy as an inverse measure of the system’s capacity to change, similar to   Taleb’s “concave” reaction to change that brought about fragility.  She cites Peter Convey and Roger Highfield (1990, p.153) in affirming Taleb’s observation on fragility. She says, “Entropy and randomness are at their greatest, in which all life has died out.” Taleb’s panacea to entropy and randomness is antifragility.  This is his new contribution in the field of Chaos Theory, even if he intentionally states that he is not into theory building.

 

Braden (2009), in Fractal Time, sees cyclic history, even in random events that create chaos. He says, “Growing evidence suggests that time’s waves, and the history within them, repeat as cycles within cycles.  As each new cycle begins, it carries the same conditions as the past, but with greater intensity.  It’s this fractal time that becomes the events of the universe and life.” In his language, fractal time is Taleb’s antifragility randomness. In the mind of Braden, random events eventually reappear as patterns.

 

Chaos and Antifragility

 

Taleb (2012) recognizes this quality as antifragile, which allows the organizations to grow when exposed to volatility of their immediate environment by learning to manage it. In Taleb’s estimation, antifragility considers randomness as an essential ingredient for organizations to prosper; by depriving organizations from volatility and shocks, they lose the opportunity to grow and their system is weakened.

 

Ayham and Backhouse (2013) assert that for viability and growth to be maintained in chaotic environments, organizations have highly effective learning systems in order to manage and learn from stressors they experience (Hannah & Lester, 2009).  They  presented service  operations  designed to  build  an  “antifragile”   organization  to  learn  from  disruptions. Their  findings  suggest  that  the  Vanguard  Method  will  likely  enhance  organizational “antifragility” by promoting a multilevel driver for learning from stressors. Antifragility can be operational in three levels: 1) the macro level of clarity on the system, 2) the meso level of organic structure of work place, and 3) the micro level of employees’ engagement with work and readiness to learn.

 

Siegel and Etzkorn (2013, p.3) look at chaos from the side of complexity that is “wreaking havoc on business, government and finance.”  Their solution to complexity is simplification which requires organizations to empathize, distill and clarify.  For them, “simplicity begins with empathy by having the ability to perceive the needs of others; it needs to distill by boiling down and customizing what’s being offered to meet needs; and it must clarify to make the offering easier to understand, use, and benefit from information that complicates.”(Siegel & Etzkorn, p.48-49).

 

Holmes (2006) says, “I knew that there are cycles and phases that return again and again, like the brass ring on the merry go-round.  The ring doesn’t disappear.  We can relax and trust the turning.  The vitality in the earth is irrepressible, and will continue to pulse in and out of visibility, like a star winking in the night sky.  When fragility strikes you, here is her advice when things feel stuck: When work projects feel stuck, try taking a break from the task.  If you are in the process of remodeling or building, or just wishing to be more comfortable or productive in your current quarters, it can be very helpful to take a time-out. . . Nature is always waiting to connect with you and is always just a sound, a beautiful science, or a fresh smell away.” (Holmes, p.239).  With her, I say, nature makes us good natured and makes us antifragile

 

 

 

 

Vulnerability and Fragility

 

The valuative pronouncements of Brown (2013), L’Engle (1980) and Coelho (2003) on vulnerability provide us with a foundational understanding of human frailty. With Taleb’s antifragility paradigm we are challenged not only to accept our vulnerability but also to actively pursue a life that makes us grow in the face of most difficult and trying circumstances.

 

Brown (2013, p.32) greatly dares us to have the courage to be vulnerable and accept our fragility.  She says, “Yes, we are totally exposed when we are vulnerable.  Yes, we are in the torture chamber that we call uncertainty.  And yes, we’re taking a huge emotional risk when we allow ourselves to be vulnerable. But there’s no equation where taking risks, braving uncertainty, and opening ourselves up to emotional exposure equals weakness.”  From this statement, vulnerability is defined as uncertainty, risk and emotional exposures.  Further, she says, “We cultivate love when we allow our most vulnerable and powerful selves to be deeply seen and known, and when we honor the spiritual connection that grows from that offering [we grow] with trust, respect, kindness and affection.”

 

L’Engle (1980) in her book, walking on Water, believes that to be alive is to be vulnerable in the end and Coelho (2003, p.200) in his Spanish novel, Eleven Minutes, arrives at the same conclusion:  “The strongest love is the love that can demonstrate its fragility.”  The position taken here is that of fragile concavity and acceptance of fragility.  In the mind of Taleb, it may bring about robustness but definitely not growth.  It is when one surfaces from fragility and robustness, coming out much better than ever that one is considered antifragile.

 

Taleb will not take vulnerability and fragility sitting down.  For him, the best defense against vulnerability is antifragility. He argues: in science move from theory to heuristics, in dealing with regulations move from following rules to being virtuous, in learning move from the classroom to the real life immersed in the library, in seeking knowledge move from the academia to become erudite, in philosophy and science from rationalization to skepticism and subjective empiricism, and in physical training from organized sports and gym machines to street fights. (Taleb, 2012, pp.23-37).

 

 

CSR Triad

 

Taleb (2012, p.23-27) demonstrates antifragility by means of 52 central triads; but only 40 have three types of exposures showing the progressive fragile-robust-antifragile triads; and 24 central triads did not have any intermediate robust description.

 

I can relate with Taleb’s central triads on philosophy, education, learning, business, decision-making, ethics, human relationships and politics.  His examples in these areas show what fragility, robustness and antifragility are. Table 1 shows five triads I selected as fairly easy examples of what Taleb means by fragility, robustness, and antifragility.

 

In human relationships it is easy to understand that family and kinship is stronger than friendship and attraction or bonding is even greater than kinship or family ties.  Compliance to regulations by mere compliance with the rules is not as good as basing one’s conduct on ethical and moral principles; but when one put those principles into action, that person becomes virtuous and his behavior will always be consistent in doing what is right, what is good and what is beautiful. As educators, we must take note that learning in the traditional sense is classroom based, but real life learning through struggle and pain can make us smart and robust.  However, real life learning by being street-smart needs a fount of knowledge stored in a library.  And finally in business, corporations dominate the economic life of every nation; it is suggested that small business are easier to manage based on the principle of ‘small is beautiful’.  What is suggested for business to be antifragile is to go back to the model of artisanship which is single ownership and proprietorship.  This emphasizes a disrupted innovation of social entrepreneurship.

Taleb's Triads

 

 

 

Table 2 presents a corporate social responsibility triad: philanthropic, corporate shared values, and corporate social initiatives. I will use these triads to mirror Taleb’s heuristics and at the same time explain my own personal triads.

Triad Hudtohan

 

Brief History of Corporate Social Responsibility

 

There has been a plethora related literature on the history of CSR.  I have chosen Madrakhimova’s (2013) historical tenets as background to corporate social initiatives and corporate shared values as additional CSR tenets as shown in Table 3. By reviewing the timeline of corporate social responsibility, we will be able to understand how business developed from an institution that was mainly dedicated to its avowed responsibility to make money to one that became aware of others who also need money to survive.

Madrakhimova

 

 

 

madrakhimova 2

 

 

 

 

If I may, I consider CSR of Bowen (1953), Davis (1960).  Networks (1975), Carroll (1979), the stakeholder’s view on CSR of Freeman (1984), Clarkson (1985), Donaldson and Preston1995), Post, Preston and Sachs (2002), and corporate citizenship of Longsdon Wood (2002) are fragile CSR. The benefits with which these CSR concepts bring members of society who need help are not sustainable.

 

I consider corporate social  responsiveness (Ackerman, 1973; Preston & Post, 1975; Frederick, 1978; Carroll, 1979), corporate social  performance  (Carroll, 1979;  Vatika & Korhogo, 1985;  Wood, 1991) and corporate sustainability (Van Merreviyk, 2003; Steuer, 2005) as supportive concepts leaning towards corporate social initiatives (CSI) and corporate shared values (CSV) because the beneficiaries in a given community are community centered; CSV is promoting twin goals through partnership with the company as key determinant of the project; CSI is also promoting community involvement but advocates projects that are initiated and owned by the targeted beneficiaries for sustainable livelihood.

 

The corporate social responsibility central triad is composed of three types of exposure, namely, philanthropic CSR, corporate shared values (CSV) and corporate social initiates (CSI).  Philanthropic CSR is fragile, CSV is robust and CSI is antifragile.

 

Philanthropic CSR 

 

By the end of the 20th century, the rise of corporate social responsibility (CSR) was made prominent by Archie Carroll (1991; 1999) whose CSR pyramid of economic, legal, ethical, and philanthropic activities is now considered a classic framework for CSR practitioners. The basis of what we consider to be the modern definition of CSR is rooted in Archie Carroll’s Pyramid of Corporate Social Responsibility. The pyramid has four types or levels of responsibilities. The first and foremost is the economic profitability. The second is legal responsibility to obey the laws set forth by the government. The third is the ethical responsibility, which goes beyond legal compliance to law. The fourth is the philanthropic responsibility. This voluntary and discretionary responsibility is corporate responsibility toward internal and external stakeholders.

CSR Beneficiaries

 

 

 

 

 

Figure 5 shows a corporate response through voluntary initiatives that benefit the community as external stakeholder.  The principle of giving here is often considered philanthropic but critics look upon it as temporary and short term alleviation of the poor and unproductive sector of society.  Some corporations are also accused of using such CSR as public relations and corporate marketing strategy. From Taleb’s perspective, this is fragile CSR because it is not sustainable and its impact on the community is concave fragility.

 

Corporate Shared Values

 

Michael Porter and Mark Kramer (2011) argue that innovating to meet society’s need and building a profitable enterprise are the twin goals of the next generation of completive companies.  Marc Pfitzer, Valerie Bockstette and Mike Stamp (2013) used the case of Dow Chemical, Nestle, Norvatis, Mars, and Intel as examples of companies following Porter and Kramer’s idea of creating shared value with and for their external stakeholders.

Social Development Process

 

 

 

 

 

Figure 6. Corporate Shared Values (Porter & Kramer, 2011)

 

Their shared value model encompasses the creation of a social and business value which includes: social purpose, a defined need, measurement, the right innovation structure, and a co-creation.  These five elements reinforce on another.  They said, “Social purpose helps a firm identify the needs it might want to address…A deeply held social purpose is also important for co-creation, forming the basis for trusted relationships.  Understanding a region’s particular needs helps define what can be improved and by how much, and the value of that change to the business.  The degree to which the potential for shared value can be anticipated and aligned with the company’s financial criteria determines the optimal innovation structure forth social venture.”(Pfitzer, Bockstette & Stamp, 2013).

 

Sustainability projects with the community entails developing community manpower resources as inputs to achieve the mission, vision, and values of the company.  This is corporate-centered endeavor and the beneficiaries in return support the values of the company, as shown in Figure 6 by the two circles overlapping in the Venn diagram.  This appears robust because both parties appear to have a win-win   advantage.   However, the community as beneficiaries has not achieved a full convex antifragility.

 

Corporate Social Initiatives

 

Beyond philanthropic endeavors that provide short-term impact on the community, corporations are encouraged to directly involve themselves in sustainable community projects (Alperson, 1996; Hess, Rogovsk, and Dunfee, 2002, Habaradas, 2013).  In this new development framework, CSR is sustainable because it has graduated from giving away fish to teaching the community how to fish. (Hess & Warren, 2008).

 

In the Philippines, the CSI concept is exemplified by The Philippine Business for Social Progress (PBSP). Founded in 1970, it has involved 260 large, medium-scale and small businesses intended to help the poor rise above poverty and become self-reliant.  It has benefited 4.5 million Filipinos and has assisted over 6,200 social development projects through more than PHP 7 billion in grants and development loans. (www.pbsp.org.ph).

 

I consider CSI as antifragile social responsibility because from the point of view of the beneficiaries, they are in a convex mode of relationship.  Visually, this is translated to a happy smiling face of Taleb’s antifragile convexity. When this happens, corporate capitalist institutions are behaving from a Marxian socialist view of social enterprise.  Taleb’s triad on business categorizes corporations as fragile, small and medium (SMEs) enterprises as robust, and the artisan as antifragile.  I surmise that big business is more susceptible to financial and economic shocks by virtue of their large scale operation.  SMEs from the point of view of risk management are better off than multinationals operating globally.  The artisan or craftsman as a single entrepreneur can easily manage retrenchment by slowing down his/her operations and easily expand by determining his/her own pace of expansion and progress with less burdensome bureaucratic procedural requirement.

Philantropic CSR

 

 

 

Figure 7. Corporate Social Initiatives (Hess, Rogovsky, Dunfee, 2002)

 

Eastern Socialist CSR 

 

But CSR in the East, exemplified by Chinese government, is mandatory and not voluntary as originally conceive by the West. China, one of the world’s emerging superpowers, is now   challenging the economic and political hegemony of the United States and Europe (Morris, 2011).

 

Although China is one of America’s largest trading partners, it is now attempting to develop a new, legal, but not voluntary CSR system. Bradford and Posner (2011) note that China takes the strictest line on sovereignty and contests the use of military force against independent states. But China also believes that international law should lessen burdensome obligations on poor countries and economic growth should take precedence over human rights in poor countries.

 

China’s move toward mandatory CSR is part of the macro historical transformations throughout China, as the Chinese government re-orients the Chinese economy into a capitalistic market- based economy in order to raise its global economic and political power through which it carries out its economic reforms.  For the Chinese government, CSR is a major component in addressing the social unrest of its people as it undergoes rapid economic growth and change. China’s recent CSR reforms are driven by the government revolutionary shift from a state-run economic system to a privatized, market-oriented capitalist system aimed at increasing China’s economic development and economic growth.

 

For nearly a generation, and accelerating in the past decade, the Chinese government has tried to re-orient its state-run business economy toward private capitalist enterprise as part of a policy for reform. It moved away from a centrally planned economic system to one that embraces a laissez faire, free trade and liberal economic principles long practiced by the West. Thus, the Marxian tradition of many social welfare services that were formerly provided by the Chinese government are now turned over to the private sector or individuals (Chodorow, 2012).

 

The concept of corporate social responsibility originally implemented as voluntary philanthropic endeavor is now an obligation of private corporations to act in behalf of the Chinese government in addressing the needs of the impoverished sector.  From a Marxian socio-economic perspective, it appears that antifragile corporate social responsibility has now evolved into an antifragile state-business partnership in CSR.

 

Concavity and Convexity of CSR

 

With a tinge of humor, Taleb uses a smiling face to visually demonstrate the positive impact of a random event.  In CSR, I translate the happy face of a corporation when it has done its voluntary share of providing assistance to a disadvantaged community, no matter how temporary and unsustainable that philanthropic program is as shown in Figure 4.

Dole Out Beneficiaries

 

 

 

 

Figure 4. Philanthropic CSR in convex mode

Figure 5 shows mutual happiness of both the company that shares it values through a twin goal CSR program with its beneficiaries.  I positioned the relationship on the same level to show a visual

representation of a smiling face

Engaged Beneficiaries

 

 

 

 

Figure 5. Corporate Shared Values in convex mode

 

Figure 6 shows that the community that benefits from the CSR program through corporate social initiatives is positioned at the top as a smiling happy face.  It means that they are self-initiated programs that will make them resilient and grow in times of adversity and enormous challenges.  It means they are able to within the shock and survey and grow after the shock, no longer dependent on the sponsoring CSR company.

 

Self Initiated Entrepreneurs

 

 

 

 

Figure 6. Beneficiaries [self-initiated entrepreneurs] n convex mode

 

In Taleb’s business triad, he considers corporate multinationals as fragile, small and medium industries as robust but artisans as antifragile.  Artisans, in my estimations, are entrepreneurs who are creative and mobile in their craft and business endeavor because they are not saddled with bureaucratic business structure.

CSR Quadrant

 

 

 

 

 

 

 

 

Figure 7. CSR, CSV and CSI in a Philanthropic and Beneficiaries Quadrant (Hudtohan, 2016)

Conclusion

 

Taleb successfully demonstrated the meaning of fragility, randomness and antifragility through his heuristic cases.  As such, he was able to demonstrate in detail various elements that are operational in Chaos Theory, like randomness, volatility, and vulnerability.  Convincingly, he reinforces the need for change when things reach equilibrium.  To prepare for shocks that bring about disruption and destruction, he prescribes antifragility, not only for survival, but also for growth and development.

 

Taleb’s on the ground observations showed how randomness and chaos theory are operationalized.  For this reason, he was correct in saying that his book was not trying to establish a theory for in fact a myriad of authors have already articulated the theories, axioms, and principles for every facet of human endeavor. His triads in reality provide an evolutionary framework on how the state of being fragile can eventually develop into one that is antifragile. In practice, statisticians dealing with investment trading and money market, insurance actuaries, financial analysts, economists and engineer, to name a few professionals will find it challenging to help and protect their clients from being hit by random events that may cause financial disasters.

 

Concavity and convexity is visually represented by Taleb as happy and frowning faces.  Here he adds a little of humor in his otherwise very serious and heavy discussion on antifragility.  When applied to CSR, philanthropic CSR is seen as a happy activity of a given company when helping financially disadvantaged beneficiaries.  The practice of corporate shared values has two arrows which show that both, the company and the beneficiaries have similar mutual happy disposition.  Companies that practice corporate social initiative emphasized the happiness of the beneficiaries who, through self-initiatives, determine and create their own entrepreneurial program for sustainable livelihood.  Visual artists and left-brainers will find the cartoon happy and sad faces of Taleb easy-to-understand demonstration on the positive and negative impact of random events.

 

Corporate social responsibility in a triad sees philanthropic CSR as a fragile because the beneficiaries for a while become secure physically and financially but in the long term they become vulnerable and once more dependent on donations and dole-outs. Companies have a robust CSR when they involve the beneficiaries as recipients of their projects through corporate shared values involve the community as inputs to their projects.  They therefore help the beneficiaries robust and resilient in a relatively short term basis within the life of the project.  Companies that empathize with the community through their corporate social initiatives (CSI) see the social development of the community no longer from the business bottom line of profitability but from a social development perspective.  As a result, they are developing social entrepreneurs who determine their business goals, even when these are not aligned with the corporate goals of the sponsoring company.  From this perspective, the company that exercises CSI helps the beneficiary become antifragile.  They help them face financial adversities and are able to grow through sustainable livelihood.  They are no longer receiving fish.  They are now fishing on their own.

 

Antifragility in the business sector calls for moving CSR to a robust level of corporate shared values (CSI) and move further to corporate social initiatives (CSI) if corporations wish their beneficiaries to be antifragile.  The Marxian view on economics is socially oriented and therefore corporations must initiate moves from its current commercial wealth production to that of common wealth orientation.

 

 

Recommendations

 

Academicians teaching business management may wish to explore the metaphysical roots of random events which are based on Chaos Theory.  The classical mainstream view of management has to be complemented with multistream approach to management, which is anchored no longer on physical, linear science but in the new science of metaphysics.  There is a need to explore in management topics like quantum organization and quantum leadership.

 

There is a need for further research on corporate shared values as a mode of social responsibility which promotes partnership between the company practicing CSR and the community beneficiaries who are project participants.  In the process, the company provides employment and the beneficiaries gain monetary alleviation.

 

For companies that wish to promote corporate social initiatives, they mudt consider adopting some of the social development framework that focus on the development of the community first to enable and empower the community to choose their own definition of sustainable livelihood projects, rather than being chosen to participate in a pre-determined company-centered project.

 

 

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