Managing ethical standards: When rhetoric meets reality

In the last two decades, the private sector has been placed under intensifying pressure to ensure it operates in an environmentally and socially responsible manner. Companies have moved through various phases of response, starting with a ‘deny and defend’ position, moving to ‘paying penance’ through donations and philanthropy, and currently settling on risk management through mitigating the negative impacts of their business operations. Drawing on research undertaken by Oxfam International mainly in the retail sector, as well as in the coffee and pharmaceutical sector, this article argues that the current approach is, as yet, inadequate. Simply mitigating negative impacts through castigating intermediaries or suppliers does not contribute to sustainable solutions. For the private sector to meet corporate social responsibility pledges, companies need to pursue alternative business models that forge connectivity, coherence, and interdependence between their core business operations and their ethical and environmental commitments.     

Outsourcing and China's Rising Economic Power

U.S. firms are outsourcing more and more of their core manufacturing activities to companies in lower-cost countries such as China. However, U.S. policymakers and businesspeople often do not fully understand the complex relationship among outsourcing, corporate sources of competitive advantage, and U.S.-Chinese geo-economic and strategic relations. U.S. companies often must surrender key technologies to Chinese partners and suppliers in order to gain access to the Chinese market. This knowledge transfer helps spawn Chinese rivals that are likely eventually to compete with foreign companies in the global market. This article considers some of the long-term implications of outsourcing on China's regional development and on U.S. competitiveness and national strategy.     

Principles of Participatory Communication Reconceptualised for Instructional Corporate Social Responsibility Communication

One of the main aims of corporate social responsibility (CSR) is to contribute to sustainable development, and effective communication is imperative in reaching this goal. When the aim of communication is to contribute to sustainable development, it falls within the field of communication for social change, where the participatory approach is the norm. However, the context of instructional CSR communication poses challenges to the traditional conceptualisation of the participatory approach. This creates a need to reconceptualise the participatory approach for instructional CSR communication contexts. A literature review identified four main principles of the participatory approach (dialogue, participation, cultural identity, and empowerment) and illustrated how they are traditionally conceptualised. The empirical study focused on two companies’ CSR programmes where agriculturists were assisting emerging farmers with training, skills development and mentoring. Sixteen semi-structured interviews with farmers and agriculturists were conducted to determine the applicability of the theoretical principles as traditionally conceptualised for this context. We argue that beneficiaries may not be able to participate as equal partners in all aspects of the CSR initiative from the beginning (as traditionally assumed), but that they should, through their involvement, be empowered to participate more meaningfully in later stages even though power will remain largely with the company.     

Strategies moulding brand reputation building in the early 21st century

Abstract

Since the mid-1990s, the changing political, economic and social environment and globalisation have contributed to change business behaviour in South Africa. Nowadays, business strategies are built alongside sustainable business goals, with renewed emphasis on quality and brand reputation management. Business intelligence (BI) systems and research demand show clear emphasis on customer brand franchising and brand citizenship in particular. Brands are no longer used only as marketing communication tools. Nowadays, brand companies seem well aware of stakeholders’ concerns with non-financial business aspects and are responding through re-branding, improved customer relations and good corporate citizenship behaviour. Consequently, direct customer feedback via customer satisfaction and franchise-building research, as well as corporate citizenship image and perception surveys have emerged as key research tools that generate business intelligence used to build and protect company reputation. The way in which contemporary research designs are constructed to guide reputation building and protection, and how these inputs are used to guide business reputation strategies form the core of this article. The discussion reveals that corporate reputation and brand management functions are increasingly being synchronised in support of customer-based brand equity, customer franchise and reputation building. This suggests substantial communality between the management functions relating to corporate reputation and branding. Corporate branding and reputation are anticipated to evolve as a core business strategy aimed at building and protecting corporate identity and image. To meet this endeavour, companies will continue to brand their identity and image and create brand awareness and customer relations to enable stakeholders to differentiate company products, services and features from competitor offerings, but will simultaneously strive to enhance customer loyalty. Customer care and ethical behaviour will probably lead the thrust in creating positive corporate reputation. As long as corporate reputation building and branding are pursued, the demand for business intelligence information related to these topics will remain a priority and will guide future marketing and communication strategies in building and protecting corporate reputation.     

Corporate responsibility or core competence?

Although the concept that corporations are responsible not only to their shareholders but also for the social and environmental impacts of their activities has now entered the mainstream, pressure is still required to ensure that companies honour their public commitments. This article describes the work of the Ecumenical Council for Corporate Responsibility in harnessing the power of individual shareholders and ethical investors in order to hold companies to account, with particular reference to the activities of Shell in Nigeria and the Republic of Ireland. It is argued that companies do not exist to carry out community development, and so should be judged not on these grounds but rather on the impact of how they conduct their core business.     

Risk,responsibility and roles redefined: is counterterrorism a corporate responsibility?

This article discusses the role of the private company in the fight against terrorism. It argues that the private company has become politically important to counterterrorism efforts, but the economic logic guiding the risk thinking of private companies is hardly compatible with the aim of providing national security. By examining whether and in what manner the risk of terrorism is considered a corporate responsibility, the article seeks to answer whether and how the political role ascribed to the company finds any resonance in the risk practice of private companies. The article approaches this question by examining how Danish food and infrastructural companies conceptualize the relationship between terrorism risks and corporate responsibility. It demonstrates that a distinction between safety and security discursively facilitates an exclusion of national security concerns from the concept of Corporate Social Responsibility (CSR) and thereby works to deresponsibilitize the company in the fight against terrorism.     

CSR and social conflict in the Brazilian extractive sector

ABSTRACT

Corporate social responsibility (CSR) is an important means to address conflicts, support local development and build trust between businesses and civil society. Yet CSR often fails to live up to its ambitions and can even exacerbate conflicts between companies and communities. In this article we consider how changing CSR strategies over the past four decades between Brazilian company Vale to Norwegian company Hydro have fomented or mitigated company–community conflicts in Northern Brazil. We find that paternalistic and philanthropic approaches of Vale over time led to deep resentment and mistrust due to underdevelopment and environmental damages. Moreover, while Hydro’s more modern CSR strategies sought to deepen community engagement and build legitimacy, the company has struggled in addressing the legacies inherited from Vale and past and current civil society grievances. The case suggests that even forward-thinking CSR approaches are vulnerable to failure where they prioritise business risk over community engagement, neglect to account for past legacies in areas of operation, and fail to create a shared vision of future development. It suggests that EI companies should both understand and engage with their social and environmental impacts in the past, present, and future and create shared economic benefits in the short and long term in order to address social conflicts.     

Support provided by corporate social responsibility programmes for the creation of universal access to ICT: a content analysis of corporate websites

ABSTRACT

This study analyses messages within corporate web pages as physical indicators of the following: the extent to which sampled companies provide information communication technology (ICT) to the South African society in terms of geographical spread; the types of ICTs they provide; the nature of their support; and the members of society targeted. Through latent coding, it seeks to deduce whether the companies realise their role in social development by focusing their corporate social responsibility programmes on societal needs and to establish whether their support is broadly aligned with government priorities.

Although the study is exploratory in nature, it reveals the following noteworthy issues: The geographical spread indicates that seven of the 11 companies analysed focus their support for ICT on the country as a whole; most companies tend to provide a whole range of technological equipment rather than one type; the provision of equipment is coupled with training; and the support for ICT is largely aimed at schools.

It is inferred that the companies realise their societal obligations; support government priorities; and are committed to social development by creating appropriate mechanisms for access to ICT.     

Size matters: the need for human-scale economic institutions for development

Current mainstream development thinking, with the exception of a few areas like microcredit, tends to favour size over substance. This article aims to challenge the belief that large-scale companies, markets, and institutions are the most effective means of ‘delivering development’. We argue that, by designing institutions to meet different needs at different scales, long-term sustainable development outcomes are more likely. Through an analysis of ‘new economics’ thinking, we look specifically at how the concept of subsidiarity could be applied to development thinking at the community and business levels, and we draw on some examples of where the concept is already manifest in practice, such as energy and commodity production.     

The role of private sector actors in post-conflict recovery

Countries need active, equitable and profitable private sectors if they are to graduate from conflict and from post-conflict aid-dependency. However, in the immediate aftermath of war, both domestic and international investment tends to be slower than might be hoped. Moreover, there are complex inter-linkages between economic development and conflict: in the worst case private sector activity may exacerbate the risks of conflict rather than alleviating them. This paper calls for a nuanced view of the many different kinds of private sector actor, including their approaches to risk, the ways that they interact and their various contributions to economic recovery. Policy-makers need to understand how different kinds of companies assess risk and opportunity. At the same time, business leaders should take a broader view of risk. Rather than focusing solely on commercial risks and external threats such as terrorism, they also need to take greater account of their own impacts on host societies. Meanwhile, all parties require a hard sense of realism. Skilful economic initiatives can support—but not replace—the political process.     

‘It’s not just the economy,stupid’. The multi-directional security effects of the private sector in post-conflict reconstruction

Using a human security lens, this article explores the interface between transnational corporations (TNCs) and post-conflict, post-crisis societies. It demonstrates how TNCs influence political and economic transition, through impacting the everyday experience of security, creating multiple and ambiguous effects on individuals and communities. Examples of two foreign corporate engagements: carmaker Fiat’s investment in Serbia and steelmaker ArcelorMittal’s takeover in Zenica in Bosnia-Herzegovina are used to illustrate the density of relationships between global companies, host governments, civil society and local communities whose effects extend beyond economics to broader aspects of the conflict space, and have a bearing on the transition and reconstruction agenda. Our findings question the quality of development and industrialisation policies championed by post-conflict reconstruction approaches, and challenge the assumption that economic growth and investment, by foreign companies in particular, will necessarily deliver peaceful transition. The article contributes to the scholarly debate about the connection between security and development, and to policy discussions about appropriate means for reviving economies within externally led peace-building and conflict prevention initiatives.     

In whose name? The accountability of corporate social responsibility

Stakeholder dialogue, participation, and partnership have become mainstream concepts in international development policy, in particular in the field of corporate social responsibility (CSR). However, the accountability of multi-stakeholder initiatives on CSR to their intended beneficiaries in the global South is increasingly questioned. This paper looks at how the agendas of some initiatives in the areas of ethical trade and sustainability reporting are driven by what Western NGOs push for, what large companies consider feasible, and what consultants and accountants seek to provide. It describes how the resulting practices and discourse restrict change and marginalise alternative approaches developed by Southern stakeholders. It is argued that enthusiasm for stakeholder dialogue, participation, and partnership in CSR matters, and beyond, needs to be reconceived with democratic principles in mind. ‘Stakeholder democracy’ is offered as a conceptual framework for this endeavour, and some recommendations are made for NGOs, companies, and governments.     

Corporate responsibility and the movement of business

The corporate social responsibility (CSR) agenda has taken off since the 1980s, with both civil society and business actors involved in mobilising around it. This paper examines the reasons for civil society mobilisation on CSR issues, the types of organisations involved, and their different forms of activism and relations with business. It then identifies the ways in which big business is engaging with and shaping the CSR agenda, but questions whether this agenda can effectively contribute to development. The paper argues that the CSR agenda can deal with some of the worst symptoms of maldevelopment, such as poor working conditions, pollution, and poor factory–community relations, but that it does not deal with the key political and economic mechanisms through which transnational companies undermine the development prospects of poor countries. A final section considers how this agenda may evolve on the basis of recent developments in CSR activism and regulation.     

Identifying and understanding African norms and values that support endogenous development in Africa

Contemporary development issues are not new. All groups of people, based on their worldviews and contexts, found ways of addressing these societal problems. By their nature, solutions were relevant, legitimate, and sustainable in their contexts. A prerequisite for effective development practice is to understand and respect the roots of African culture. There needs to be a “rootedness” to change and development. Exogenous ideas and practices of potential benefit to Africa must build from the inside out, not outside-in, as an imposition. This article illustrates how African societies have viewed and dealt with these socio-political issues from within.     

Union Carbide and James Hardie: Lessons in Politics and Power

In terms of industrial disasters, the chemical release at Bhopal and the long-term production and use of asbestos products are two of the largest and most controversial cases. Both events backfired on the companies responsible, namely Union Carbide and James Hardie (which, in Australia, largely controlled the asbestos products market). Yet in the case of Bhopal most victims have not been adequately compensated and, while compensation seems more assured for Australian asbestos victims, it has been a long and bitter battle for justice. How, in a globalised world, can we ensure that corporate negligence backfires and victims receive justice? This paper presents a framework for understanding how global corporations attempt to inhibit outrage and how to counter their tactics.     

Corporate social responsibility: A challenge for the donor community

As corporate social Responsibility (CSR) increases in large corporate organisations, a genuine approach to sustainable development is often best achieved through the supply chain. This is directly applicable to North–South supply-chain interactions (private-sector organisations, NGOs, and donors). CSR has adopted techniques from their ‘development’ usage, yet a reverse flow is not observed back to the ‘development’ sector. This is unfortunate. Private-sector organisations and NGOs (especially the larger ones) are well placed to take advantage of the increase in CSR relating to developing countries. More importantly, donors of all types would have increased influence if they took up CSR principles. Opportunity costs are not high and the advocacy potential is huge. This paper reviews CSR techniques and argues for donors to accept the challenge of incorporating them into their operations to influence more efficiently the process they seek to change.     

Corporate citizenship: Creating social capacity in developing countries

A corporation has only limited ability to create social capital through philanthropic activity, and, in the context of a decline in official aid, the corporate sector is increasingly assuming a de facto developmental role. The presence of social capital assists communities in moving towards sustainable development and may contribute to the business case for corporate–community partnerships. While it is not the role of corporations to deliver social services, their ability to enhance social capital by partnering with community organisations can contribute both to development and work to their own commercial advantage. Such partnerships, whether philanthropic or commercial, will be more effective if delivered through balanced and transparent relationships with community organisations that help to create social capacity at the local level.     

Regulating business impacts on human rights in Southeast Asia - lessons from the EU

The mid-June endorsement by the United Nations Human Rights Council of a new set of Guiding Principles for Business and Human Rights has been welcomed as the authoritative global standard for corporations to respect human rights. The Guiding Principles are the culmination of a 6-year UN-commissioned study by Professor John Ruggie, which concludes that companies should carry out human rights due diligence to identify, prevent, mitigate, and account for how they address their adverse human rights impacts. Drawing on related regulation in Europe, this article considers how best to implement the Guiding Principles in Southeast Asia.     

Towards a new model to describe the organisation–stakeholder relationship-building process: A strategic corporate communication perspective

Abstract

Successful organisations depend on stakeholder perceptions to address changes in turbulent organisational environments, report on the social and environmental impact of activities, the prevalence of public activism, globalisation, emerging issues and crises, and the need to be good corporate citizens through ethical and socially responsible behaviour. Despite the current emphasis on stakeholder relations and management, a lack of research exists on how to build these relationships. This article aims to report and discuss the findings of a study that explored the lack of organisation–stakeholder relationship (OSR) building models, to emphasise the elements and development of an OSR and highlight the need for a generic, strategic, integrated approach for sustainable OSR to contribute towards organisational effectiveness. This will be done using an exploratory literature review to constitute a conceptual framework for OSR building, of which the principles of the framework will be measured among leading Johannesburg Stock Exchange-listed South African organisations, by means of a quantitative web-based survey and qualitative one-on-one interviews. The dominant focus on organisational stakeholders has provided added impetus and importance to the role of corporate communication, hence, this article will simultaneously endeavour to highlight the importance of practising corporate communication strategically, by emphasising its role in OSR.     

Gold mining and corporate social responsibility in the Wassa West district,Ghana

Despite a boom in gold mining in Ghana's Wassa West district (WWD), unemployment and poverty have deepened, partly due to loss of farmland to surface mining but more so because of the limited opportunities for wage employment in the district's ‘revived’ gold-mining industry. However, the large-scale mining companies are implementing some alternative livelihood programmes (ALPs) as part of their corporate social-responsibility (CSR) agenda. While the ALPs have provided some employment and income-earning opportunities and skills training, the prospects for their sustainability depend on how the challenges confronting the various programmes are addressed. This will require a well-coordinated approach involving all the key stakeholders.