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November 1998 Insights Issue #28,/font>Citizenship PlcLarge international companies with sensitive reputations increasingly see corporate citizenship as a strategic key to business success. Many seek to progress beyond old-fashioned philanthropy. But will accepting this duty of care suffice to overcome the criticism and complications their operations face, especially in developing countries? Contributions to a recent Warwick Business School conference on corporate citizenship offered reasons to suggest it might. Three themes stand out among models for responsible corporate behaviour recognised within the corporate sector's own forums:
These notions overlap and most companies that adopt them agree that corporate citizenship is coming to mean all three. Albeit a contradiction in terms, strategic philanthropy hinges on the idea of discretionary grant giving to good causes. Most companies now pursuing corporate citizenship started here on their journey towards active social responsibility. In today's shareholder value climate, 'grant' cash is linked more and more to business objectives and budgets justified accordingly. Stakeholder relationship management can be another focus for strategic 'philanthropy'. Notably, providers of service utilities depend on local communities for willing custom and 'licence to operate'. Major food and beverage corporations also have strong strategic grant giving traditions but now take a more holistic view of citizenship responsibilities and social impact. Hence, for example, Diageo's efforts (justified wholly on business grounds) to urge responsible alcohol use. Research on Coca-Cola and its plants, commissioned as part of a worldwide economic impact assessment, has shown that on average 10 extra jobs are created in the economy at large for every person Coca-Cola directly employs. Many companies are increasingly drawn into the framing and delivery of policies previously seen as exclusive domains of officialdom. Examples of corporate involvement in national and international policymaking include UK and international telecoms provider British Telecom, which has focused its grant giving on employment regeneration issues. Having itself undergone much high profile 'downsizing' BT is involved in developing government employment policy and is managing its own internal Human Resources policies in a socially responsibly way. Home improvements retail chain B&Q and nature conservation advocates WWF (World Wide Fund for Nature) joined forces as leading members of the Forestry Stewardship Council, set up to fix standards for sustainable forestry and trade in tropical timber. Many companies have progressed from a strategy of discretionary community investment or 'philanthropy' seen as voluntary effort not implying direct responsibility for the issues to one of implicit acceptance of responsibility. Some businesses are now progressing beyond what might be called a 'reactive engagement', driven by actual or anticipated external pressure, towards 'proactive engagement' where shareholder value is expected to stem from taking a leadership stance on big issues. A few companies, notably oil giants BP (see box, below) and Shell, are accepting responsibility for key sustainability issues like global warming and human rights. They are also refining their business goals beyond shareholder value towards creating added value from their operations for society as a whole the famous triple bottom line. In the 1980's, like most large companies, BP was run.......... Chris Marsden T: +44 (0)1203 524158 Email: ccuclm@wbs.warwick.ac.uk See also Warwick's Corporate citizenship website at www.wbs.warwick.ac.uk/bpccu |
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