Corporate Global Citizenship

Those of you who are interested in the social responsibilities of companies may wish to read this article on corporate engagement in society by Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, which appeared in the January/February 2008 issue of Foreign Affairs. His purpose is to clarify the definitions of different types of corporate engagement in society – corporate governance, corporate social responsibility, corporate social entrepreneurship, corporate charity, and corporate global citizenship. A key point: that the sustainability and effectiveness of any corporate engagement is best if it is aligned with the company’s business model and profit motive.


10 Responses to “Corporate Global Citizenship”

  1. 1 Vicko Cheung Chun Sheung 26/11/2009 at 1:21 pm

    Undoubtedly, business is profit driven.
    The phenomenon that more and more business enterprises have started paying attention to corporate social responsibility (CSR) is to meet the higher ethical standard as set by the consumers. Therefore, we could see the growing power of the consumers in influencing the sustainability of CSR in the world.

    CSR is always mutual benefitial to both the society and business that we could draw
    money from the pockets of the business to contribute to a better development of the society. I do agree that companies should engage with their stakeholders together with themselves as stakeholders alongside the governments and civil society, which would definitely for driving success for the sustainability of promoting CSR in long term. Comparatively, the Western countries, e.g. United Kingdom, is doing much better than the case in Asian countries, e.g. Hong Kong, regarding the funding available for promoting and supporting CSR development. In 2006, the former had 60 funding while the later had only 2. As a result, we could see a huge gap between them.

    International enterprises have significant impact on the development of CSR attributed to their huge pools of capital and talents. Global warming has been an apparent alarming towards human to protect our environment. We could not stop the business manufacturing; but we should minimize the harm we bring to the world. After taking enormous profits from our globe, the international business could not escape from fulfilling their responsibility to contribute back to the globe.

  2. 2 Senia Ng 29/11/2009 at 7:00 pm

    I have always had a question in mind: How do you view companies doing CSR for the sake of marketing?

    On the one hand, I recognize that irrespective of their intention, they are still doing something good for the society.

    On the other hand, I doubt whether this is the way forward. If it were all a matter of marketing, then the consequences might be worse. General public may believe that they are really socially responsible companies, and support their business. But the companies may only contribute little in this area. E.g. have you ever thought of how Apple sells its RED concept? That if you buy RED macs/ipods they’ll ensure you that these products are produced humanely, and the proceeds will somehow be for the benefit of the people in need.
    BUT! What about the purple the green the orange ipods, the white macs, the black iphones??
    Are they not hypocrites in this sense?

    And people actually think they’re good companies and support them…….

    I think CSR is not just about how we act. More importantly it’s about how we THINK. But how many people/companies realize this….

  3. 3 Julian Leung (Toshi) 02/12/2009 at 3:11 am

    As a cynic at heart, and being a fan of the BBC miniseries “The State of Play” (Highly recommended! if you liked the Hollywood interpretation, you’ll love the original.) which touches on CSR, I can’t help but remain skeptical of the reasons behind CSR. Yes, of course companies may claim it enhances their “corporate image” and can be used as an effective PR tool, or even better, assuage some the short lived guilt as they rake in the billions in revenue. Admittedly CSR has contributed to some good, it hardly negates the social costs corporations impose on the communities they operate in, no matter how hard they try to rationalise they’re activities. Although, I’ll be the last person to turn to TV drama’s for insights, the writers of “The State of Play” echoed one of the prime criticisms of CSR. CSR simply serves to distract the public and government from introducing and enforcing regulations on questionable corporate practice. The Achilles’ Heel of CSR is that it’s purely voluntary and often not the industry standard. Between enforcing stricter governmental regulation and CSR, its a no brainer.

  4. 4 Wong Shuk Ting 03/12/2009 at 11:19 am

    I would like to share wiht you a news that I’ve read which demonstrate how difficult to monitor the action of a company who claims itself to be socially responsible.

    In Oct 2007, a Chinese media made a report on water waste of Starbucks stores in Shanghai. It is found that water was wasted by allowing tap water to flow continuously. The 50 stores in the city could cause a waste up to 60 tons of water each day.

    To response, SH Headquater Starbucks says that the constant water flow in the Starbucks’ stores is for washing the food utensils now that the flowing water can prevent the growth of microorganism and bacteria.

    When asked to disclose how much water flows through each day or how much water Starbucks stores use every day. Starbucks refused to do so.

    So, how does “reponsilibity” mean? does it mean to pulish a long annual report on community care, social impact, environomental care, etc.? does it mean to launch a million-worth campaign or advistising on tell the public how much you care for them?

    We need a corporate who has a genuius sense of repsonsibility who will be accountable to the public and willing to show its transparency. Or else, all are spending billion dollars on talking empty words.

  5. 5 Wong Ching Hung 06/12/2009 at 6:02 pm

    After reading some comments I can see that there are a lot of people who hold a more cynical attitude towards the company’s claims on corporate social responsibility.

    It is generally agreed that by adhering to this popular concept, companies can gain credits on their images in which they care not only the interests of themselves, their stakeholders, but also the the community in a whole. It can then be seen as a marketing strategy rather than a wholehearted effort to help the world.

    To me however, it is a win-win strategy to all of us. On the one hand, companies can gain their images, which are crucial for them to find more investors and customers. On the other hand, no matter how small the CSR projects are, they can definitely bring some good to our society. The impacts and benefits that come along with the programs can also be an indicator for other companies, showing that CSR has indeed, become an important concept in the world. From this, it can definitely encourage more parties taking part.

    Also, there are a lot of organizations in the society that assess those CSR projects of companies and give reports on them critically. I have attended a talk held by the Association for Sustainable and Responsible Investment in Asia. The official of it said they have been doing researches on CSR, providing suggestions to companies on how to become more responsible, and enhancing communication between companies on achieving CSR. Therefore, to me, I would not be too cynical on their intentions on carrying out CSR. After all, we are not stupid and we will just wait and see the effects of the programs.

  6. 6 Kevin Chu 06/12/2009 at 11:24 pm

    The writer (Klaus Schwab) initiates a discussion on the theoretical foundation of Corporate Social Responsibility (CSR). He suggests that companies should engage with stakeholders and be stakeholders themselves alongside government and civil society. Indeed, the concept of stakeholders approach, as opposed to shareholders approach, was first suggested by Edward Freeman in 1984. He proposed that corporations should not simply take care of the interest of shareholders. Instead, a whole range of stakeholders should have a legitimate interest in the corporation as well. The stakeholders approach comprises various actors including the Government, customers and the civil society as a whole.

    Also, the writer rightly points out that it is in the interest of the corporations to address global challenges and commit to sustainable development. I think corporations, by making positive contributions to society, could create a safer, better educated and more equitable community. It subsequently benefits the corporation by establishing an improved and stable context to continue with the business. For instance, a software company provides its software to schools or libraries for free. This will not only give students and local communities access to a scarce resource but in the long term will enhance computer literacy in society with long-term beneficial effects for the future market opportunities of the company itself, as well as for its competitors and other players in the industrial cluster.

    I understand Senia’s worry (in previous post) that there might be detrimental effects if we do not distinguish between the intentions of the companies. Many companies assume their so-called ‘Corporate Social Responsibility’ only because there is greater visibility and criticism of corporate practices, particularly by NGOs. Those corporations regard it as reputation risk if they are spot by the media and being covered by negative exposure which probably tarnishes the image of the corporation. They only fear that they might be ‘penalized’ by customers for actions that are not considered as socially responsible.

    However, I am rather optimistic in the concept of CSR as it might take some time for a transition of norm from corporate philanthropy to corporate social entrepreneurship. It has to be noted that the plethora and heterogeneity of actors in the CSR world add dynamics to the concept of CSR. It is an evolving concept and we should facilitate its development.

    Freeman, R. Edward (1984). Strategic Management: A stakeholder approach. (Boston: Pitman)

  7. 7 Andy Yu Kar Ming 07/12/2009 at 1:53 am

    Corporate responsibility is something praiseworthy that those enterprises which are willing to commit to should be encouraged. Nowadays, not a single sector, not even the state or any civil society, can possibly solve problems given the globalization. It is for this reason that there have been calling for more partnership or collaboration among the three sectors when dealing with public policy issue. From the perspective of the state or the civil societies, partnering with the private sector can certainly help them to solve the funding problem as they, as a profit-oriented organization, should have the most adequate financial resources to spare. On the other hand, corporate, in going into such mutually beneficial agreements with the other two sectors, would gain much social recognition, attracting more consumers in the field. As mentioned in the article, this kind of corporate concept is inevitably vital as people in this contemporary world talk about more and more humanity-related issues such as climate change, human security and poverty in addition to economics. However, the suggestion of the term “global corporate citizenship” by the author has implied the ill-effects drawn up from the concept of corporate responsibility. Added to the recommendation that corporate should engage itself with the civil society and government in addition to their stakeholders, I believe that corporate should engage with these sectors in a sincere way. It is known that given the motivation to boost their reputation in the respective field, corporate simply take advantage from their partners by ways of shirking their responsibility or not even contributing. After all, these kinds of new arrangements in the society are not mandatory in legal sense unless the parties have signed legally enforceable contracts. Though whenever we talk about private sector, the impression is that they are more profit-oriented and prioritize their corporate interest higher than any other goals, there are successful examples. IKEA and UNICEF have been cooperated for long, with the former contributing much desk and other studying materials to UNICEF-targeted children in impoverished areas. IKEA has also drawn up plans to donate funding sustainably, by promising to donate $1 whenever they sold a particular commodity in their shop in certain period. This not only provides UNICEF sustainable financial sources, they can also educate and involve the public as the consumers of IKEA can also play a part when they buy. Therefore, with a sincere and truthful intention to engage, it is not impossible for the private sectors to show their genuine corporate responsibility.

  8. 8 Lam Ka Po 08/12/2009 at 10:22 pm

    I would like to share with you a peice of news: About 100 German McDonald’s restaurants expect to change the traditional red backdrop used behind their Golden Arches to a deep hunter green “to promote a more eco-friendly image in Europe” . It is believed that it is a move to react to previous accusation from green groups criticizing McDonald as not preserving the environment. While it is not clear to what extend McDonald would really employ some policy and be more eco-conscious, we can definitly see there is a great potential for these transnational corporations to contribute to environmental preservation.

    McDonald, which have over 32,000 outlets around the world and a diverse ntework of supply chains, have a tremendous influence that may even surpass the power of a nation-state. Just like wht Klaus Schwab in his article has suggested, in this new era, the influence of corporations on communities, on the lives of citizens and on the environment has sharply increased. If they start to engage in greener practices, the contribution to the environment would be far more significant than states or individuals. Therefore it is important for private sectors to invovle in the green campaigns.

    Nowadays no corporations or individuals dare to say, at least in public, they do not care about the environment, but whether it is only a show or they really understand the urgency of the problem is another matter. What we can do, as individuals, is put survellience on the corporations and report constantly what green practices they have actualy carried out. As the power of social media is growing, those large corporations would not risk their reputation being ruined and would at least do something to be environmental-friendly.

    Paula Mon2-3pm

  9. 9 Kaspar Tjeldflaat Steudel 12/12/2009 at 12:13 am

    I seriously doubt that the motives behind the CSR is as driven by good intentions as it has been claimed by some in this blog. In my view is this merly a new tool for large coorporations to legitimaze themselves in areas where they conduct shady buisness.

    I think one of the clearest points are oil companies that funds cliamte research, but are in the bottomline one of the root causes to to the essential problem. I can the just mention the hypocritical advertising campaigns to the petroleum giant BP, where it promotes the environmental aspects of its operations.

    Alot of the places where CSR is deployed are countries with little labor protections, and thus their citizens are at a higher risk of exploitation by multinational corporations.

    It has allready been mentioned McDonald’s attempt to distract the public from ethical questions posed by their core operations by raising their reputation with the public or with government.
    I think its funny that a coorporation as Mc Donalds that to high degree engadges in CSR, has at the same time been ruled that their employes worldwide do badly in terms of pay and conditions in the Mc Libel case in England. McDonalds try to justify its very poor worker treetment by showing that they give something back, is just proposterous In my view its completley false to state that in the case of CSR everybody wins, because in some cases it is aleast to me very obvious that everbody doesn’t

  1. 1 Tweets that mention Corporate Global Citizenship « POLI0078 Humanity in Globalization -- Trackback on 25/11/2009 at 2:39 am

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