CSR in Singapore - Sriramesh, Ng, Soh & Luo, 2007

Sriramesh, K., Ng, C. W., Soh, T. T., & Luo, W. (2007). Corporate Social Responsibility and Public Relations: Perceptions and Practices in Singapore. In, S. K. May, G. Cheney, & J. Roper (Eds.) The debate over Corporate Social Responsibility, New York: Oxford University Press.

Key issue: the state of the art of CSR in Singapore.

The article opens with a description of the demographic, political and economic environment of Singapore.

Then, an overview of CSR practices and perceptions in Asia and Singapore follows. CSR in Asia developed mainly due to globalization. CSR perceptions and practices are influenced by culture, religion, politics and socio-economic conditions (Bronn & Vrioni, 2001). Eraly studies of CSR in Singapore adopted the disclosure method, based on slef-reported CSR performance via reports or websites, which has limitations: social desirability, underrepresentation of smaller companies.

The definition of CSR adopted in the paper is from Bowd, Harris and Cornelissen (2003: 19): “CSR is corporations being held accountable by explicit or inferred social contract with internal and external stakeholders, obeying the laws and regulations of government and operation in an ethical manner which exceeds statutory requirements”.

Afterwards, a literature review of the CSR concept follows, divided into 3 sections:

• Business and society approach: corporations have obligations to society, business and society are in a symbiotic relationship; developed at a time of unconstrained corporate power. Several models are introduced. Carrol’s pyramid (1991). Lantos (2001) classification of CSR: ethical (minimal economic, leagla and ethical requirements), altruistic (philantropy at the expense of shareholders) and strategic (philantropy with a return).
• Economic approach: Adam Smith (1863) thoerized that the maximum social welfare is created by the maximization of private corporate profits, based on a division of labour between business and state. The market self-organizes with an “invisible hand” mechanism towards perfect allocative efficiency. According to Lantos (2001), economic CSR is defined as paying taxes and wages, rather than enslaving employees. According to Carr (1996), corporations only have to obey the law of land. Friedman (1970) asserted that “the business of business is business”.
• Stakeholder approach: many other groups then shareholders have interests in the corporation (Freeman 1984, 2001) and must be staisfied. Stakeholders are classified in primary (employees, customers, suppliers) and secondary (media, NGOs…).

The research methodology is then described: self administered web questionnaires and personal interviews.

Finally, findings are discussed in details. CSR decisions are mainly centralised. 3 profiles of corporations are found: proactive (motivated by corporate values and agenda to engage in CSR), accomodative (follow guidelines, regulations and some stakeholder feedback to implement minimum CSR), reactive (react to events on an ad-hoc basis). Evaluation of CSR activities is rarely carried out and some corporations do not even set goals.

7 stakeholders (drivers) able to influence CSR in singapore are identified:

• Government
• NGOs
• Mass media
• Corporations
• Trade associations
• Consumers
• Employees

Government and corporations rated highly on potential impact anc current activity level. This is due to Singapore’s political environment, characterized by corporatism (centralized wage bargaining involving government, unions and employers; egaliatarianism or communitarianism). The National Trade Union Congress have a symbiotic relationship with the government and developed a tripartite alliance, having a cooperative approach rather than confrontational towards employers. Alegret (1998) identifies four types of corporatism:

• Ancient guild’s corporatism
• Traditional or anti-revolutionary
• State-controlled fascist-oriented
• Technocratic or neo-corporatism

Singapore is of the technocratic type. Moreover, it is communitarian (Sriramesh & Rivera, 2006): seeking a correct balance between individual autonomy and social cohesion (Garfinkle, 2006).

The pyramid of CSR - Carrol, 1991

Carroll, A. B. 1991. "The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders." Business Horizons 34:39-48.

Key issue: a CSR model for managers that includes economic, legal, ethical and philantropic responsibilities. Stakeholder management theory is suggested as a way to reconcile economic and social claims. The stakeholder orientation is discussed through a classification of moral types of managers, highlighting the role played by the leadership in the ethical climate of corporations.

In the first part, the search of a definiton is CSR is reviewed: from early definitions to the social responsiveness movement, to Carrol’s (1979) four-part conceptualization, to the Corporate Social Performance.The CSR pyramid model is then presented:

The model entails the simultaneous fulfillment of the four CSR components.

Then, this CSR conceptualization is integrated with the stakeholder management theory. This is based on the identification, prioritization and management of those groups that have a claim on the business. The criteria suggested to rank stakeholders are legitimacy (justifiable right to make a claim) and power (ability to influence). Stakeholder/responsibility analysis is suggested as a way to map a company’s CSR strategy.

Finally, the three major ethical approaches to business (Carrol, 1987) are described and linked to main stakeholders:

• Immoral management
• Amoral management (intentional/unintentioanl)
• Moral management

Global rules and private actors - Scherer, Palazzo, Baumann, 2006

Scherer, A. G., Palazzo, G., Baumann, D. 2006. Global rules and private actors: toward a new role of the transnational corporation in global governance. Business ethics quarterly, vol. 16 (4): 505-532.

Key issue: the role of transational corporations in developing a framework for global governance.

First, the problems arising from globalization are described. The economic activities work within a legal framework defined by the state. The role of the modern state is to define citizenship rights: civil rights, political participation rights and social rights (Matten & Crane, 2005). In a globalized world, global governance (“rule-making and rule-implementation on a global scale) cannot be managed by the state alone. Today, transnational companies and civil society groups participate in setting global governance, indicating a shift from a state-centric model to a multilateral, non-territorial model of regulation participated by private actors (Braithwhaite & Drahos, 2000). NGOs pressure corporations outside national boarders, corporations reacts with soft law and self regulation: they do not subsititute governments, but they do engage in political action.

Then, the limits of the economic and managerial approach to CSR are described. The traditional economic paradigm is based on a division of labour between state and business which does not hold any more. In this view, free trade is the only way to development and democratization and CSR is distracting business from its real aim: create profits. Profit-seeking operates within the legal and ethical customs of society, and its maximization increase the public wealth. The state regulates in case of market failures (externalities, public goods…). The managerial approach, represented by the stakeholder appraoch (Freeman, 1984), the “business and society” field (Berman at al., 1999; Cocharn & Wood, 1984) and the “corporate social responsibility” of Whetten, Rands & Godfrey, 2002:384), aims at linking CSR to its business contribution.

Then, the political activity of the corporation is addressed, looking at the new theories of corporate citizenship, republican business ethics and Habermasian theory of democracy. Matten and Crane (2005) define corporate citizenship as “the role of the corporation in administering citizenship rights for individuals”: the firm has a “catalyst function” for citizenship rights and it is part of the public sphere domain. The corporation assumes a state-like role when the state withdraws, has not yet implemented basic citizenship rights or is unable to do so.

Republican business ethics may help to solve this question: in this view ethics has a “supplementing function” to positive law (Steinmann and Löhr, 1996; Steinmann and Scherer, 2000). According to the republican political model, the citizen has a double role of private citizen (“bourgeois”) and citizen of a state or community (“citoyen”). In this second role, corporate citizens, help desing public rules and keep stability. Public interest is the oucome of a communication process that takes place in a domain of free opinion and will formation defined by citizens. In the liberal conception, politics is based on power.

Finally, the issue of legitimacy is discussed. Corporations are legal persons and have political participation rights. However, if private actors become political actors, the issue of legitimization arises, since they are not subject to democratic elections: who controls them? Friedman (1962:134; 1970:220) noticed that is managers take political decisions for citizens, they should selceted and controlled by citizens. The deliberative model of democracy of Habermas (1996, 1998, 2001) proposes a de-centred concept of democratic governance. The legitimacy of corporations depends on the political embeddedness of CSR (Fung, 2003): their participation in an open discourse, transparency, monitoring, third parties involvement, control. A good example is the Forest Stewardship Council.

The last part describes the role played by corporations in the development of global labour standards.

Why we boycott - Klein, Smith, John, 2004

Klein, J. G., Smith N. C. & John, A. 2004 .Why we boycott: consumer motivations for boycott participation. Journal of Marketing. Vol. 68 (July): 92-109.

Key issue: motivations to boycott - a cost and benefit approach derived from the literature about helping.

Boycott is framed as a form of political consumption. A trend is identified in the history of boycotts: from broader socio-political goals such as civil rights to focus on corporate practice.

A decision-making model about boycotts is derived from helping literature. A trigger event (perceived egregious corporate behavior) gives a negative arousal. Then, a cost and benefit analysis of the consequences of engaging in the boycott is carried out by the consumer.

The factors predicting boycott participation are:

• desire to make a difference
• scope for self-enhancement
• counterarguments that inhibit boycotting
• cost to the boycotter of constrained consumption.

Boycotts are found to hurt brand image.

The path to good citizenship - Zadek, 2004

Zadek, S. 2004. The path to corporate responsibility, Harvard Business Review, 82 (December): 125-132.

Key issue: the evolution of corporation’s approach to CSR (organizational learning) and the path to issue maturity (societal learning).

The author identifies 5 steps of organizational learining:

• Defensive (deny practices, outcomes or responsibilities)
• Compliance (adopt a policy-based compliance appraoch as a cost of doing business)
• Managerial (embed societal issues in their core management processes)
• Strategic (integrate societal issues in their core business strategy)
• Civil (promote braod participation in CSR)

Societal learning: issue maturity model, developed by the pharmaceutical company Novo Nordisk:

• Latent
• Emerging
• Consolidating
• Institutionalised

Finally, the history of Nike approach to CSR is analysed, focusing on how the incentives based on cutting costs given to the purchasing department conflicted with the company’s labour standard code

CSR and sensemaking - Basu & Palazzo, 2008

Basu, K., Palazzo, G. 2008. Corporate social responsibility: a process model of sensemaking. The Academy of Management review, vol. 33 (1): 122-136.

Key issue: the traditional analytical apporaches to CSR are based on the CSR strategy itself. A model to understand managerial sensemaking is proposed, in the claim that mental models dirive behavior.

The academic literature on CSR is classified into 3 main streams:

• Stakeholder driven (reactive)
• Performance driven (CSR-profitability link)
• Motivation driven (why to engage in CRS)

The authors claim that CSR does not result from external demands, but from organizationally embedded cognitive and linguistic processes: sensemeking, defined as the cognitive maps of the environment.

3 levels are analysed:

1. Cognitive (what firms think): these are the shared perceptions of what the organization is

• Identity orientation: individualistic, relational, collectivistic;
• Legitimacy: pragmatic (the environment can be controlled), cognitive (the environment controls the firm), moral (co-creating acceptable norms with stakeholders)

2. Linguistic (what firms say):

• Justification: legal, scientific, economic, ethical/cosmopolitan;
• Transparency: balanced, biased.

3. Conative (what firms do):

• Posture (responsiveness to expectations, demands and critics): defensive, tentative, open;
• Consistency: strategy, internal;
• Commitment (leadership role, depth, span): instrumental (external incentives), normative (internal/moral).

CSR and competitive advantage - Porter & Kramer, 2006

Porter, M. E., Kramer, M. R. 2006. Strategy and society: the link between corporate social responsibility and competitive advantage. Harvard business review, vol. 84 (12): 78-92.

Key issue: Traditional approaches to CSR consider business and society to be in opposition. Rather, they are in symbiosis. Understanding this, allow corporations to engage in strategic CSR that creates a competitive advantage.

In the last decades a superficial approach to CSR developed, based on glossy reports, unclear rankings and “cosmetic” PR actions.

Traditionally, four justifications for CSR were supported:

• Moral obligation
• Sustainability
• License to operate
• Reputation

All these arguments focus on a business vs. society tension. Actually, if firms don’t’ want to loose many opportunities must realise that business and society are in symbiosis.

The links between business and society must be evaluated:

• Inside-out links – impact of business on society
• Outside-in links – impact of society on business.

The competitive context can be divided into 4 areas:

• Quantity and quality of business inputs
• Rules and incentives for competition
• Local demand
• Supporting industries

Then, social issues must be analysed and prioritized:

• Generic
• Value-chain
• Social dimensions of competitive context.

The article concludes suggesting an affirmative corporate social agenda based on looking beyond expectations for opportunities to achieve social and economic benefit symultaneously. Companies must move from responsive CSR (being a good citizen and mitigating or anticipating adverse business effects) to strategic CSR (choose a unique position to gain competitive advantage). Ultimately, the debate should shift from CSR to Corporate Social Integration.

Globalization and CSR - Scherer & Palazzo, 2008

Scherer, A. G. & Palazzo, G. 2008. Globalization and CSR. In: Crane, A. McWilliams, D., Moon J. & Siegel D. (eds), The Oxford Handbook of Corporate Social Responsibility. Oxford: Oxford University Press.

Key issue: Globalization weakens the nation state and causes the rise of global problems. The political solutions are not limited to the traditional institutional actors, but include also non-state actors, such as NGOs and corporations.

The article’s introduction opens with the observation that globalization intensifies the impact of corporation and the consequent call for CSR. But corporations themselves can become a solution to global problems. Globalization poses an additional responsibility to corporations: the need to make a political move to contribute to the development of the fragile and incomplete global governance framework.

The first part reviews the key aspects of globalization, defined as “the process of intensification of cross-area and cross-border social relations between actors from very distant locations, and of growing transnational interdependence of economic and social activities”. One of the main consequences of globalization is the loss of political steering capacity of the nation state (bound to its boarders) to face transnational actors and problems: new forms of governance from below, above and beyond the nation state are born.

Then, the dimensions of globalization are investigated:

• Political: GATT (later WTO), privatizations, collapse of the communist iron curtain;
• Technological: ICT, transports;
• Socio-cultural: new values, migrations, heterogeneity, new social movements, civil society and NGOs;
• Economic: growth in FDI, international trade and intra-firm trade, global supply chains, power of MNEs (huge resources + mobility), pressure for profits from the global financial market;
• Transnational risk (Beck 1992, 1999): environment, diseases, social problems.

In the third part, the traditional CSR paradigm and its limits in the light of globalization are described. The traditional CSR approach is based on a neoclassical assumption of division of labour between state (political sphere) and business (economic sphere). The corporation as a private actor has no license to interfere in political processes and must concentrate on profit seeking (Friedman, 1962). The ongoing debate about the CSR-profitability link is rooted in this view. The only responsibility of corporations is to follow the established framwork of game rules: law and moral customs. In this view, the firm is reactive to external expectations. In the liberal model of democracy, corporations are private and non-political actors: they deal with politics in case of self-interested lobbying or for voluntary and discretioanry acts of philatropy (Carrol, 1979) and they are not held accountable by the polity. On the contrary, the state is accountable for polity and gains legitimacy by maximizing freedom and minizing regulation and by elections. Private actors play in the democratic fields of markets and the “inivisible hand” drives their self-interested behavior towards social welfare.

The global changes lead to the birth of post-national constellations (Habermas, 2001). In the liberal democracy, solidarity (people), power (state) and money (corporations) are the pillars of stability. The weakening of national hard law effectiveness creates are race to the bottom and a regulatory vacuum. International law was developed to be applied between states, not directly to non-state actors. International conventions (UN Human Rights and ILO) cannot be enforced. The US courts started to apply their law outside the national boarders (Foreign Corrupt Act, Alien Tort Claim Act, Sarbanes-Oxley Act), but this weakens other national governments. In this situation, the vacuum left by national governments is partly filled by civli society (“globalization from below”, Beck, 2000: 68). The new CSR paradigm sees corporations to take steps to become political actors too. They contribute to global governance (definition and implementation of standards of behavior with global reach – Habermas, 2001), having an elarged sense of responsibility and cooperating with states and civil society to solve political problems. Moreover, they submit their power to democratic processes of control and legitimacy and they participate to “cosmopolitan” or “high-order” debate (Teegen, Doh, Vachani, 2004: 471).

From CSR to brand integrity - McIntosh, 2007

McIntosh M. 2007. Progressing from Corporate Social Responsibility to brand integrity. In May S., Cheney G., Roper J., 2007, The debate over Corporate Social Responsibility, Oxford: Oxford University Press, 45-56.

Key issue: brand integrity. As the relational device liking a corporation to its customers, the brand becomes the unit of analysis for social repsonsibility.

A review of the milestones in the last decade of CSR history opens the article: Brent Spar and Ogoni land (killing of Ken Saro-Wiwa) scandals involving Shell, the Global Reporting Initiative, SA8000, AccountAbility, Global Compact...

A change in perspective in the CSR agenda is then invoked by the author. Social responsibility cannot be limited to the juridical boarders of the corporation legally owning the brand. A link is made between the integrity of decision makers and consumers and the integrity of the corporation via the brand integrity. Brands, in facts, are more democratic than corporations, since are ubiquitous and owned by all of us. Complexity, system thinking and social network appraoched must be introduced in the CSR debate agenda.

The context of CSR today is described as the development of voluntary schemes based on a “new social partnership” (Zadek-Nelson, 2000) in multistakeholder dialogues.

The “holy graal” of CSR, its link with profitability is then discusses critically. McIntosh reminds that it is business to be at service of society and not vice versa. The benefits of CSR are the society-wise and not only for business. Some studies confirming the CSR-profitability link are quoted: McIntosh, 1998, Journal of Corporate Citizenship; King (KPMG), 2001, Journal of Corporate Citizenship; SustainAbility & UN Environment Program, 2005, Buried treasure; Dow Jones Sustainability Index (2005); World Economic Forum (2005); Fussler, 2004.

The characteristics of the proactive CSR corporation are identified:

• Is part of a sectors targeted by activism
• Has values-led leadership
• Engage stakeholders
• Takes part in the dialogue about voluntary and regulatory CSR initiatives

However, the way for CSR is still long: the Association of Certied Chartered Accountants found that in 2004 there were only 1500-2000 companies producing sustainability reports; in the same year, the US conference board found that CSR is not in the agenda of CEOs.

The corporate citizens are segmented into four groups:

1. CSR proactives (global)
2. Partly proactive (law-abiding but proactive on some CSR aspects)
3. SMEs (struggling to comply with law and establish good local relationships)
4. Informal/illegal sectors (not incorporated, avoid to pay taxes)

The origin of the CSR problems is traced back to october 1856, with the birth of the corporate personhood, a ”monster” with unlimited mortality and expansion. The boardroom members do nol lack of ethical frameworks, but the separation fo ownership and management lead to the adoption of finance as the leanguage of the boardroom.

Finally, the issue of integrity is discussed. Three definitions taken from Oxford English Dictionary are provided: 1) the quality of being honest and morally upright; 2) state of being whole and unified; 3) soundness of construction. Surviving corporations in CSR have a range of complex non-business relationship based on trust and love. Corporations are self-organising systems that interface with public policy objectives for sustainable business. The challenges of holding corporations accountable are the blurry boudaries (which complicate data collection) and the combination of science outcomes and multistakeholder engagement which creates uncertainty due to multiple values involved.

The new business therefore has to be a human-scale corporation that serves society, not vice-versa. This is based on three consitions

1. A small ecological footprint;
2. Enhanced social equity;
3. Extended sense of futurity.

The human-scale corporation has long term (limited) life, appropriate size and a balance of power among stakeholders.

Reinventing brand integrity means evaluating the social and ecological footprint of brands, rather than corporations, considering issues such as global supply chains. They create value through values, as exemplified by the theories of Lovemarks (Roberts, 2004) and Corporate Religion (Kunde, 1978). Brands are ubiquitous and are owned by stakeholders, which are more informed and connected thanks to ICT. Corporations now have learned that misbehavior affects brand equity. The new CSR paradigm involves shifting emphasis from the corporation to society as a whole.