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.

The power of activism - Spar & La Mure, 2003

Spar, D. L., La Mure, L. T. 2003. The power of activism: assessing the impact of NGOs on global business. In California management review, vol. 45 (3): 78-101.

Key issue: Why corporations respond differently to NGOs pressure?

This exploratory study identifies three strategies that corporations can choose to respond to activism: pre-emption, capitulation, resistance. What determines this variation? First of all, a fast excursus of the history of activism is offered. Drawing a parallel between the slavery abolition movement founded in 1775 by the Pennsilvania Quaker activists and today’s pressure groups, the authors identify “the business of NGOs” (p. 79) in targeting the source of power and the possible agents of change. They remember that the shift from pressuring state actors to non-state is not something new: the American anti-British movement in 1765 organized a boycott against the old-country. So, the more corporations become powerful, the more they become the target of activism. Due to limited resources, NGOs concentrate their effort on the big brands. The main instrument they use is the threat of a financial harm. However, the cost of activism is not directly measurable and there is scattered evidence from the literature. Why then corporations respond to activism? According to a rational response model, the cost of activism should be considered as another cost of doing business, therefore evaluating potential harm and cost of response. In particular, managers evaluate: transaction costs, brand impact and competitive position. If an economic view were dominant, resistance would be the normal response in many cases, but actually many companies pre-empt activism. This could be explained looking at manager’s personal motives and beliefs, which become particularly significant in case of family businesses and strong charismatic leadership. 3 case studies follow: Unocal in Burma, Nike and Novartis.

Serie: materiali per la CSR

Nelle prossime settimane getterò le fondamenta per un archivio di materiali sulla CSR. Questo lavoro è preliminare alla mia tesi di Master e potrebbe essere utile a chi si interessa della materia. Per comodità mia sarà tutto in lingua inglese, quindi fruibile ad un pubblico molto più ampio. Il mio lavoro finale sarà un'indagine su come viene percepita e praticata la corporate social responsibility nelle piccole e medie imprese italiane, replicando uno studio del Prof. Sriramesh (Massey University, Nuova Zelanda) su Singapore. L'idea è quella di creare le basi per una Global CSR, mettendo in luce l'impatto del macro-ambiente (ordinamento politico, infrastruttura economica, cultura, sistema dei media e livello di attivismo) sulle percezioni e le strategie di CSR.

VOW / 16

Gli ultimi sviluppi del brand management: sviluppare partnership significative e creare community: Harley Davidson.

VOW / 15 - Guerrilla Marketing

Una raccolta di esempi di guerrilla marketing.

CSR, norme e cigni neri

Proviamo a ragionare attorno alla possibilità di un approccio normativo (in senso giuridico) alla CSR. La norma è una regola generale, astratta e coattiva, basata sui valori guida di un ordinamento sociale. Fatto sta, che le norme regolano soltanto una parte della nostra vita in società e sono affiancate da una serie innumerevole di regole non scritte che influenzano il comportamento. Il concetto di norma implica quindi una semplificazione, un appiattimento. Anche in statistica, la curva di Bell che rappresenta una distribuzione normale è un modo efficiente per rappresentare molti fenomeni. Qui, il 95% dei casi si concentra a ±1,96 sigma dalla media e centrare dei valori in questo intervallo è considerato un grado probabilistico accettabile. L’esperienza però ci dice che sono le code della distribuzione a fare la differenza. Sono i Black Swans (Taleb). Sono i “comici”, che stanno ai margini della società e rivestono una funzione liminale (Bachtin), ma proprio per questo le forniscono una salutare traspirazione con l’esterno. Sono gli outliers, coloro che sfidano le convenzioni. Sono le mutazioni genetiche che portano avanti il processo evolutivo. La metafora evolutiva ci aiuta a comprendere come le code della distribuzione esistono in funzione degli incentivi ambientali. Un processo regolatorio sulla responsabilità d’impresa deve quindi essere inteso non come levelling-off, ma come sistema di incentivi che proattivamente alzi l’asticella, a rischio di spingere fuori dal mercato quelle imprese che si trovano nella coda sbagliata della distribuzione e scommettendo sulla possibilità di “ingrassare” la coda più all’avanguardia. Il mandato del settore pubblico è quello di gestire le priorità, ruolo che diventa critico quando gli interessi privati collidono con quelli pubblici. È quindi perdente qualunque difesa di chi continua a produrre con un sistema datato ed eco-illogico. Sarebbe come esonerare dalla pollution charge chi possiede veicoli inquinanti sostenendo che altrimenti resterebbe a piedi. La soluzione, in questo caso, consiste invece nel fornire un cuscino di mezzi pubblici su cui atterrare morbidamente. La logica del sistema di incentivi e di cuscini è da tenere presente quando si considera se e come legiferare sulla CSR tendendo presente che l’approccio volontario ha costituito finora il limite e la forza della CSR come strumento competitivo. I problemi legati al regolamentare la CSR sono molteplici. Prima di tutto, la sovranità nazionale degli stati si scontra con la globalizzazione (rimando al post di Andrea: “Il ruolo delle istituzioni pubbliche nella CSR”). Inoltre, la responsabilità d’impresa è industry-bound o, ancora più precisamente, network-bound. È cioè strettamente specifica della rete del valore di ogni singola impresa, che ne definisce le sfide e le peculiarità. Non ha senso parlare di una CSR in generale. Imprese diverse hanno diverse responsabilità, a seconda del loro modello di business. Quindi, ad esempio, una regolamentazione sul reporting in termini di “triple bottom line” rischia di presentare delle maglie talmente larghe da far proliferare dei CSR report “vuoti” (già ce ne sono molti!); oppure c’è la possibilità che fioriscano una serie di indicazioni minuziose su ogni industria, quindi, per forza di cose, complicate, aggirabili, incomplete, e statiche rispetto all’evoluzione delle reti di imprese e dei modelli di business. Una soluzione potrebbe essere quella di far valere il diritto all’informazione (escludendo per ovvi motivi i segreti commerciali) nei confronti delle imprese. Quindi, far sì che quando un cittadino o una NGO richiede il calcolo delle emissioni di CO₂ o l’elenco dei fornitori, un’impresa sia tenuta a comunicarlo. Si tratta di entrare in una logica di trasparenza totale, in cui la persona giuridica impresa ha diritti, ma anche doveri vincolanti, che se non rispettati possono portare ad una sospensione dei diritti stessi.