corporate citizenship
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Chapter. 4. Corporate Citizenship. The Dynamic Social Climate Implementing Corporate Citizenship Activities Corporate Citizenship in Practice Corporate Social Performance Audits. Corporate citizenship. Refers to businesses acting responsibly toward their stakeholders. Involves: - PowerPoint PPT PresentationTRANSCRIPT
Corporate CitizenshipCorporate Citizenship
The Dynamic Social Climate Implementing Corporate Citizenship Activities Corporate Citizenship in Practice Corporate Social Performance Audits
ChapterChapter
4
Corporate citizenshipCorporate citizenship
Refers to businesses acting responsibly toward their stakeholders.
Involves: proactively addressing business and society issues, building stakeholder partnerships, discovering business opportunities through social strategic
goals, and transforming a concern for financial performance into a vision
of corporate financial and social performance.
Contrast between corporate social Contrast between corporate social responsibility and corporate citizenshipresponsibility and corporate citizenship
Origin
Basis
Focus
Action
Corporate Social
Responsibility
1920s
Principles of charity and stewardship
Moral obligations to society at large
Philanthropy, trustee of the public’s interests
Figure 4.1
Corporate
Citizenship1990s
Building collaborative partnerships with stakeholder groups
Discovering business opportunities through partnerships
Managing corporate social and financial performance
Principles of corporate citizenship
Good corporate citizens strive to conduct all business dealings in an ethical manner, make a concerned effort to balance the needs of all stakeholders, while working to protect the environment.
Exhibit 4.Aa
Principles of corporate citizenship
1) Engages in fair and honest business practices in its relationship with stakeholders.
2) Sets high standards of behavior for all employees.
3) Exercises ethical oversight of the executive and board levels.
Ethical Business Behavior
Principles of corporate citizenshipPrinciples of corporate citizenship
Stakeholder Commitment
4) Strives to manage the company for the benefit of all stakeholders.
5) Initiates and engages in genuine dialogue with stakeholders.
6) Values and implements dialogue.
Exhibit 4.Ab
Principles of corporate citizenshipPrinciples of corporate citizenship
Community
7. Fosters a reciprocal relationship between the corporation and community.
8. Invests in the communities in which corporation operates.
Consumers
9. Respects the rights of consumers.
10. Offers quality products and services.
11. Provides information that is truthful and useful.
Exhibit 4.Ac
Principles of corporate citizenshipPrinciples of corporate citizenship
Employees
12. Provides a family-friendly work environment.
13. Engages in responsible human-resource management.
14. Provides an equitable reward and wage system for employees.
15. Engages in open and flexible communication with employees.
16. Invests in employee development.
Exhibit 4.Ad
Principles of corporate citizenshipPrinciples of corporate citizenship
Investors
17. Strives for a competitive return on investment.
Suppliers
18. Engages in fair trading practices with suppliers.
Environmental Commitment
19. Demonstrates a commitment to the environment.20. Demonstrates a commitment to sustainable development.
Exhibit 4.Ae
Global corporate citizenshipGlobal corporate citizenship
The process of identifying, analyzing, and responding to the company’s social, political, and economic responsibilities as defined through law and public policy, stakeholder expectations, and voluntary acts flowing from corporate values and business strategies.
The Clarkson principlesThe Clarkson principles
Principle 1
Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders and should take their interests appropriately into account in decision making and operations.
Principle 2
Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions and about the risks that they assume because of their involvement with the corporation.
Exhibit 4.Ba
The Clarkson principlesThe Clarkson principles
Principle 3
Managers should adopt processes and modes of behavior that are sensitive to the concerns and capabilities of each stakeholder constituency.
Principle 4
Managers should recognize the interdependence of efforts and rewards among stakeholders and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks and vulnerabilities.
Exhibit 4.Bb
The Clarkson principlesThe Clarkson principles
Principle 5
Managers should work cooperatively with other entities, both public and private, to insure that risks and harms arising from corporate activities are minimized and, where they cannot be avoided, appropriately compensated.
Principle 6
Managers should avoid altogether activities that might jeopardize inalienable human rights or give rise to risks that, if clearly understood, would be patently unacceptable to relevant stakeholders.
Exhibit 4.Bc
The Clarkson principlesThe Clarkson principles
Principle 7
Managers should acknowledge the potential conflicts between their own role as corporate stakeholders, and their legal and moral responsibilities for the interests of stakeholders and should address such conflicts through open communication, appropriate reporting and inventive systems, and where necessary, third-party review.
Exhibit 4.Bd
Figure 4.2
A three-stage model of corporatesocial responsiveness
STAGE Organizational
Policy Learning Commitment
Time (years)
Deg
ree
of r
espo
nsiv
enes
s to
a s
peci
fic
issu
e High
Low
• Identity problem
• Formulate policy
• Specialized learning
• Administrative learning
• Organizational changes
A model for implementing corporate A model for implementing corporate citizenship strategiescitizenship strategies
The Policy Stage
The company becomes aware of those parts of the surrounding environment, to which it needs to respond and act on.
A company’s management may think, based on sensitivity to the corporate social environment that it should respond to emerging issues, concerns, or social trends.
A model for implementing corporate A model for implementing corporate citizenship strategiescitizenship strategies
The Learning Stage
Once it has identified a social problem and adopted a general policy, the company must learn how to tackle the problem and make the new policy work.
Specialized learning
Occurs when a sociotechnical expert is employed to advise the company officers and managers.
Administrative learning
Occurs when a company’s supervisors and mangers become familiar with new routines that are necessary to cope with a social problem.
A model for implementing corporate A model for implementing corporate citizenship strategiescitizenship strategies
The Organizational Commitment Stage
When the organization institutionalizes its new social policy. When corporate citizenship becomes part of the company and its
standard operating procedures.
Framework for corporate citizenshipFramework for corporate citizenship
Concentrate action programs on limited objectives. Concentrate action programs related to the firm’s products or
services. Begin action programs close to home. Facilitate employee action.
Significant philanthropic contributionsSignificant philanthropic contributionsExhibit 4.C
Name Background 1999-2003 Given/ Pledged
(in Millions)
Bill and Melinda Gates Microsoft co-founder $22,906
Gordon and Betty Moore Intel co-founder 7,010
George Soros Investor 2,431
Eli and Edythe Broad SunAmerica founder 1,463
James and Virginia Stowers American Century founder 1,345
Michael and Susan Dell Dell Computer founder 1,215
The Walton Family Family of Wal-Mart founder 750
Ted Turner CNN founder 664
Ruth Lilly Eli Lilly heiress 560
Donald Bren Real estate 402
American corporate conscience awards, 2003American corporate conscience awards, 2003
Delta Café Positive impact—Community
Southwest Airlines Positive impact—Community
Carrefour Innovative partnership
Chiquita Brands International Innovative partnership
Westpac Banking Innovative partnership
Maina Panettoni SA8000 Responsible Workplace
Exhibit 4.D
Corporate social performance auditsCorporate social performance audits
Social performance audit
A systematic evaluation of an organization’s social and ethical performance, examining the social and ethical impact of a business against two benchmarks: a company’s own mission statement and the behavior of other organizations and social norms.
Triple bottom line
When companies report to stakeholders not just their financial results but also their environmental and social impacts. Financial, social and environmental results, taken together as an integrated whole, constitute a company’s triple bottom line.
Figure 4.3a
Summary of audit standard characteristics
Global Reporting Initiative
Origin: 1997
Focus: Link economic, environmental, and social sustainability
Self-reported benefits: 1) Internal vehicle for evaluating policy versus performance2) Structure for effective dialogue with stakeholders3) Framework for sharing and promoting dialogue with
stakeholders
Figure 4.3b
Summary of audit standard characteristics
ISO 14001Origin: 1996
Focus: Support environmental protection in balance with socioeconomic needs
Self-reported benefits: 1) Identify areas for energy reduction2) Reduce environmental risk3) Maintain compliance with legislation and regulation4) Receive environmental leadership rewards5) Prevent pollution and reduce waste6) Improve stakeholder relations7) Receive more favorable insurance rates8) Gain a competitive advantage
Figure 4.3c
Summary of audit standard characteristics
ISEA AA 1000
Origin: 1999
Focus: Quality social and ethical accounting, auditing, and reporting
Self-reported benefits: 1) Support effective stakeholder relations2) Effective in diverse global operations3) Build synergy with emerging businesses4) Link planning tools to quality models5) Build accountability in public sector6) Enhance overall performance