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Making business work for development: Rethinking corporate social responsibility
| Guest post by: id 21 |
Article Overview: Business is everywhere. Some is crucial to development, while some is implicated in poverty, human rights abuses and environmental destruction. In recent years there has been an upturn in corporations taking responsibility for development challenges. Research shows this is a mixed blessing whilst development practitioners and policy makers could engage more critically to ensure real benefits for development.
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Free Download - Sustained growth with equity is needed to halve poverty in Africa By id 21 |
Making business work for development: Rethinking corporate social responsibility
Business is everywhere. Some is crucial to development, while some is implicated in poverty, human rights abuses and environmental destruction. In recent years there has been an upturn in corporations taking responsibility for development challenges. Research shows this is a mixed blessing whilst development practitioners and policy makers could engage more critically to ensure real benefits for development.
Most codes are developed by industrialised nations: how appropriate are they to local conditions and concerns in developing countries?
Given the power of corporations today it is time to look afresh at the role of business in society. Not only has the number of 'transnational corporations' (TNCs) risen ten-fold since 1970 but their turnovers dwarf that of many national economies. Their ability to escape state regulation or even dictate that regulation, has given rise to growing concerns about TNC accountability. Their involvement with the basic building blocks of development, however, such as food, shelter, medicines and infrastructure, raises questions about how TNCs might contribute to achieving the Millennium Development Goals.
Corporate social responsibility (CSR) is often used to describe this broader view of business-society relations. CSR refers to company policies and activities that affect society and which are not mandated by law, but nevertheless may arise from existing laws, or favour new ones. They are not necessarily voluntary, as they may be mandatory through other channels and nor are they necessarily voluntarist, as they may, however rarely, call for state intervention.
Mainstream CSR relates to issues such as occupational health and safety, labour, human rights, anti-corruption, environmental management systems, or company support for community development projects. The CSR tool box includes codes of conduct, reputation management, social and environmental reporting, stakeholder dialogues, and public-private partnerships.
Since its revival in the 1990s, the concept of CSR has grown. The 2002 World Summit on Sustainable Development in Johannesburg marked CSR's arrival on the international policy agenda. CSR successes include the 24 million hectares of forest certified under the voluntary Forest Stewardship Council (FSC). Yet, given that 84 percent of FSC-endorsed forests are in industrialised countries, where large companies find it easier to meet certification requirements, the initiative has done little to tackle tropical deforestation. And of the 65,000 TNCs worldwide, only around 4,000 produce reports on their social or environmental performance. It is the companies with high-profile brands, or those which supply to companies with high-profile brands that are affected by public concern. CSR does not cover, and nor can it, every important issue, every company or every region: enforcement is in the hands of markets and public pressure.
Research on HIV/AIDS shows that companies are responsible for the impact of the disease, if for example, they provide unhelpful working conditions, or discriminate against employees infected with the virus, or if they hold patents on important drugs. Jessica Owens writes that work by the International Labour Organization (ILO) has found HIV/AIDS is having a negative impact on business, with some companies beginning to respond proactively. However, individual workplace programmes are not enough to address the spread of HIV/AIDS; nor can they manage the financial risk facing companies. The key issue is how companies influence the frameworks within which governments, communities and families can act to protect themselves.
As CSR standards become more widespread, their legitimacy has been questioned. Most codes and systems to monitor compliance are developed by industrialised nations: how appropriate are they to local conditions and concerns in developing countries? Given that standards are a mechanism for managing value chains and for influencing the social impact of an economic activity, might they become a new form of protectionism?
In addressing this issue, the accountability of codes and monitoring to workers and communities is key. Research by Marina Prieto-Carrón in Central America illustrates that gender issues are often ignored by voluntary codes concerning workplace practices and that participatory methods of implementation and compliance monitoring are necessary. Clearly such approaches need to be coordinated and promoted.
Making CSR more inclusive and relevant to workers and local communities is vital for individual factories and plantations and for countries and regions. Studies on CSR in developing countries are rare; if they do exist, they often adopt western concepts of what CSR is and what it isn't. CSR has to be indigenous rather than imported, argues Ritu Kumar in her article on South Asia.
Donors need to resist adopting a simplistic view that simply working with TNCs will benefit poor people
CSR is also criticised for deflecting organisations from the real issues: given that NGOs, companies and governments are increasing their concentration on CSR, some suggest that better obligatory regulation of corporate practice, nationally and internationally, regarding social, environmental and human rights issues is not needed. NGOs have thus started to move towards a 'corporate accountability' agenda, focusing on how to strengthen people's power in relation to corporations. Research by Peter Utting at the UN Research Institute for Social Development shows how governments need to collaborate internationally to develop better mechanisms for holding corporations accountable to citizens.
This debate is mostly about how to make business less harmful. There is another dimension, however: how can business contribute to development? Michael Warner and Rory Sullivan note how the World Bank has promoted partnerships with companies on specific development-related projects, getting mining companies, for example, to promote regional development.
More recently, companies have started to do business with people living on less than two dollars a day, explains Bruce Jenks from the UN Development Programme. Does this mean big business may be the key to overcoming poverty? Case studies of small scale construction in Mexico, salt iodization in India, and microfinance worldwide offer evidence that the private sector can play a useful role.
However, problems with this approach arise on closer inspection of who is served, with what, and by whom.
Firstly, much of the profitable business with lower-income markets involves products such as cell phones rather than the provision of basic nutrition, sanitation, education and shelter.
Secondly, what type of development is being promoted by strategies such as marketing consumer products to poor people? Claims about empowering people simply by enabling them to consume certain products can not be taken at face value.
Thirdly, the environmental impacts of changing consumption patterns need examining rather than assuming that such problems can be solved through technical and financial advancement.
Finally, if more foreign companies serve poor people might this displace local businesses and increase the drain of resources from local economies?
How large firms might use their financial, technical and management resources to help local entrepreneurs improve and scale up their businesses and avoid exploitative local middlemen, needs exploring. However, exploitative North-South supply chains, tax avoidance, and anti-competitive practices are fairly typical of TNCs which undermine their economic contribution to development. Donors need to resist adopting the view that simply working with TNCs will benefit poor people.
Such economic issues have been largely overlooked by the mainstream CSR agenda. The revenue implications, for employees and for governments, of non-payment of taxes, transfer pricing, or intra-corporate financial flows, for example, amount to billions of dollars of lost earnings. Corporate taxation should be central to the debate, argues Manuel Riesco, in his article on mining in Chile. Unless CSR begins to deal with responsible financial practice, it will continue to be seen as a diversionary tactic with limited benefits for development. So what can be done?
Development practitioners must now engage CSR on their own terms and map out an agenda that addresses corporate responsibility for 'bad' development on one hand and corporate opportunities for sustainable development on the other.
CSR must distance itself from neo-liberal economic assumptions of development and how to attain it. Governments are crucial for ensuring civil and political rights that allow public pressure to influence firms and provide education and infrastructure for them to do business with poor people.
If CSR holds promise for development it must address how companies can support, rather than undermine, governments in performing these roles.
Jem Bendell
2 Ash Vale
Lifton
Devon
UK
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Re: Do Your Prospects / Customers Trust You?
- Thanks Ryann, that does make a lot of sense.
I guess it's the "how to" behind the companies' vision and mission statement.
Maple Leaf Foods come into my mind, on the way they handled their Listeria outbreak incident.
The swiftness and diligence in their investigation and subsequent recall demonstrated a high standard of corporate social responsibility, even when it means admitting some fault on their part.
I think in the end it comes down to operating in a way that customers believe you're not just after economic benefits, and that builds trust!
Re: What works for you?
- Hi,
There is an old saying and it goes something like ‘if you love what you do then you never work a day in your life’ and I firmly believe that.
When I was fifteen years old I took a temporary job as a whitesmith which meant I had to select different lengths and pieces of iron and cut them, grind them, drill and finish them off and I used to get all my days work in the morning and worked until finishing time and I loved it.
Why you might ask, this was a temporary job and a stepping stone for me but I was doing a job I enjoyed, I had responsibility without a boss breathing down my neck but at the end of the day I had made several important pieces of machinery that were all my own work.
Before I was sixteen I changed to my chosen profession which was an electrical engineer and moved thru the ranks until I became a manager with all the pressure and responsibility that can bring so I was unable to ‘enjoy’ the work and eventually left to pursue my own business.
I suppose that is why we all want to be independent and maybe work from home because we will get back that bit of enjoyment and independence that we once had when we were young and before all life’s pressures and responsibilities were placed upon us.
just my thoughts,
regards,
Mal.
Re: Social Media & Digg, Google, MySpace, and YouTube
- I use Google a lot for analysis and such. I recently started marketing through YouTube, and I like it a lot. Making videos is fun and enjoyable for me. I got a client who found me on YouTube and have been working together for a while now, so that's awesome. I just created a Facebook account a couple of days ago, so I'm just starting to market with it.
StumpleUpon is another great site that can help benefit your website and rankings. I haven't ever heard of Ning before. I'll have to check that one out.
All social sites are a great way to network and grow your business.
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Re: Cash up front ... or Royalties?
- The fees are certainly high for law services, and the knowledge they provide is critical.
A lack of legality in an inventor's process, which is best identified by a lawyer, trumps all other opinions(friends, family, economic development, engineering) instantly.
Re-Read the reasoning under #2.
and, to explain more:
Family time is generally more valuable than your friend time.
Your family can be, and has more of a responsibility to be candid than the majority of your friends.
Your family should have an excellent understanding of your financial capabilities. Your friends probably don't.
Example: You spend what could have been your kid's college fund on an invention. you just took a situation with a high chance of success (investing in your kid's education) down to a 1 in 1000 chance of success. And, your invention will most likely be worth less over time than the wealth creation that results from the investment in your kid's education.
If you family says that you don't have the time or money to do an invention, that should carry a completely different weight than any recommendations of your friends.
Harming the mental and financial stability of your family as a result of your devotion to your invention is a different situation than sacrificing time with your friends. Also, the feeling of responsibility from the two groups is completely different. For this reasons I separate family and friends into two different weights for their advice.
SUMMARY:
--The opinion of many others is extremely important, but the risk of doing something illegal trumps all other risks. Thus, my statement that of the lawyer gets #1 weight.
--Your family gets #2.
--Your friends have a minimal responsibility to you. they get #5.
Re: This ones a winner
- [quote="sboggs":2af4gk8a]I want to start a networking website where users send info to each other and (without spelling out my idea) users do things that the majority of americans love to do, as of lately....[/quote:2af4gk8a]
Hi Steve,
You have good idea and to develop social networking site let me put some fact about current situation I am programmer and working since last 8 years in this field so this is my opinion.
-In market now days number of social networking sites if you have specific idea than keep with you and don’t disclose until you finalize your development team and get NDA (Non-Discloser Agreement) signed from the development team.
-What are you going to build website just search that others is on same platform and if you found anyone just compare your features what you will provide for your site and make some more features which is not in current one.
-Get some knowledge for SEO (Search Engine Optimization) to recognize your site by all search engines and its necessary your site should be done with SEO friendly to get more traffic on site.
-Plan how will get earn from website from where you will get ads to put on site and where you will put these ads on site so you will get idea how it will make profit I know you have good idea and you had prepared for this also but just mentioning here to know others guys too -: )
-Decide which latest tools and technology you want to use in your site so it will ne less cost and it will help to reduce cost to running it. As I can say you should use PHP + MYSQL + AJAX its open source and free.
-The cost of development 20k is too much but actual cost will come to know when you mention all requirements specification in front of website designer and as per my opinion this will cost around you 5k but as I told you its based on tools and technology used in site and website requirements.
-I am running software development / website design and development / mobile application development company with 25 employee We had done number of dynamic website with database driven contents and more in past and if you need more help let me know I will help you more.
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