Wednesday, June 22, 2011

CSR – It is still Greek to European Banks!

Yesterday, Greek Prime Minister George Papandreou narrowly won the support of the Greek parliament for his ongoing efforts to steer the country away from bankruptcy. Whether this has given him a second political life though is an open question. Greece’s financial troubles are far from over.

As a member the EU and the Eurozone the survival of Greece within these European institutions seems still anything but certain. Last week, the debate among European heads of state and Finance Ministers on further support for Greece was tough and controversial. Finally an agreement of another multi billion Euro cash injection from mostly France and Germany paved the way for keeping Greece floating for another month or so.

A thorny nettle of disagreement between the countries was the question, in how far private sector banks should be part of the solution. Germany, whose banks exposure of some €20bn is much lower than France’s was insisting on more involvement, while France opposed this approach in fear of a downgrading of their private banks by rating agencies. The compromise turned out to appeal to banks to ‘voluntarily’ become involved – but precious little is found in the news about whether banks have actually taken up this ‘invitation’.

If we watch the footage of protests and civil unrest in Greece it is conceivable that further ‘austerity’ measures (i.e. cutting public services) – let alone an outright bankruptcy – of the Greek government will pose a serious threat to the country’s democratic institutions. Much (admittedly not all) of Greece’s current troubles are following the global financial crisis. Greece is perhaps the most visible example of what many citizens in North America and Europe think: that Governments pile up huge debts to fix the irresponsible behaviour of wealthy bankers and investors while asking the common taxpayer and middle/working class people to put up with reduced public services or – as for instance in the case of UK university students – higher prices for those services.

It reflects a recent debate in the CSR literature which was initiated by Colin Crouch, a prominent sociologist and, more recently, CSR expert at Warwick University. He argues that capitalism has been able to coexist with democracy in most Western countries only because there were mechanisms to deal with two problems inherent in capitalist market economies: first, the cyclical ups and downs of the economy, which exposes particularly middle and lower income groups to economic hardship. Second, the harmonious coexistence of both systems is only possible if the inherent inequality of income distribution in capitalist systems can be addressed in a way that some income at the top end is redistributed to those at the bottom.

For decades after World War II the mechanism to address this problem was referred to as Keynesianism. Government spending during recession as well as progressive taxation and a welfare state helped addressing these two problems. This system was somewhat obliterated in the 1980s with policies most visibly linked to Reagan and Thatcher, often referred to as ‘neo-liberalism’. Crouch though argues that those changes in fact created a policy regime of ‘privatized Keynesianism’. By encouraging and extending home ownership, pension plans based on investments in capital markets and other models of making the saving middle class to small scale investors, the two inherent contradictions between capitalism and democracy were basically to turn lower income citizens in ‘mini capitalists’.

With the so-called ‘financial crisis’ in the late 2000s though this system has proven to be no longer effective. Many lower and middle income citizens in Western countries have lost their homes and pensions – or at least have suffered a severe reduction of their value. Currently, he suggests, we see this mechanism of ‘privatized Keynesianism’ weakened, if not absent, with no real alternatives in sight.

In this situation we face two stark options. The first possibility is that similar to the 1920s and early 1930s, this absence of a mediating policy regime may give rise to political extremism, anti-democratic movements or outright the re-invigoration of fascism or left wing authoritarianism. In this light, the developments in Greece, but also the ongoing rise of the political extreme right in many European countries and the United States actually get quite a daunting character. We are not quite there yet, but the signs of far reaching unrest and despair about the effects of a global, largely unregulated capitalist system are clearly there and by all accounts, are likely to rise.

The other option though, in Crouch’s argument, is that one group among the winners of global capitalism and arguably the most powerful players step into the role of addressing the two inherent tensions between capitalism and democracy. This is exactly the point where corporate social responsibility would kick in. And in fact, as we have argued elsewhere, much of what companies are doing under the label of CSR is in fact very similar to classic welfare state activities. CSR in this perspective would see private corporations as pivotal actors in addressing those two inherent tensions between capitalism and democracy.

The reaction of European banks to support the effort of saving Greece from bankruptcy so far however shows little sign of awareness of this broader context for corporate responsibility. The Greek bailout situation is probably a blatant example of a country at the brink of severe political unrest where direct involvement of the private sector might indeed prevent a country sliding into anarchy or political extremism. So far though there are no signs that any of the European banks have seriously thought about their broader role in society. Maybe it is because the business case for this kind of CSR is so hard to make...

Picture by PIAZZA del POPOLO. Reproduced under Creative Commons Licence.

Thursday, June 16, 2011

Another free download on corporate social responsibility

Last year we released a free download of our introduction to corporate social responsibility, originally published in our textbook "Corporate social responsibility: readings and cases in a global context". It proved to be pretty popular, with hundreds of downloads in the months since it was released. Today, we are making available another free CSR download, this time from our three volume edited collection on CSR, originally published by Sage in 2007. You can download the chapter by going HERE and selecting the "One Click Download" tab.

The new download is more of an academic-oriented treatment than our last one. It sets out to describe the academic literature on CSR rather than how CSR is thought about by practitioners. So for anyone doing research in the field, or just looking for a general introduction to the academic field of CSR, it will provide a handy starting point. We intended it to be accessible rather than too complex or jargony, so it should make sense to non-academics too.

The book itself is mainly intended for university libraries to purchase. At over 1000 pages and with a price tag of £450, that will probably come as no surprise! But we wanted to give the specially written introduction a wider readership and the publishers Sage have kindly agreed to now make it available free to anyone that wants to read it - and with all the final formatting and page setting in place too.

You may be interested in knowing which articles we ended up collating to capture the field of scholarship of CSR at the time. Things have moved on in the literature since 2007 but we think this still gives a pretty thorough overview of the field. The full table contents are below. If anyone wants full references for any of these pieces, just drop us a line. And keep watching for news of our next addition to the Sage Library in Business and Management - a mammoth 4 volume set on New Directions in Business Ethics, due out next year.


Volume I: Theories and Concepts of Corporate Social Responsibility

1. Editors’ introduction

2. Introduction to Corporate Social Responsibility

2.1 What's a business for?, Charles Handy
2.2 The case for corporate social responsibility, Henry Mintzberg

3. Corporate Social Responsibility in Theory
3.1 The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders, Archie B. Carroll
3.2 Corporate Social Responsibility Theories: Mapping the Territory, Elisabet Garriga & Domènec Melé

4. Critiques of Corporate Social Responsibility
4.1 The social responsibility of business is to increase its profits, Milton Friedman
4.2 The nature of business, Elaine Sternberg

5. Stakeholder Theory
5.1 The stakeholder theory of the corporation: concepts, evidence, and implications, Thomas Donaldson & Lee E. Preston
5.2 What stakeholder theory is not, Robert Phillips, R. Edward Freeman & Andrew C. Wicks

6. Corporate Citizenship
6.1 Corporate citizenship - towards an extended theoretical conceptualisation, Dirk Matten & Andrew Crane
6.2 Business citizenship: from domestic to global level of analysis, Jeanne M. Logsdon & Donna J. Wood

7. Corporate Sustainability and Business Ethics
7.1 Focusing on value: reconciling corporate social responsibility, sustainability and a stakeholder approach in a network world, David Wheeler, Barry Colbert & R. Edward Freeman
7.2 The corporate social policy process: beyond business ethics, corporate social responsibility, and corporate social responsiveness, Edwin M. Epstein

8. Corporate Social Performance
8.1 Corporate social performance revisited, Donna J. Wood
8.2 Corporate social and financial performance: A meta-analysis, Marc Orlitzky, Frank L. Schmidt & Sara L. Rynes

9. History of Corporate Social Responsibility
9.1 Corporate responsibility, Tom Cannon
9.2 Corporate social responsibility - evolution of a definitional construct, Archie B. Carroll

Volume II: Managing and Implementing Corporate Social Responsibility

1. Corporate Social Responsibility, Leadership And Strategy
1.1 Components of CEO Transformational Leadership and Corporate Social Responsibility, David A. Waldman, Donald S. Siegel & Mansour Javidan
1.2 How corporate social responsibility pays off, Lee Burke & Jeanne M. Logsdon

2. Organizing Corporate Social Responsibility: Organizational Structure, Culture And Learning
2.1 The Institutional Determinants of Social Responsibility, Marc T. Jones
2.2 The Path to Corporate Responsibility, Simon Zadek

3. Corporate Social Responsibility and Human Resource Management
3.1 The development of human rights responsibilities for multinational enterprises, Peter Muchlinski
3.2 Corporate social performance as a competitive advantage in attracting a quality workforce, Daniel W. Greening & Daniel B. Turban

4. Corporate Social Responsibility and Marketing
4.1 The Role of Marketing Actions with a Social Dimension: Appeals to the Institutional Environment, Jay M. Handelman & Stephen J. Arnold
4.2 Doing Better at Doing Good: when, why and how consumers respond to corporate social initiatives, C.B. Bhattacharya & Sankar Sen

5. Corporate Social Responsibility And Accounting
5.1 Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?, Rob Gray
5.2 Getting to the Bottom of "Triple Bottom Line", Wayne Norman & Chris MacDonald

6. Corporate Social Responsibility In Purchasing And Supply Chain Management
6.1 Supply chain specific? Understanding the patchy success of ethical sourcing initiatives, Sarah Roberts
6.2 Socially responsible organizational buying, Minette E. Drumwright

7. Corporate Social Responsibility And Public Affairs Management
7.1 Differences between public relations and corporate social responsibility: An analysis, Cynthia E. Clark
7.2 How Multinational Corporations Deal with their Socio-political Stakeholders: An Empirical Study in Asia, Europe, and the US, Dirk Holtbrügge & Nicola Berg

8. Stakeholder Management And Partnerships
8.1 Stakeholder management: framework and philosophy, R. Edward Freeman
8.2 Common interest, common good: Creating value through business and social sector partnerships, Shirley Sagawa & Eli Segal

9. Codes Of Conduct
9.1 Standards for corporate conduct in the international arena: challenges and opportunities for multinational corporations, S. Prakash Sethi
9.2 International codes of conduct and corporate social responsibility: Can transnational corporations regulate themselves?, Ans Kolk, Rob van Tulder & Carlijn Welters

Volume III: Corporate Social Responsibility in Global Context

1. Global Governance And The Firm
1.1 Global rules and private actors - towards a new role of the TNC in global governance, Andreas Georg Scherer, Guido Palazzo & Dorothée Baumann
1.2 Governing globalization? The state, law and structural change in corporate governance, John W. Cioffi

2. Institutions Of Global Corporate Social Responsibility
2.1 Reconstituting the public domain - issues, actors, and practices, John Gerard Ruggie
2.2 Strategic Responses to Global Climate Change: Conflicting Pressures on Multinationals in the Oil Industry, David L. Levy & Ans Kolk

3. Global Civil Society And The Corporation
3.1 The idea of global civil society, Mary Kaldor
3.2 Nongovernmental organizations as institutional actors in international business: theory and implications, Jonathan P. Doh & Hildy Teegen

4. Corporate Social Responsibility in Europe and North America
4.1 Corporate Social Responsibility in Europe and the U.S.: Insights from Businesses Self-presentations, Isabelle Maignan & David A. Ralston
4.2 A conceptual framework for understanding CSR in Europe, Dirk Matten & Jeremy Moon

5. Corporate Social Responsibility in Asia
5.1 Corporate Social Responsibility in Asia: A Seven Country Study of CSR Website Reporting, Wendy Chapple & Jeremy Moon
5.2 Transcending Transformation: Enlightening Endeavours at Tata Steel, S. Elankumaran, Rekha Seal & Anwar Hashmi

6. Corporate Social Responsibility in Africa
6.1 Revisiting Carroll's CSR pyramid: An African perspective, Wayne Visser
6.2 Do firms with unique competencies for rescuing victims of human catastrophes have special obligations? Corporate responsibility and the AIDS catastrophe in Sub-Saharan Africa, Thomas W. Dunfee

7. Corporate Social Responsibility in Latin America
7.1 The Corporate Social Responsibility System in Latin America and the Caribbean, Paul Alexander Haslam
7.2 Social and Environmental Responsibility in Small and Medium Enterprises in Latin America, Antonio Vives

8. Corporate Social Responsibility and International Development
8.1 Serving the world's poor, profitably, C.K. Prahalad & Allen Hammond
8.2 The false developmental promise of Corporate Social Responsibility: evidence from multinational oil companies, Jedrzej George Frynas

9. Fair Trade and Corporate Social Responsibility
9.1 The Fair Trade movement: parameters, issues, and future research, Geoff Moore
9.2 Fair Trade Futures, Alex Nicholls & Charlotte Opal

Photo by johntrainor. Reproduced under Creative Commons Licence

Thursday, June 9, 2011

Cucumber ethics

Last week’s E-coli outbreak in Germany was another interesting case study in the ethics of risk management. A ferocious looking bacteria, thought to be carried by the very food we eat whenever we feel like a healthy option (i.e. salad vegetables) has led to a scare that has plummeted many of Europe’s farmers into severe financial troubles. On the face of it the numbers don’t quite hit home why exactly consumers and regulators across Europe (and especially in Germany) have reacted so strongly: while, sadly, 26 people have died so far from the E-coli outbreak, this number looks negligible in comparison to Germany’s 3,651 fatalities in road accidents annually (in 2010). Banning Spanish cucumbers – sure thing! But touching the fundamental right of Germans to speed without limit on the Autobahn? No way, no one even thinks about that.

Fair enough maybe - food is one of those things that does raise the risk perception more than almost any other. But one of the more curious things about the outbreak was the initial culprit: cucumbers (especially as attention eventually turned to those evil little bean sprouts). But of course it wasn't just any old cucumbers - still less German cucumbers - but Spanish cucumbers that were blamed. In a continuously integrating EU economy, suddenly a poor little vegetable becomes the carrier of nationalistic identities and accusations.

There is something about cucumbers, one has to admit. In the German context, the vegetable has once before been at the centre of a rather black humoured joke just in the wake of the unification in 1989. The German satirical magazine ‘Titanic’ opened with a picture of ‘Zonen-Gabi’ (‘Gabi from the East’) holding up ‘her first banana’: a cucumber, peeled in the style of a banana. This of course was to make fun of the chronic absence of exotic fruits in the East during the time of the wall. The cucumber became an epitome of the split national identity that divided the unifying halves of the country at the time.

Poor cucumbers have also been at the centre of many jokes about the regulatory frenzy of EU bureaucrats in Europe. Allegedly there exist norms that lay out not merely how long, hard and green a cucumber must be but which even stipulate the degree of a cucumber's curvature: at maximum, its arc can be no more than 10 millimetres per 10 centimetre length. Imposed on poor Polish or Czech farmers prior to their countries’ accession to the EU, these regulations made the vegetable a symbol of the hegemonic power of Brussels and the nearly totalitarian zeal of regulating even the smallest little detail. All symbolized by, yes, cucumbers!

How political the innocent vegetable can become was demonstrated nowhere more strongly than in Iraq. According the UK newspaper the Telegraph, a few years ago Al-Qaeda leaders in Anbar province allegedly banned women from buying cucumbers because they considered them to be ‘male’ vegetables, and therefore in violation of religious law. Tomatoes, however, were perfectly fine for women to buy because they were considered female.

Well, if we were to do more research on the cultural history of cucumbers, who knows where we might end up - but Crane and Matten have no intention of jeopardizing the ‘General Audiences’ rating of their blog! Still, who would have thought that the lowly green vegetable could be such a repository of ethical values and a tool for inter-cultural conflict. So next time you're in the supermarket remember to take a second look at those cucumbers. There's so much more to them than meets the eye.

Top photo by Surian Soosay. Reproduced under creative commons licence