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Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 7 Global Corporate Citizenship.

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Presentation on theme: "Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 7 Global Corporate Citizenship."— Presentation transcript:

1 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 7 Global Corporate Citizenship

2 7-2 Ch. 7: Key Learning Objectives  Defining global corporate citizenship  Understanding how the multiple dimensions of corporate citizenship progress through a series of stages  Assessing how corporate citizenship differs among various countries and regions of the world  Understanding how a business or social groups can audit corporate citizenship activities and report their findings to stakeholders  Recognizing how an organization communicates its corporate citizenship practices and manifests its attention to the balanced scorecard and triple bottom line approaches

3 7-3 Global Corporate Citizenship  Refers to putting an organization’s commitment to social and environmental responsibility into practice worldwide not only locally and regionally.  Entails putting corporate social responsibility into practice by  Proactively building stakeholder partnerships  Discovering business opportunities in serving society  Transforming a concern for financial performance into a vision of integrated financial and social performance

4 7-4 Global Corporate Citizenship  Concept is consistent with several major themes discussed throughout this book:  Managers and companies have responsibilities to all their stakeholders  Corporate citizenship (CC) involves more than just meeting legal requirements  CC requires that a company focus on, and respond to, stakeholder expectations and undertake those voluntary acts that are consistent with its values and business mission  CC involves both what the corporation does and the processes and structures through which it engages stakeholders and makes decisions

5 7-5 Citizenship Profile  Research by Gardberg and Fombrun argues that corporate citizenship activities should be viewed as strategic investments (like research and development)  Create intangible assets that lead to improved legitimacy, reputation and competitive advantage  Particularly true of global firms where citizenship activities overcome nationalistic barriers and build local advantage  Important for global firms to choose a Citizenship Profile which matches the local setting  Public expectations vary on factors such as environmental risk, philanthropy and worker rights  Companies that choose the right configuration of citizenship activities to match public expectations will reap strategic advantages

6 7-6 Management Systems for Global Corporate Citizenship  Global corporate citizenship is more than espoused values; it requires action  In order to become leading citizens of the world, companies must establish management processes and structures to carry out their citizen commitments  Could be assigned to committee of the board, senior executive committee, single executive/group of executives, or departments of corporate citizenship  As the practice of corporate citizenship has spread, so have professional associations and consultancies serving managers in this arena  Business for Social Responsibility, Canadian Business for Social Responsibility, Asian Forum on Corporate Social Responsibility

7 7-7 The Stages of Global Corporate Citizenship  Is a developmental change process, involving new attitudes, routines, policies, programs and relationships  Mirvis and Googins of the Center for Global Citizenship proposed a five stage model of global corporate citizenship  Each stage is characterized by distinct patters of:  Citizenship content  Strategic intent  Leadership  Structure  Issues management  Stakeholder relationships  Transparency

8 7-8 Stages of Global Corporate Citizenship Figure 7.1

9 7-9 Corporate Citizenship in Comparative Perspective  How businesses interpret and act on their citizenship varies across the glob  Trends from current studies  Companies in Northern America and Europe are more likely than Asian companies to have written corporate citizenship policies, Asian companies however are more likely to have written ethics policies  Comparative study across the Americas showed “huge gap” between the practices of companies in U.S. and Canada and Latin America and Caribbean  Governments in Europe play a much more important role in promoting CSR than in the U.S.

10 7-10 Social Performance Auditing  Is a systematic evaluation of an organization’s social, ethical, and environmental performance  Demand for social auditing has gained momentum in Europe and U.S.  In some European countries auditing is required by law  Corporate citizenship scales against which a firm’s citizenship activities can be compared include:  Performance measured against a company’s own mission statement or policies  Performance measured against a set of established standards Like the Davenport Principles presented in Exhibit 7B of the text, or the global standards presented on the following slides

11 7-11 Global Social Audit Standards Figure 7.2

12 7-12 Trends in Corporate Social Reporting Figure 7.3

13 7-13 Other Social Reporting Methods  Balanced Scorecard  A focused set of key financial and nonfinancial indicators, with four quadrants or perspectives – internal business processes, learning and growth, customer, and financial  Triple Bottom Line  Companies report to stakeholders not just their financial results -- as in the traditional annual report to stakeholders – 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  Transparency  Growing demand by stakeholders for companies to report clearly, fully, and publicly the results of their financial, social and environmental performance audits

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