1. Global Corporate Citizenship
Chapter 7
Global Corporate Citizenship
McGraw-Hill/Irwin
Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Ch. 7: Key Learning Objectives
Defining global corporate citizenship and observing it in practice
Recognizing the many different approaches to managing corporate citizenship
Understanding how the multiple dimensions of corporate citizenship progress through a series of stages
Understanding how 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 various social performance standards, such as the triple bottom line
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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
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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 or responsibility involves more than just meeting legal requirements
Corporate citizenship 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
Corporate citizenship involves both what the corporation does and the processes and structures through which it engages stakeholders and makes decisions
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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
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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
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7. International Organizations that Support Corporate Citizenship Activities for Businesses
BSR (formerly Business for Social Responsibility),
Canadian Business for Social Responsibility (CBSR)
Corporate Social Responsibility Europe
Forum Empresa
The African Institute of Corporate Citizenship, or AICC Africa
CSR-Asia
Asian Forum on Corporate Social Responsibility
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8. 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 patterns of:
Citizenship content
Strategic intent
Leadership
Structure
Issues management
Stakeholder relationships
Transparency
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9. Stages of Global Corporate Citizenship
Figure 7.1
Stages of Global Corporate Citizenship
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10. Assessing Global Corporate Citizenship
As companies around the world expand their commitment to corporate citizenship, they have also improved their capacity to measure performance and assess results
A social audit is a systematic evaluation of an organization’s social, ethical, and environmental performance
A company’s performance is evaluated relative to a set of externally imposed standards
The results of the audit are used to improve the firm’s performance and to communicate with stakeholders and the public
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11. Six Benefits of Social Audits
Identified by scholar Simon Zadek
Help businesses know what is happening within their firm
Understand what stakeholders think about and want from the business
Tell stakeholders what the business has achieved
Strengthen the loyalty and commitment of stakeholders
Enhance the organization’s decision making
Improve the business’s overall performance
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12. Global Social and Environmental Audit Standards
Figure 7.2
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13. The Auditing Process
Companies have several choices in carrying out an audit
Internal audit: company hires and trains its own staff of auditors whose job is to inspect factories—either its own or those operated by contractors—to determine whether or not they are in compliance
External or third-party audit: company hires another organization to carry out the audit and report back to the company
Crowd-sourcing audit: company gathers information directly from workers using their mobile phones
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14. Social and Environmental Reporting
When a company decides to publicize information collected in a social audit, this is called corporate social reporting
When companies clearly and openly report their performance—financial, social, and environmental—to their various stakeholders, they are acting with transparency
The term transparency refers to a quality of complete clarity; a clear glass window, for example, is said to be transparent
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15. Trends in Corporate Social Reporting
Figure 7.3
Trends in Corporate Social Reporting
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16. Triple Bottom Line
Bottom line refers to the figure at the end of a company’s financial statement that summarizes its earnings, after expenses
Occurs when companies report to stakeholders not just their financial results—as in the traditional annual report to shareholders—but also their environmental and social impacts
Firms in Europe have more quickly accepted triple bottom line than have those in the United States
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