Lecture 10: Civil Society & Business Ethics

What are the issues that must be understood under this topic?

1. Why civil society organizations (CSOs)?

- There is resurgence of the notion on civil society, before this we were presumed to live in two-sector world; market (economic sector) & state sector (Government)
- Therefore, due to the resurgence of civil society as another institutional actor in society, it is called as a third sector.
- One if the reasons for the resurgence of Civil Society (CS) is due to the failure of the state and business to ensure effective provision of social welfare, and
scepticism of the people on the two-sector in listening and serving the interest of the society.
- To effectively represent the society, CS is made concrete through specific civil society organization (CSO) – which is the tangible manifestation of CS
- Definition : CSO includes a whole plethora of pressure groups, non Gov org, charities, religious groups, & other actors that r neither business nor Gov org, but which
r involved in the promotion of certain interest, causes & / goals.
- Example of CSO: the Red Cross, Greenpeace, Friends of the Earth, WWf, Oxam ect.
2. Why CSOs are deemed as important stakeholder of corporations?
- Unlike Supplier, Customer, employees, and Government, CSOs do not directly contribute any resources to corps, so why should CSOs have any stake on corps?
- Because, CSOs r representing the interest of individual stakeholders (they also may represent non-human such as environment, animal ), they provide a means to
make society views are heard. (E.g: Trade union, PETA people for the ethical treatment of animals).
- Stake of CSOs r indirect and representative (type of representative is usually divided by 2: sectional groups (insider status) and promotional group).
- Furthermore, nowadays more CSOs have established credibility and legitimate contributors of insider status ( Wootliff & Deri,2001) provide statistical prove
showing that in Euro especially, public trust CSOs highly as compared to corps. (Bt again, depends on individual countries, what is more favourable is varies).

3. How Corps response or recognize CROs stake?

- Theoretically (as suggest by chp 5) can use instrumental approach- where relative salience of stakeholders r assessed (depending on their power, influence, etc)
- However, it is not a straight forward process because some CSOs claimed (self-declare) that they have ethical right towards corps, so it depends on subjective
interpretation of corps on whether to recognize or not to their legitimate claim on stake. E.g: Coca-cola & international coalition of AIDS activists.
- Normative stakeholder theories do not provide specific boundaries of responsibility to CS groups.
4. What r the tactics used by CROs to achieve their purposes? (Craig Smith, 1990)
- Indirect approach: involve research & communication on issues relevant to corps. But this might cause provision of misleading information. To counter this, many
CSOs r credible in the eyes of the society
- Violent Direct action: often illegal, but generate the most publicity. Attractive for those who believe that the end justify their means. In a liberal, pluralistic society,
this type of acts are severely questioned.
- Non violent direct action: Demonstrations & marches, protests, boycotts, occupations, non-violent sabotage & disruption, stunts, & picketing (some of these may
be illegal).
- Boycott (under non violent direct action)- an attempt by one or more parties to achive certain objectives by urging individual Customers to refrain from making
selected purchases in the marketplace. Type of boycotts: instrumental (aimed so that the target may change policy), Catalytic (raise awareness on company’s
action and policy), Expressive ( communicate a general displeasure bout the target company), Punitive (to punish the target company for its action). How successful
these type of boycotts depends of how many people support them.
5. Ethical issues related to CSOs: CSOs accountability?
- CSOs as ‘agents’ and civil society as ‘principles’.
- Or CSOs r representative of different stakeholder interest. The CSOs stakeholders r: Beneficiaries, donors, members, employees, Gov org, other CSOs, and general
public who support their ideas.
6. Globalization & CSOs
- Engagement with overseas CSOs: MNCs r becoming deterriorialized , so they need to deal with unfamiliar CSOs. Depending on countries, some CSOs in a country r
not that active
- Global issues & causes: because corps r global, there r problems that transcend national boundaries. This leads to the critique of globalization
- Globalization of CSOs: global civil society – anti globalization movement for example might wide spread due to internet
7. Business – CSO collaboration
- Evidence suggest that degree of interaction between commercial and civil orgs has intensified
- Types of collaboration: social partnership
- Limitations of this collaboration: different in culture for diverse org, difficult ensuring consistency & commitment, issues of power imbalance, distribution of the
benefits, and the issue of CSO independence.
8. CS, business, & sustainability
- CSOs r at the forefront of development of sustainability theory & practice.
- While business mainly concern on economic sustainability, CSOs may force them to consider social and environment as well.
- But, how corps balance the competing interest of different civil actors depends on corps themselves.
- CSOs enable individuals to participate in the corps decisions that affect them.