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In November 2004, NGOs and trade unions, primarily in Europe, joined together to call for the European Union to propose a new corporate social responsibility agenda. At the top of that agenda was the demand that CSR ‘demonstrate its credibility globally, particularly in the developing country context’.1 The statement is one of several indications that, for many, CSR is now intertwined with international development and the related goals of poverty alleviation and sustainability. How this connection is conceived gets expressed in a variety of ways, and there have been changes over time. For instance, in 1997 the British Department for International Development talked about CSR as a means to protect workers and the environment from the undesired consequences of the otherwise desirable fostering of international trade.2 Six years later the World Bank described CSR in much more positive terms as ‘the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life, in ways that are both good for business and good for development’.3 Both the interpretations of CSR quoted above are significantly different from previous thinking about the role of business in international development, namely that it serves as an engine for economic growth, the benefits of which will be felt by all. Nothing in this article is intended to detract from the fact that CSR has got people talking about worker rights, global governance, sustainable enterprise and all manner of topics that have relevance to the wellbeing of the poor and marginalized. But are business and development happy bedfellows? Part of developing a critical approach to CSR requires us not only to ask how CSR affects company behaviour in developing countries; it requires us also to ask if, and how, business is affecting the meaning of development itself. It is the latter issue that is at the heart of this article, which not only discusses the CSR–development relationship, but sets out a list of questions that
NGO and trade union statement at the European Conference on Corporate Social Responsibility, Maastricht, 7–9 Nov. 2004. 2 DFID, Eliminating global poverty: the challenge for the 21st century (London: HMSO, 1997). 3 www.worldbank.org/privatesector/whatwedo.htm, accessed 24 March 2004.
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I have heard similar thinking reflected in the remarks of some policy-makers who want to judge the success or failure of CSR on the basis of this type of economic indicator. many basic features of the business–development relationship were defined at that time. Although the optimism of this ‘economic rights’ view of business was subsequently tarnished because of exploitation of workers. they were either ignored by development professionals or seen as problematic. and admit that they have always needed to manage their relationship with wider society. Developing-country governments framed business’s role in terms of import substitution and nationalization. If companies shake off the legacy of certain economists. seem at best able to propose a reformist agenda rooted firmly in the norms of business management thinking and practice. we are a long way from identifying alternatives. However. many feel that business was for too long left out of development thinking. communities and the natural environment. because not only does it discourage the kind of debate that is essential to addressing complex challenges.Michael Blowfield development professionals can use in assessing their relationship with business. While some might object to the values of business being espoused as global norms affecting all social interactions. For me. Business’s contribution to development goals As other authors in this volume make clear. and I provide more clues than solutions. then it will be easier to see in CSR the moral vision of capitalism. services and knowledge. But perhaps that agenda is sufficient. Some supporters of CSR seem to argue that if one cannot provide an alternative then one has no right to offer a critique. Civil society organizations. although they may use radical language. A key consideration in 516 . International trade and investment are almost uniformly seen as crucial to development. In this article I will argue that business is indeed affecting development. There was tacit acceptance that the private sector would generate employment and contribute to government revenues. Let me say from the outset that I offer more questions than answers. it is less than clear whether this is a good or bad facet of globalization. and if others acknowledge the limits to what can be expected of business and its contribution to the public good. Although western companies operated in developing countries. this attitude itself is an insight into the weaknesses of contemporary CSR. and many public-sector development agencies have defined their role in terms of facilitating a policy environment favouring an easy and accelerating flow of goods. and one of the ways this happens is by allowing business thinking to dominate the way we view the world. and to become the norm against which everything else is tested for true and false value. That changed in the 1980s when the private sector was seen as the liberator of underdeveloped economies. but it was rarely thought of as having a central role. local entrepreneurs and politicians often eyed each other with mutual suspicion and resentment. it puts CSR firmly in a mindset that favours solutions over analysis. I make no apology for this.
This is evident in the sorts of right recognized within CSR. Uncertainties about these theories are discussed in more depth in Rhys Jenkins’s article in this issue. and hence to talk about companies in terms of providing goods and services to the poor. it can be accused of being complicit with a de facto stifling of many spheres of regulation.4 This 4 See e. forest management and farming. This is not to reject all forms of voluntary regulation: the power relationships within modern supply chains can bring a significant new dimension to global governance. and assess how far CSR challenges. the labour standards which are an increasingly common part of buyer–supplier contracts in certain industries guarantee basic worker rights but implicitly accept the right of companies to lay off workers and close down facilities without compensation. and have led to improved company performance in areas such as food safety. gender equity. Thus we have started to see a shift in thinking about CSR from being a way of ameliorating the worst consequences of foreign direct investment to also becoming a way of accelerating such investment. David Grayson. but this should not blind us to the risks involved in basing discussions about social and environmental justice solely on economic arguments. 517 . both to business and development audiences. Corporate social opportunity (Sheffield: Greenleaf. we need to view voluntary regulation in the wider context of how business is trying to influence national and international governance. It is especially noticeable that. The fortune at the bottom of the pyramid: eradicating poverty through profits (New York: Wharton School Publishing. Furthermore. C. 2004). I will examine some of the reasons for this later on in the article. although accountability is central to CSR (see Rhys Jenkins’s article in this issue). but at the same time indirectly shields companies from any responsibility for the consequences of disinvestment.Corporate Social Responsibility this context is how CSR affects foreign direct investment. Another way of looking at the business–development relationship is to see poor people as a marketing opportunity.g. Indeed. In some ways this reflects a wider phenomenon in CSR by which company involvement in social and environmental management is justified by its commercial benefits. K. 2004). However. moderates or opposes those trends. as with all aspects of CSR. CSR has largely viewed developing countries as a resource producing items for affluent markets. which now far exceeds official development assistance but stubbornly avoids the poorest countries. Thus CSR offers certain basic protections to workers. income levels and poverty reduction. there is little sign that accountability is being extended to headline social development indicators such as employment. For instance. There are pragmatic reasons for using financial arguments to promote CSR. there is a possibility that issues ignored by CSR will not be addressed in other ways. especially in the poorest countries. Prahalad. because CSR typically has nothing to say about corporate taxation or active lobbying to influence the regulatory capacity of governments. because labour standards and other similar tools widely used in CSR can be promoted as a voluntary alternative to state regulation and enforcement.
Although there has been much discussion about what companies should be responsible for and how they should manage those responsibilities. it is important to understand where there are gaps and contradictions. the use of forced labour or hazardous pesticides by suppliers to major western companies was made public. So. but more important longer-term tests for CSR are (1) whether it can help companies redefine the meaning of good business practice in the interests of the poor and marginalized. But until we know more about the consequences of multinationals entering markets previously served by local small and medium-sized operations we need to be cautious about such ideas and initiatives. Although there may be areas of overlap between development and business goals. but it is at best only a start in redefining business practice in the interests of the poor and marginalized. perhaps the biggest changes that have occurred are that vertically integrated companies are applying similar social and environmental standards in developing economies as in developed ones. not developmental ones. the media and civil society have been used to stimulate debate about how companies should relate to the poor and marginalized. a consensus has emerged over some of the limits to companies’ permissible exploitation of developing countries’ competitive advantage. consumers. this sense of responsibility 518 . workers and natural resource endowments. Although CSR is often described in terms of the rights it has forced companies to recognize. and those companies eventually adopted codes of practice to regulate supplier behaviour. It is worth reminding companies that their interests are not always at odds with those of development. In both cases. for instance. We should certainly avoid the error made by CSR in the past of celebrating particular approaches before we have any real understanding of their impact. while companies dependent on supply chains are taking responsibility for the social and environmental performance of their suppliers.Michael Blowfield thinking is reflected in the product lines of companies such as Unilever and P&G. CSR has made progress in helping companies rethink their responsibilities and self-interest in the developing-country context. and the expansion plans of retailers such as Carrefour and Walmart that are opening outlets in developing countries. and (2) whether it helps development practitioners manage the possibilities and consequences of global capitalism for poor countries more effectively. At CSR events in Europe and North America these trends are hailed as positive and have attracted donor funding. This has happened in part because power relationships between companies and investors. Developing countries’ relationship with business The presence or absence of international companies in a country can affect its development. but we should not lose sight of the fundamental fact that such companies engage with developing economies for commercial reasons. and in part because various tools and models have been developed to manage social and environmental performance. This can be significant for some communities.
6 See e. but these elements are the ones which are used to test the value of any competing views. Moreover. and one that is still contested by the many laissez-faire economists and conventional management theorists. Michael E.g. what is not disputed is the utility of codes and similar scales for measuring performance.6 Likewise. 519 . it also tells us about some of the limits to business’s view of developing countries and its preparedness to contribute to development goals. 2003. although there is much debate about what criteria should be included in codes of practice or how best to conduct social and environmental monitoring.g. There have been important achievements. For instance. ‘A gendered value chain approach to codes of conduct in African horticulture’. 7 See e. Anyone familiar with contemporary western culture should not be surprised at this. Halina Ward. 2003). World Development 31: 9. Greener Management International 43. 19–26. Autumn 2004. 107–18.Corporate Social Responsibility is exercised above and beyond any legal requirements. What CSR has to tell us about these possibilities and limitations is my next topic. pp. and collaboration on preventing corruption. This is an important shift in attitude and principles. there are strong arguments for extending the scope of codes of labour practice so that they better address the priorities of female workers.5 Yet many still talk about CSR in terms of its radical possibilities to change the way business is conducted and for whose benefit. or the effectiveness of auditing. there are calls to strengthen the legal framework affecting CSR. 1511–27. Not everyone agrees with the codes of practice. Catherine Dolan and Anne Tallontire. pp. Critical Quarterly 44: 3. 2004).7 and to incorporate 5 Nigel Thrift. although there is little understanding about their actual effect on developing countries and their populations other than case-studies and a small amount of impact assessment work. improvements in both the scope and methods of environmental management. The values of business meet the hopes of development A feature of CSR in recent years is the speed with which it has given rise to an orthodoxy that sets out what responsible behaviour looks like and how it is to be managed. Dena Freeman. homeworkers and the large casual workforce. and especially considering the way certain approaches have come to be thought of as universally applicable best practice. Greener Management International 43. pp. pp. Blowfield. This is a cause for concern. principles and systems that are held up as CSR best practice. Autumn 2004. Christian Aid. Behind the mask: the real face of corporate social responsibility (London: Christian Aid. ‘Homeworkers in global supply chains’. Legal issues in corporate citizenship (London: International Institute for Environment and Development. given the support for CSR by multilateral and bilateral development agencies. because language and other aspects of daily life have been strongly influenced by business thinking. coffee and tea industries’. 15–24. However. Indications of these possibilities include making agreements to stamp out abusive labour practices. Stephanie Barrientos. ‘“Think and act like revolutionaries”: episodes from the global triumph of management discourse’. reporting and other instruments rooted in financial management to bring positive development outcomes. guidelines. ‘Ethical supply chains in the cocoa. Many of those interested in improving CSR concentrate on how to reform these approaches. 2002.
Rather. Marx. we should be aware that because these values go unquestioned. and the privileging of companies as citizens and moral entities. Sometimes a company’s CSR report will mention profitability among its principles. labour and other commodities can be bought. the universal good of free trade. for instance through a more perfect taxonomy of workers and their issues. For example. and most are to be found in the works of Adam Smith. therefore. the freedom of capital. they are often regarded as having primacy over conflicting sets of norms. The most clearly apparent limitations to the approaches typical of contemporary CSR relate to the fundamental values and tenets of the capitalist enterprise.g. values and priorities. as happened in discussions by the British government’s Operating and Financial Review (a UK government initiative led by the Department of Trade and Industry to change company law). First. in some instances the non-negotiable values will not be shared by. sold and otherwise alienated is a very particular concept that is by no means universal. and workers or communities may have very different expectations of a company’s obligations towards them. Some reforms of this kind will be helpful. the superiority of markets in determining price and value. we need to recognize that when we talk about values in relation to capitalist enterprise. Third. But attempts to redefine the purpose of business outside these principles have met an early death. These include the right to make a profit. but they should not lead us into thinking that current approaches have infinite possibilities. CSR has had no impact on these. and more than one company has interpreted sustainability as meaning business viability. the commoditization of things including labour. For example. there is a risk that by putting some social and environmental justice issues into an arena for 520 . The fact that companies claim certain basic rights. and it is possible to argue that by overlooking them CSR has further added to their unquestioned legitimacy. for workers) in CSR standards. the idea that land. the ignoring or taking for granted of these rights tells us a great deal about what CSR is and what it can be for development. Keynes and Friedman as well as reflected in company law in much of the post-communist world. a community’s rights to land affected by mining can be subject to extensive negotiation as part of CSR stakeholder engagement. the supremacy of private property. Second. There is nothing new about these. Fourth. but the right of an artificial entity such as a mining company to own and dispose of land is not questioned. is not merely of academic interest. there is a difference between the values that are negotiable and those that are not. or through tougher laws and enforcement. These perspectives are based on the assumption that any weaknesses in CSR can be addressed by technical problem-solving.Michael Blowfield stronger rights of redress (e. that so little is made of these basic values in the supposedly values-oriented world of CSR. Non-negotiable values are the fundamental principles mentioned above. It is surprising. and that these are almost never acknowledged by CSR researchers and practitioners. those of intended beneficiaries of CSR in developing countries. and may conflict with.
As anthropology and development studies have made apparent. the direction taken by international capitalism. developing countries are home to a rich diversity of social and value systems. Indeed. It is equally apparent from sociology and business ethics that capitalist enterprise has particular cultural and ideational roots. and what can be done to ensure that goals for which there is not a business case remain legitimate. conferences and consultants’ pitches to companies. The conviction that we need to make a commercial argument for why companies should seek to deliver social and environmental benefits in part demonstrates the point made in the previous section about the dominance of the fundamental values of business over competing ones. economic. 521 . technological innovation in communications and data 8 John MacLean. Perhaps the biggest influence business will have on development is not in the direct impact of individual companies. The business case and the development case The business case for CSR is a common theme in articles.. There are broad issues to do with how far it is possible and desirable to make a business case for developmental goals. but that is not the major determinant of what is addressed.8 CSR is an example of this process. 1999). perhaps more importantly. when we talk about globalization. we need to be constantly alert to how a ‘business-like’ mindset affects the way we think about development. reflecting as it does four of the key elements of globalization: the spread of rationalism as a dominant knowledge framework. ethics and agency (London: Routledge. Some of these are relevant to the poor and marginalized. there are examples of individual companies suffering because they fail to comply with the CSR demands of their customers. we are allowing the interests of company managers and investors to redefine what justice can and cannot mean. especially in respect to political. This raises important questions for development. But none of the changes that have occurred constitute a challenge to the basic rights asserted by business as a whole. Politics and globalisation: knowledge. the changes have involved a real financial cost. Equally. but in the influence of business thinking and related notions of managerial efficiency on how we view and construct the world. and there are instances where a commitment to CSR has been responsible in part for significant changes in business relationships. what we are referring to is not a dominant economic system. ethical and social theory. but the fostering.Corporate Social Responsibility public debate while ignoring others. CSR has fostered change in areas that business has been willing to negotiate over. even though these are often treated as universal. In some cases. The distinction made above between negotiable and non-negotiable values helps clarify why some aspects of business’s relationship with wider society have been included within CSR while others have not. ed. ‘Towards a political economy of agency in contemporary international relations’. legitimization and universalization of a transcendental form of knowledge. in Martin Shaw. and the consequences for the poor and marginalized of managing development in a ‘business-like’ fashion. But.
and segmenting information into quantifiable components to aid the process of management. Globalization: a critical introduction (New York: Palgrave. private as opposed to communal property. but rather relates to the nature of business itself. and the establishment of new enabling regulatory frameworks. while at the same time leaving intact the fundamental values of the contemporary capitalist enterprise.g. there is a possibility for them to benefit from CSR.Michael Blowfield processing. is inherently difficult to critique. commoditized labour. values that do not dictate globalization but that are nonetheless reinforced and normalized by it. It treats capitalist assumptions and values (e. non-complementary values. but this is to deny the existence and influence of structural elements such as those that define globalization. it is more useful to look at how the interests of business are favoured as part of globalization than to look for examples of particular companies and industries influencing the CSR agenda. employing methods firmly rooted in the science of enquiry and instrumentalist problem-solving. the corporation as a moral entity. In terms of understanding how business affects development. 522 . The technologies used in CSR reflect a preference for measurement. the rights of capital) as universal norms even when these might run counter to the well-being or experience of workers and local communities. 2000). Some feel that CSR. quantitative data-processing and particular means of communication as part of globalization. and (b) where the impact of business on society cannot be addressed at the individual company or industry level. 9 Jan Aart Scholte. part of an apparent growth in voluntary regulation that has evolved to fill the regulatory deficit in certain aspects of human endeavour beyond the boundaries of the state. If we want to understand the extent to which business influences CSR. as an evolving field. CSR is used as a form of regulation. the individual rather than the community as the subject of benefit). we need to distinguish between the business case and the case for business.g. It also reproduces capitalist constructions of social relations that are either unchallenged or at least held up as norms against which other social constructs are tested for true or false value (e. at once allowing speedy and widespread access to information about poor company performance. In so far as the poor and marginalized share values that complement those universalized through globalization. But CSR’s potential is much weaker (a) where the poor and marginalized hold alternative. CSR has proved able to influence the behaviour of individual companies and peers within related industries.9 We see these elements in contemporary CSR practice: • • • • Its standards are rationalist in that they are rooted within a particular configuration of knowledge that is secular and anthropocentric.
from voluntary and mandatory regulation. as this has been a constant throughout history. access and opportunity. CSR operates at the company and sometimes the industry level. even when CSR makes a positive contribution to development goals. this simply reflects a wider malaise. there will still be gaps that need to be tackled by government and civil society. we can see that there is a need to adopt a critical approach to understanding both the practices and the potential of CSR. then CSR is unlikely to provide a solution. but in capturing and presenting the moral dimensions of capitalism in ways that resonate with investors and consumers. Therefore. It reminds us that there is a moral purpose to capitalism. may complement business activity. In talking about a critical perspective. Hoogvelt. This is an important view of the company. With regard to the second. although some of the resulting policies and initiatives. but one that is neither historically comprehensive nor necessarily reflective of the views of all major business leaders. 2001). Globalization and the postcolonial world: the new political economy of development (Baltimore: Johns Hopkins University Press. Second. the strength of CSR lies not in presenting an alternative model of business. the critical perspective is synonymous with an anti-CSR stance which essentially argues that the only real purpose of firms is to make a profit and protect shareholder wealth. we need to accept from the outset that in some situations achieving social and environmental justice still requires international development to challenge and oppose business’s interests.10 But if poverty is structural rather than. On the contrary. More thought needs to be given in policy-making circles to what is the best balance between voluntary and mandatory approaches to regulation. Consequently. where poverty and disadvantage are thought of as difference rather than the consequences of hegemonic power. First. I am arguing that we need a more comprehensive and nuanced view of that relationship than the one offered by CSR. At present. on the contrary.Corporate Social Responsibility I have touched on the first of these points earlier. and thus does not tackle or even acknowledge any structural dimensions to the business– poverty relationship. the definitions of social and environmental justice acknowledged in CSR are different from those we might expect to be used in international development. but does not help answer Charles Handy’s question about for what and for whom business exists. Moreover. I am not denying the importance of companies managing their relationship with wider society. and are actionable by managers. For some critics of international development. that more nuanced view allows us to see that CSR accepts certain business values as non-negotiable. Implications of CSR for development The above discussion makes important points for anyone working in international development. a matter of capacity. as much of modern development theory implies. 523 . 10 Ankie M. and addresses only what business is prepared to accept as negotiable.
11 Fourth. 11 ‘The good company’. it is informative that one of The Economist’s criticisms of CSR is that it does not contribute to the kind of rigorous public policy needed to increase business’s contribution to the public good. This in turn can result in accepting downgraded expectations of what the actions of business should contribute to society. it has revealed that the dominant model of globalization has a moral dimension that is being treated as universal just as its economic and political dimensions are.Economist.Michael Blowfield Third. accessed at www. The Economist. and thus overlook the consequences of the norms of business influencing our thinking. and even if we are a long way from finding solutions. it is clear that the business case has had a significant effect on what is and is not considered a corporate responsibility within CSR. business self-interest can also take precedence over wider societal interests if we treat the outcome of partnerships with business as unbiased. as has already been apparent in recent years in the ways arguments for business efficiency have reshaped expectations of health care and pensions. Both business management mindsets and business investors’ prerogatives have significantly influenced the interpretation and practice of CSR. CSR helps us to see some of the constraints and limitations on reforming this dominant model of globalization. 13 Feb. such as paying taxes. and thus uncovers areas where we need to revisit our development thinking. and it has forced business to take an unambiguous position about certain aspects of environmental management and abuses of human rights. perhaps CSR’s biggest contribution has been to stimulate new thinking about the business–society relationship. 2005. 20 Jan. Indeed. 524 . we are at least becoming aware of the need for new forms of dialogue. It has led to new notions of responsibility in supply chains that go deep into some developing countries. Moreover. While this has led to some important changes in business thinking. Indeed. None of this is to dismiss CSR as folly. we need to be vigilant to ensure that CSR does not come to define the extent of corporate responsibility to the exclusion of other legitimate demands. 2005. Not least.com.