Chapter 7

Global Corporate
Citizenship
 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
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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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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

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 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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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
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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

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Figure 7.1 Stages of Global Corporate Citizenship

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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.
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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

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 Figure 7.2 Global Social Audit Standards

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Figure 7.3 Trends in Corporate Social Reporting

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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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