International Corporate Responsibility Series

This paper addresses the issue of food security in developing countries and how agriculture plays an important role in achieving not only food security, but also in reducing poverty and promoting sustainable development. The promotion of trade liberalization by the World Trade Organization (WTO) through the Agreement on Agriculture (AoA) has undermined the productive capacity of developing countries and their comparative advantage in the agricultural sector, marginalizing small-scale farmers and benefitting the big corporations. The paper looks at the issue of intellectual property rights that big corporations have for seeds and their effects on small-scale farmers, and how corporate social responsibility (CSR) is insufficient to regulate the dominance of big corporations in the food and agricultural market. The paper is divided into seven sections: trade liberalization and food security, the WTO and the AoA, the effects of the AoA on developing countries, the role of transnational corporations (TNCs) on food security, CSR and TNCs, policy recommendations, and conclusions.

In this paper I argue that large cooperative organizations, in particular cooperative banks, are better positioned than business firms to be ethically responsible, global citizens. These organizations include cooperative networks in France, the Netherlands, and Germany, provident societies in the United Kingdom, and Mouvement des caisses populaires Desjardins and credit unions in Canada. Large cooperatives are distinct from firms but compete with them and are major socio-economic actors in their respective communities. They are more predisposed to implement policies that are compatible with local expectations and simultaneously reflect fundamental macro-social principles or hypernorms. The advantage of these particular economic organizations springs from their institutional and historical background, and particularly from the cooperative values on which they are founded and which make them different from firms.

The purpose of this paper is to analyze the meaning and scope of social responsibility in a state-owned enterprise. Is corporate social responsibility (CSR) a meaningful concept for a state-owned enterprise, as opposed to a privately-owned corporation, given that it is created with social as well as economic aims? To try to answer to this question, the case of Sonatrach, an Algerian oil company, is examined. The lack of statistical data does not allow an assessment of CSR actions undertaken by this company since 2004. The analysis identifies two main obstacles to the effectiveness of CSR in state-owned enterprises: (a) the system of internal governance ischaracterized by a lack of control; (b) the competitive and social environment is characterized by a partial application of the logic of the market, which does not allow the optimal allocation of means.

The paper is focused upon the relations of key inside stakeholders—managers and employees whose interests are supposed to be represented by trade unions while shaping internal CSR practices. It discusses real, perceived and desired role of TU in the process and the outcomes of internal CSR in the fields of work related security and access to social benefits. It is demonstrated that the internal social policy of corporate management pursues pragmatic goals seeking the least costly way to compete for skilled manpower and accumulate human capital. The role of TU is chiefly limited to assisting the management in distribution of social benefits. As a result the benefit distribution contributes to social inequality patterns inside corporation. It is safe to conclude that so far the internal CSR patterns in Russia are formed under a mixture of pragmatic and paternalistic reasons with minor traces of social dialogue.

This article studies the possibility of forming social policy, and in particular policies for social security, through the participation of domestic business. By taking on social responsibility, business can eventually, of own its own accord, offer the state and society its assistance in dealing with social problems. In Kazakhstan, a major part of business people see their responsibility as many-sided, consisting of duties to employees, consumers, business partners, the local community, and the country as a whole. They acknowledge responsibility along three dimensions: financial, ecological, and social.

It is common today that organizations have their own distinctive cultures, even in cases when they may not have willfully attempted to create them. Rather, cultures have most likely been created unconsciously, forced by the values of top level managers, the founder, or core people who have built or direct the organization. Leaders frequently attempt to change the culture of their organizations to suit their own preferences. The resulting culture will influence the decision-making process, market demand, and nature of the business. It affects management styles and what everyone determines as success. This study is an attempt to discover how culture influences management styles and decisions, with special reference to the local environment in Oman.

Fethullah Gülen, a leader of interfaith and intercultural dialogue, writes of “humanity’s vicegerency” that includes “reaping the bounties of the Earth . . . within the framework of the Creator’s orders and rules.” What might this mean for international business ethics in general, and the expansion of Islamic banking practices and global financial ethics in particular? Forthrightness and transparency are critical in the contemporary development and spread of what are nominated Islamic or shariah-compliant financial products and services. This paper seeks to explore the advantages of acceptably disparate analyses of shariah-compliance, by suggesting how a Gülen-like religion-state symphonia can evolve. The resulting arrangement of financial affairs would thus allow for real diversity inbanking options for all sorts of clients, carving out a space for secular and religious-based institutions, alike, in the global marketplace.

The paper highlights the importance of a strategic alliance between the Qatar Foundation for Education, Science and Community and the Al-Jazeera International Channel. Secondly, we discuss the global outlook as to how Qatar can position itself on the world map as knowledge-based nation and a land of innovative ideas. Thirdly, we analyse the new role of Islamic finance in social responsibility and why investment in social capital is vitally important in a challenging world. We select four Muslim countries that Qatar should consider for human capital investment purposes—Egypt (the brain and heart of the Arab world), Syria, Turkey, and Malaysia—and justify this selection. Fourthly, we discuss a new role for the Aljazeera International Channel as a promoter of successful entrepreneurs and venture capitalists in the Muslim World, to show what real Islamic finance is. Finally, the challenges ahead are discussed and policy recommendations suggested.

In general it is found that the corporate managers and stockholders possess totally different view about good governance of a company. Managers strongly believe that governance of their companies is quite well but stockholders view that it is very poor. The study found that the groups differ in perception especially in terms of turnover, production, capital, leverage, debt service, credit policy, solvency, human resource, recruitment, technology, customer satisfaction, internal control, strength, opportunity, competition, industry position, collective bargaining agent (CBA) issues, and economic remedies; whereas, they have similar view in terms of adequacy of research fund, company weaknesses and threats, contingency plans, presence of political influence. The managers think that the companies do not have enough retained earnings and these should not be distributed among stockholders, but the stockholders thinkotherwise. Managers always perceive that they are underpaid whereas stockholders express the opposite view. Each group believes that it is the other group that dominates the decision-making. Both the group wants to have mutual interaction but stockholders want to interact more than the mangers. The study noted that corporate managers’ tenure is more with the company than a stockholder’s holding of stock. The study also found that the managers are better educated than the stockholders. The study observed serious gender biasness both in management position and stockholding of the corporations. Though both the groups belong to same age level but their distribution shows stockholders enter into the share market at an early age.

Development is a process of achieving a right balance between economic growth and psychic income growth. A foreign investor’s manner of conducting business in a country could result in any of four scenarios in which economic/psychic income is low/inadequate, high/inadequate, low/adequate, or high/adequate. Foreign investment will contribute to development only if it reflects the fourth scenario. A responsible corporation can contribute to money income and more importantly to psychic income of a company’s workers. This paper examines the corporate responsibility performance of Indian and Chinese investments in Zambia’s mining sector. The paper finds that while Chinese companies seem to be operating close to the first scenario, Indian companies are operatingbetween the first and fourth. Thus, neither of them is contributing to true development.

Indonesia is developing greater opportunities for CSR activities, along with some obstacles and constraints. Unlike the Western world, one of the important drivers of CSR in this country is the importance of avoiding conflict. The agribusiness company JAPFA is very keen to promote CSR activities, not only to benefit the needy, but also for the survival of the organization in a very dynamic and turbulent market. This study elaborates how the JAPFA CSR program benefited the community around the company’s strategic business unit operations, and what kind of return the company received. To give a wider perspective on CSR activities in Indonesian organizations,the study also investigates employee commitment to JAPFA, its corporate culture, and employee attitudes toward social responsibility.

This article argues that the key crisis that has overtaken today’s global economy is the classical capitalist crisis of over-accumulation. Reaganism and structural adjustment were efforts to overcome this crisis in the 1980s, with little success, followed by globalization in the 1990s. The Clinton administration embraced globalization as the “Grand Strategy” of the United States, its two key prongs being the accelerated integration of markets and production by transnational corporations and the creation of a multilateral system of global governance, the pillars of which were the World Trade Organization, the International Monetary Fund and the World Bank. The goal of creating a functionally integrated global economy, however, stalled, and the multilateral system began to unravel,thanks among other things to the multiple crises created by the globalization of finance, which was the main trend of the period. In response partly to these crises, partly to increasing competition with traditionally subservient centre economies, and partly to political resistance in the South, Washington under the Bush administration has retreated from the globalist project, adopting a nationalist strategy consisting of disciplining the South through unilateralist military adventures, reverting to methods of primitive accumulation in exploiting the developing world, and making other centre economies bear the brunt of global adjustments necessitated by the crisis of over-accumulation.

Milton Friedman’s famous comment on Corporate Social Responsibility is that “there is one and only one social responsibility of business—to use its resources and engage in activities to increase its profits so long as it stays within the rules of the game.” I reply to Friedman, Michael Jensen, and others, in argument that accepts their implicit premise—that business can be a virtuous mechanism of free society—but that denies their delimitation of responsibility. The reply hinges upon precisely the virtue of “freedom” these authors clearly consider intrinsically valuable. In the extreme case where maximizing profits would place government underthreat, such activity will not coincide with maximizing social value and would undermine the freedoms these authors claim to value. Responsibilities will also apply in less extreme cases, if we develop Amartya Sen’s argument showing that, “we have to see individual freedom as a social commitment.”

This paper distinguishes norms for corporate responsibility in developed and developing countries. In the former, corporate responsibility should reflect “ Third Way” values of restoring individual responsibility and social relationship, and these can be achieved through stakeholder engagement. Since stakeholder engagement often presumes an adequate level of individual rights and rule-governed behaviour, it is incompatible with the current political and cultural characteristics of developing countries. This paper suggests that the end of CR initiatives in developing countries is to promote stakeholder rights and good governance, while the means is through stakeholder empowerment.

Greatly aided by an information age in which protesting laborers in a remote offshore outpost can capture front page headlines around the globe, theSarbanes-Oxley Act of 2002 (SARBOX) has made corporate transparency the linchpin for good corporate governance. Under a SARBOX-enhancedregulatory framework, publicly traded corporations are required to rapidly disclose material changes in their financial conditions or operations—changes such as impairments to goodwill, a trademark, or some other intangible corporate asset. Especially challenging for multinational corporations (MNCs) with far-flung corporate empires is the need to stay abreast of the ebb and flow of goodwill, at a time when transnational human rights groups are aggressively mobilizing world opinion against the sweatshop labor conditions that abound at the offshore production sites favored by MNCs. The author explains why the convergence of a digital age of free-flowing information and the advent of SARBOX, a legislative enactment of paraenetic design, is causing the boards of MNCs to more critically evaluate the long-term costs of their offshore operations.

The paper examines the issue of corporate social responsibility (CSR) against the backdrop of its self-regulatory posture. Using the African experience as a case study, the paper observes that the activities of multinationals show very clearly that they are grossly irresponsible despite their professed self-regulation. Instead, the multinationals have created an image of terror due to their deep-rooted involvements in human rights abuses, environmental degradation, tax evasion, bribery, market manipulation, and other forms of unethical practices, notwithstanding their so-called self-regulation. The paper concludes by advocating the establishment of a broad-based United Nations Global Business Regulatory Agency to fully take charge of corporate regulation in the global business terrain.

Conflicts of interest can lead experts to give biased and corrupt advice. Although disclosure is often proposed as a potential solution to these problems, we show that it can have perverse effects. First, people generally do not discount advice from biased advisors as much as they should, even when advisors’ conflicts of interest are disclosed. Second, disclosure can increase the bias in advice because it leads advisors to feel morally licensed and strategically encouraged to exaggerate their advice even further. As a result, disclosure may fail to solve the problems created by conflicts of interest and may sometimes even make matters worse.

This paper reviews the experience of an integrated approach to CSR in the U.S. electric utility sector. The authors report on the results of Southern Company’s historical definition of CSR as a dynamic model, balancing stakeholder needs through shifting pressures to assure long-term shareholder value, superior customer, price performance, and sustainable economic development. Using financial and utility sector measures, the paper assesses the company’s “balancing” approach to addressing CSR, which weights corporate, environmental, community, and economic factors in driving successful and sustained financial, social, and environmental performance. The paper concludes by suggesting that CSR success in this sector requires, first, that the global warming issue be governed by the same balancing considerations to which all stakeholders and their legitimate interests are subject, and second, an energy policy that embraces both atechnology policy and appropriate regulatory incentives.

The cement industry is one of the most energy-intensive industries and among the largest CO2 emitters. Cement industry emissions in China have attracted particular attention, due to the country’s rapid growth. Yet few local Chinese cement companies have corporate social responsibility (CSR) programs, and even fewer have environmentally related CSR programs. This paper studies the environmentally related CSR practices in mainland China of two companies: Lafarge, a multinational cement company, and Shui On, a Hong Kong-based construction company and developer. We are interested in examining if there are differences in their environmentally related CSR practices, especially those related to emissions, in industrialized countries and Hong Kong on the one hand andin mainland China on the other—given that environmental regulations on the mainland are lax and an awareness of global climate change is largely nonexistent. Our intention is to investigate the influence of the CSR practices of multinational enterprises (MNEs) on the local Chinese cement industry, because they could be regarded as an effective vehicle to improve CSR awareness and practice in the Chinese cement industry and to help alleviate the industry’s impact on global climate change. We found that beneficial knowledge transfer from MNEs to local companies has not gone beyond improving production technology and management methods to the point of influencing CO2 emissions. Lafarge China and Shui On Cement announced a joint venture partnership during the course of our case study, and we examine whether this venture may have an impact on emission-related CSR practices in the Chinese cement industry.