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1. International Corporate Responsibility Series: Volume > 2
Ian Maitland Corporate Codes of Conduct: On the Virtue of Modesty
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What are international codes of conduct for? The broad support for such codes masks fundamental differences about their purpose. Corporations see codes of conduct as regimes for regulating their relations with their suppliers in developing countries and—not least—to counter negative publicity. For labor and human rights activists, on the other hand, codes of conduct are levers for forcing positive change in global labor and environmental standards. Here I consider two areas typically covered by codes of conduct—wages and child labor—and identify some of the dangers of using codes to force change. If low wages or child labor are the result of poverty, and can’t be fixed by enlightened corporate policies, then codes will at best leave the underlying problems untouched and at worst will aggravate them. I conclude that we should be cautious about using codes to force higher standards.
2. International Corporate Responsibility Series: Volume > 2
Bryane Michael How Involved Should the World Bank Be in International Corporate Responsibility Programs?: A Qualitative Exploration of Optimal Program Provision
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The growth of popularity of International Corporate Responsibility (ICR) has brought several international organizations into the ICR “industry”—notably the World Bank. The World Bank sees its ICR activities as public goods which make up for under-provision by the market due to market externalities. Yet, ICR also benefits the Bank. The optimal level of World Bank involvement will depend on the degree to which it provides public goods and increases the quality of non-perfectly competitive markets where ICR activities may be under-provided. The optimal level of World Bank ICR project provision is discussed and policy issues are raised.
3. International Corporate Responsibility Series: Volume > 2
Benjamin J. Richardson Corporate Finance and Environmentally Responsible Business
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The financial services sector has the potential to be an important driver for improved corporate social and environmental responsibility through its control over corporate financing. But, so far, only ad hoc policy initiatives have arisen in the European Union and other countries. Because the financial services sector is where wholesale decisions regarding future development, and thus pressures on the environment, arise, the reform of investment and banking services to promote long term investment and better consideration of environmental impacts may be an effective way to promote sustainable development. Reforms such as corporate environmental reporting requirements and lender liability for borrowers’ environmental harm, are some of the ways by which an institutional framework for mobilising financial organizations as instruments of environmental regulation could be constructed.
4. International Corporate Responsibility Series: Volume > 2
James K. Rowe, Ronnie D. Lipschutz Corporate Codes of Conduct as a Global Business Strategy
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We argue that Corporate Social Responsibility (CSR), particularly corporate codes of conduct, has been one of global business’s preferred strategies for quelling popular discontent with corporate power. By “business strategy” we mean organized responses, through organizations like the International Chamber of Commerce (ICC), to the threat that public regulation poses to business’s collective self-interest. Attention to CSR’s historical development reveals it has flourished as discourse and practice at times when corporations became subject to intense public scrutiny. In this essay we outline two periods of corporate crisis, and account for the role codes have played in quieting public concern over increasing corporate power: 1) When developing countries along with Western unions and social activists were calling for a “New International Economic Order” that would more tightly regulate the activity of Transnational Corporations (1960–1976); and 2) When mass anti-globalization demonstrations and high profile corporate scandals areincreasing the demand for regulation (1998–Present).
5. International Corporate Responsibility Series: Volume > 2
Jayraj Jadeja, Bharat R. Shah, Preshth Bhardwaj Codes of Business Conduct: Pharma Marketing at a Brossroads?
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In a perfect world, physicians and drug producers would have only one goal: to advance the health of their patients. Unfortunately, ours is not a perfect world. While every physician’s prime responsibility—by oath and by law—is to the patient, every pharmaceutical producer’s first and foremost obligation, by design, is to shareholders and employees. Their ultimate objectives are diagonally diverse. This situation calls for a code of ethics to govern the marketing and prescription of pharmaceuticals. This paper attempts to identifythe business practices prevailing in the Indian pharmaceutical industry, in order to provide a basis for constructing an appropriate code of ethics. The research is based on surveys or in-depth interviews of physicians, patients, retail pharmacists, and drug manufacturers.
6. International Corporate Responsibility Series: Volume > 2
A. Adewole Asolo-Adeyeye New Global Business Moral Order and Business Activities in Developing Countries: The Nigerian Experience
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Given the overwhelming expansion of globalization that has reduced the entire globe to a small village, especially in international business activities, there is a pressing need to design a new paradigm of moral rules for global business, in order to take care of emerging moral exigencies in corporate activities—especially multinational activities, which have grave cross-cultural moral implications. While the international business arena has addressed this new reality by fashioning various moral orders to guideactivities in the international business scene, this paper observes that the developing countries of the world have been at the receiving end of the moral configuration of global business. This is why the responses of most developing countries to the global business moral order is predicated on resolving the apparent conflicts generated by this moral order vis-à-vis the value systems of individual countries. Specifically, the paper examines the issue of a global business moral order with particular focus on how it is faring in developing countries. It notes that in these countries, the moral order is merely a paper tiger due to its weak implementation framework, whenceits inability to make any meaningful impact in developing countries. After a critical survey of the Nigerian business terrain, this paper concludes that the global business moral order barely impacts the Nigerian situation despite the promise of better, honest, fair, and sustainable business practices implied by corporate social responsibility.
7. International Corporate Responsibility Series: Volume > 2
Susanne van de Wateringen The Petroleum Industry and Reputation: Developments in Corporate Reputation Over the Period 1990-2002
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A good reputation is one of the most valuable assets a company can have. A problematic reputation can hinder companies in their performance. In competitive markets where products differ little in price, technology, or availability, reputation can make a difference. Petroleum companies are frequently associated with environmental issues such as oil spills and climate change. Since environmental performance rankings remain inconclusive due to methodological shortcomings, those issues may affect the sector’s reputation. This paper examines whether the observation of a problematic reputation for multinationals in the petroleum sector is sustained by empirical data for the period 1990–2002. Taking in account methodological limitations, the analysis shows two downward trends for all companies, indicating a common reputation effect. The effect of catalyst events is observed for individual companies. However, the contribution of the paper is not only empirical. Conceptually, the results show the complexity of measuring the multidimensional concept of reputation, as well as the importance of the reputation commons, catalyst events, and a reputation mechanism.
8. International Corporate Responsibility Series: Volume > 2
Roy W. Smolens, Jr., Nicolaas Tempelhof Cultural Perspectives of CSR Opportunities for German Firms in Poland
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This chapter examines cultural issues related to corporate social responsibility (CSR) as practiced by German firms operating in Poland. Recognizing the interdependence of a corporation’s social and financial performance, the chapter attempts to analyze how German firms can increase profit through good social performance. However, implementing CSR measures requires detailed knowledge of Polish society and culture. Behavior and attitudes must be considered to understand a company’s CSR target group andachieve the desired financial return from investments in CSR. The authors characterize the most profitable types of CSR initiatives available to firms operating in Poland.
9. International Corporate Responsibility Series: Volume > 2
Rae Weston A Analysis of Corporate Governance Issues for Large Japanese Multinationals Seen Through the Prism of Three Recent Cases
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This study examines the three major Japanese multinational corporate governance cases of the past decade: Sumitomo Copper, Daiwa Bank, and Mitsubishi Motors. The analysis focuses on three particular matters: Does senior management and the board exhibit a form of “disaster myopia”? Were there clear signs of the impending problems that were ignored? Is there anything distinctive that makes these cases Japanese in character? The first two questions are answered in the affirmative for all three firms, but only the Mitsubishi case exhibits a peculiarly Japanese characteristic.
10. International Corporate Responsibility Series: Volume > 2
Ans Kolk, Jonatan Pinkse The Evolution of Multinationals’ Responses to Climate Change
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Climate change is one of the environmental issues that has increasingly attracted business attention in the course of the 1990s. Multinationals have developed different strategies over the years, initially more political, nonmarket in nature, but currently also market-oriented. This article examines the evolution of multinationals’ responses to climate change, paying attention to both market and non-market components. It first gives an overview of the main policy developments, followed by a characterisation of non-marketand market responses, based on a survey among the largest multinationals worldwide. The chapter also reflects on overall corporate responses to climate change, paying attention to the influence of the policy contexts on emergent market strategies, and taking respondent characteristics regarding country of origin and sector into account.
11. International Corporate Responsibility Series: Volume > 2
Laura Radulian Marketing of Harmful Products
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The paper focuses on the rapidly evolving concept of “harmful products” and its connection with marketing practices. It examines (a) products generally recognized as harmful, and (b) innocuous products that are sometimes (unintentionally) transformed into harmful ones by marketing activities. We indicate how the effects of these activities depend on individual perceptions as well as the norms of social and business ethics. We advocate the creation of marketing codes of ethics for particular product categories, as well as the dissemination of product information that can link the ethical codes with individual values. We illustrate these concepts with a case study of the fragrance industry and olfactory marketing.
12. International Corporate Responsibility Series: Volume > 2
Vivien T. Supangco Exploring Organizational Determinants and Consequences of Contingent Employment in the Phillipines
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This study looks into the factors that foster the use of contingent employment in the Philippines, and its consequences. It also explores the relationship between corporate social performance and the nature of contingent employment. Results indicate an inverse relationship between levels of social performance and utilization of contingent employment. There is a direct relationship between the size and intensity of utilization of temporary employees and the combined effects of unionization and total employment size. Publicly listed companies exhibit higher utilization of temporary employees. However, factors that foster the use of project employees need tobe explored further. Benefits are influenced by the intensity of utilization of contingent employees. Formalization of the use of contingent employees tends to blur the difference between casual and regular employees. The use of subcontracting positively influences the number of benefits provided and diminishes the differential benefits between regular and project employees. Unionization, however, tends to increase the differential benefits between regular employees and project employees.
13. International Corporate Responsibility Series: Volume > 3
Preface
14. International Corporate Responsibility Series: Volume > 3
Asolo Adeyeye Adewole Corporate Social Responsibility, Self-Regulation, and the Problems of Unethical Business Practices in Africa: A Case for the Establishment of a United Nations Global Business Regulatory Agency
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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.
15. International Corporate Responsibility Series: Volume > 3
Rama B. Rao Good Corporate Governance Initiative to Ensure Corporate Social Responsibility: A Study of the State of the Art in Rwanda
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Rwanda is recovering from the trauma of the 1994 war and genocide but continues to have a weak corporate and industrial infrastructure. Against this background, the present study was undertaken with the aim of tracing to what extent Rwandan enterprises are geared for the fulfillment of social responsibility within a strained socioeconomic milieu. The objectives of the study are to review the concept of corporate governance and its relation to corporate social responsibility (CSR), to describe the current state of corporate governance in Rwanda, to establish the relationship between corporate governance and CSR and standard ethical practice, and to suggest solutions for problems encountered in the system.
16. International Corporate Responsibility Series: Volume > 3
Junwei Shi, Haiyan Fu, Lijun Hu Social Responsibility, Social Capital, and Corporate Competitive Advantage in Transitional China
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In this paper, we analyze the impact of interaction between corporate social responsibility (CSR) and corporate social capital on corporate competitiveadvantage in a transitional context. Using survey data of Chinese companies, we examine the theoretical relationship empirically. Results show that CSR has no direct association with corporate financial performance or organizational reputation. However, corporate social capital can very much magnify the impact of CSR in a transitional context. Specifically, the social responsibility of a firm with higher social capital is more positively related to organizational reputation than that of a firm with lower social capital, and this expands the theory of CSR. We present the strategic implication that the interaction between CSR and social capital improves corporate sustainable advantage.
17. International Corporate Responsibility Series: Volume > 3
Douglas K. Peterson Partner Selection for Corporate Social Responsibility Efforts: The Case of Choosing NGO Partners
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The objective of this paper is to suggest types of analysis that can help managers effectively choose NGO partners that help them meet their international corporate sustainability and social responsibility goals. NGO partner choices should offer a good fit to corporate goals/objectives and create opportunities to reap the benefits of social responsibility and sustainability efforts, which include public image, environmental protection, customer and stakeholder satisfaction, employee morale, and (most importantly) the completion of work that serves a social responsibility or sustainability goal. Examples of this type of goal include providing income generation activities for persons with HIV/AIDS, and educational opportunities for people who would not normally get them. The paper exploresthree lenses through which partner choice may be viewed: agency theory, transaction cost economics, and resource dependency. Areas for further exploration are suggested, and a comprehensive research agenda/model is discussed.
18. International Corporate Responsibility Series: Volume > 3
Eric Palmer Corporate Responsibility and Freedom
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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.”
19. International Corporate Responsibility Series: Volume > 3
Runa Sarkar Policy Approaches to Induce Corporate Social Responsibility in Public and Private-Sector Firms in Developing Countries
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Corporate social responsibility (CSR) concerns the realm of business behavior in which the firm tries to effectively manage its business and non-market environment interface. Coerced CSR refers to taking socially responsible action in response to or in anticipation of retaliation in some form (boycott, adverse publicity, introduction of regulatory laws, etc.) from interest groups who are not directly part of the market to which the firm caters. In contrast, strategic CSR or altruistic CSR refers to socially responsible activities undertaken out of enlightened self-interest. The focus of this paper is to understand whether the impact of coercion is different for government-owned organizations and privately owned firms in developing countries. Activities that are in response to or in anticipationof threats by interest groups are identified and compared across publicly and privately owned firms, against the backdrop of weak enforcement of fairly stringent environmental regulation. We then generalize our observations and attempt to distinguish the intensity of pressures felt by public and privately owned firms and their speed of response. As a result of this understanding, we attempt to suggest specific policy mixes for various types of industry, depending on whether they are dominated by the public sector or private sector.
20. International Corporate Responsibility Series: Volume > 3
Jeanne M. Logsdon, Harry J. Van Buren III National Styles of Corporate Social Responsibility: Exploring Macro Influences on Responsible Business Behavior
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While the literature on corporate social responsibility (CSR) suggests that its form and content differ at least somewhat from country to country, it has not begun to address whether CSR practices converge or diverge over time as countries benefit from higher levels of economic development, or whether these practices relate to specific cultural values and institutional structures. This paper proposes an initial conceptual model and propositions to begin to assess whether and how the different levels of economic development, cultural values, and institutional structures influence CSR behaviors. Mediating variables related to industry sector and executive moral development are also included in the model. The paper begins to lay the groundwork for empirical country and regional studies that cancontribute to a greater understanding of the factors that influence CSR behaviors.