OF BUSINESS

This chapter provides guidance on the best approaches to consulting in the area of corporate social responsibility, social responsibility of business, or corporate citzenship (these terms will be used interchangeably in this chapter). This is a new and difficult area of consulting, which addresses fundamental business concepts and purposes and the increasingly complex relationships of business firms with their environment. It is an area that is value-laden and controversial, where businesses have to face diverse and even conflicting interests, requirements and pressures. Its importance has grown considerably over the past decades and will continue to grow in future years.

Firms that accept that the landscape for the social role of business is changing confront many challenges. They must make up for the deficiency in existing knowledge, competence and systems around corporate citizenship management and begin to develop their capabilities. They need reliable and balanced guidelines on how to act. They therefore appreciate help from consultants in facing both policy and operational issues related to their social roles, functions and relationships, especially if the consultants can demonstrate their ability to help in preventing conflicts and crises. Part of the consultants’ role is to convince clients that social responsibility is becoming a more and more important part of business fundamentals. Consultants are called to help their clients define how they should relate to stakeholders, and take into account issues that are typically the province of the public and civil sectors. Both facets require consultants to persuade, and then guide their clients into unmapped territory and non-traditional roles. Clients and consultants alike have no less of an agenda than to redefine the concept of “business as usual”.

23.1 The social dimension of business

Some managers and consultants view the current efforts to enhance the social responsibility of business primarily as a defensive reaction to the multiple

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criticisms and pressures to which companies are increasingly exposed – a kind of public relations exercise. They feel that it is more important to be perceived as a good corporate citizen (hence to be less exposed to criticism and pressure groups) than to actually be one. If there were no criticism and no pressure groups, business could go on as usual. Numerous businesses around the world regard the consideration of their social role and responsibility – if they pay attention at all – as an academic and not very realistic concern. These views constrain their capacity both to understand the depth and breadth of the social responsibility of business and to act with foresight.

The social dimension of business, i.e. the relationships between business and society and the impact of business activity on the life and development of society, and vice versa, is not something new that has emerged in the past 20–30 years owing to factors such as the tremendous growth of power of the multinational corporations, dissatisfaction with globalization or the increasing aggressiveness of some pressure groups. Whether one likes it or not, social responsibility is inherent in any business activity. Business activity is social activity par excellence.1 Business firms are institutions of society established for producing, distributing and delivering goods and services needed to satisfy a wide range of social needs. They interact with all other social institutions and influence the lives of individuals, families and wider communities as employers, educators, organizers of joint work, sellers, buyers, taxpayers, creators and users of resources and infrastructure, investors, producers of wealth, and so on. Each of these functions has a social dimension and implications.

These truths are as old as business itself. What is relatively recent, however, is (1) the unprecedented dimension, power and role of business in global development; and (2) a new level of perception, awareness, criteria, standards and goals, and the will and capacity to take action on social responsibility issues, both on the part of business and on the part of governments and other institutions and organizations.

It should be noted that socially responsible behaviour in business is a relative concept. Its definition is influenced by geography, culture, tradition, education, political orientation, wealth, industrial dynamics, and so on. For example, countries with less developed markets and social services may expect business corporations to contribute to the creation of modern economic sectors in production and services, employment, provision of social services, education and infrastructure. In other countries, institutional and political conditions may mean that priority is given to human rights, environmental protection or ethical advertising. In countries with well-developed labour legislation and institutional mechanisms for its enforcement, companies have no choice but to comply with this legislation. Conversely, in countries with weak institutional mechanisms and public administration the demand for self-regulated corporate citizenship may be much greater.

Within countries, different businesses, social groups and societal organizations may have different expectations and apply different standards in respect of various aspects of social responsibility. Some are interested only in defending

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