CCGL9018

Corporate social responsibility

Topic two
CSR Collaboration

fall, 2019
Hong Kong, China

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 Introduction

• Social issues have been more commonly associated with

responsibilities of governments and non-government organizations
(NGOs) than with business. However…
– Corporations increasingly replacing government action
– NGOs play active role as watchdogs, promoters of best practice
or active partners of businesses

• Blurring of boundaries between traditional sectors

– Commercialisation and marketisation of the nonprofit sector
– Corporations adopting a more social and political role

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Tripartite Partnership

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 What is NGO?
Generating profits Measure through
vs. Protecting public profits vs. Measure
benefit or promote through the impact of
social changes the organisation in
terms of objectives

Distribute among
members vs.
Advance the Shareholders as the
organisation’s main stakeholder
objectives group vs. Many and
varied stakeholders,
each with a
legitimate interest in
Accountable to public sector entities,
shareholders with regard but not necessarily
to the triple bottom line with any ‘ownership
vs. Fiduciary rights’
responsibility as
intermediates between
donors and beneficiaries,
and the general public
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 Business-NGO Collaborations

• CSR initiatives are often in collaboration with NGOs: Collaboration

structures should align with the company’s CSR objectives and operating
context.

• Corporate Involvement Continuum: Philanthropic (traditional donations)

è Transactional (donations around specific activities, e.g. percentage of
sales) è Integrative (joint venture) (Austin, 2000).

• Objectives behind Business-NGO collaborations influence types of

collaborative relationships:
– Altruistic criteria e.g. donations to communities
– Business case e.g. reputational benefits
– Collaboration can lead to new competencies, e.g. NGOs as an external source of
specialised skills and knowledge.

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Tripatite Collaborative Model

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 iEnterprise Project

• i-Enterprise, a privately-owned Work Integration Social Enterprise

(“WISE”), can be regarded as a quite successful case.
• Established in 2012, with tiny amount of start-up capital of HKD
40,000, i-Enterprise operates a call center to provide “1083”
hotline service for Hong Kong Boardband Network (“HKBN”).
• With the great support of Hong Kong Rehabilitation Power (“HKRP”)
a non-governmental organization (“NGO”) that serves more than
2,000 disabled members in Hong Kong, the i-Enterprise project is
able to provide employment opportunities to around 15 disabled
personnel.
• Encouragingly, the Project has achieved break-even in 6-months
and every employees can enjoy above-market compensation.

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More Examples

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 How Should Firms Collaborate for
CSR? 4 Strategic Factors
1. Focused Contribution: Single Firm - Single NGO
– Objectives: Differentiate brand from competitors; focused social impacts;
respond to NGO activism.
– Characteristics: Limited resource requirements; protects intellectual property of
the firm; temptation to focus only on PR benefits.
– Example: Unilever / Rainforest Alliance.

2. Shared Contribution: Multi-Firm - Single NGO

– Objectives: Protection / promotion of industry legitimacy; address infrastructure
voids.
– Characteristics: Promotes innovative culture of the firm; reputational benefits to
competitors equally, requires trusted competitors.
– Example: Caterpillar / General Motors / White Martins / Piracicaba 2010.

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 How Should Firms Collaborate for
CSR? 4 Strategic Factors
3. Diffused Contribution: Single-Firm - Multi-NGO
– Objectives: Address threats to firm legitimacy from a number of sources;
differentiate brand from competitors; access new markets.
– Characteristics: Broader social / environmental goals met simultaneously;
encourage NGO investment in firm innovation; increased management resources
to disparate NGOs.
– Example: Starbucks / Global Exchange / Oxfam / Oaxacan / State Coffee
Producers Network / Ford Foundation.

4. Communal Contribution: Multi-Firm - Multi-NGO

– Objectives: Address complex threat to industries; consensus of priorities across
numerous, powerful social actors; geographically dispersed social impacts.
– Characteristics: Integrate perspectives from multiple, powerful stakeholders;
significant management resources and expertise required; potential for free-
riding.
– Example: Nike / Eddie Bauer / Nordstrom / Fair Labour Association / Human
Rights First / Fedueration of Workers in Philippines / Cambodian Labour
Association.
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 Evolving Motivation

Collaboration level

Risk
Philanthropy Strategic Structural
mitigation

Impact Level

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 Opportunities – NGO Perspectives

• Funding
• Management and technical expertise
• Influence company’s behavior
• Innovations
• Increase scale and impact by resources leveraging
• Creditability

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 Opportunities – Business’
Perspectives
• Improved community relationship
• Access to new market
• Innovative products
• Grass roots presence and social insights
• Sustained effort even beyond partnership
• Enhance brand image
• Tax benefit

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 Challenges for NGO-Business
partnership

• Power imbalance
• Value vs profit motive
• Cultrual clash
• Fund driven
• Priority mismatch
• Lack of common language

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 Tips for partnership development

• Establish credibility preferably through third party accreditation

Organizational capacity
Governance
Organizational credibility Human resources
Vision/Mission
Community level Network and
Value
Donor level collaboration
Ideology
Structure
Structure
• Third party System
Process
accreditation Process
Policies
Scale
sustainability

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 Points to be considered during
partner selection

• Shows respect for the NGO’s values, initiatives,

and competencies
• Value transparent communication
• Views NGO as an equal partners
• Alignment of corporate objectives with NGO
objectives – cause alignment

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 Points to be considered during
partner selection
• Initial exploration & assessment
– Understand company’s business and social goal
– Assess companies performance in terms of
responsible business
– Identify company’s core competency that will
contribute to partnership
– Assess the company’s commitment
– Identify the benefits sought by the company

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Partnership development
Partnering need assessment
Scoping/mandating

Identification of potential partners

Partner assessment

Formulating terms and commitments

Formalizing and institutinalizing

Project execution
Partnership management

Project progress review

Partnership review
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 Why Governments support CSR
The respective business efforts can help to meet policy objectives on a
voluntary basis. (e.g. environmental protection, human right, and socially
responsible investment)

CSR policies are regarded as an attractive complement for hard-law

regulations in cases where new regulations are politically not desirable or
infeasible

The soft approach of CSR policies coincides with a broader transition of

public governance altogether, which leads away from hierarchical regulation
towards more network-like and partnering modes of self- and co-regulation

CSR is concerned with managing business relations with a broad variety of

stakeholders, the concept obviously reshapes not only management routines
but also the roles of, and relations among, businesses, governments and civil
society

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 CSR-Government Relations
1. CSR as Self-Government: Corporate discretion independent of but
alongside government
– Mechanism: Absence of coordination, disconnection or coincidence of private
and public initiatives
– Corporate influence: Strong (Little state interference in CSR initiatives)
– Influence of legal framework: Weak (CSR ‘beyond law’)
– Illustration: Philanthropic contributions to society, strategic CSR

2. CSR as facilitated by Government: Governments provide incentives for

CSR or encourage CSR through rhetoric
– Mechanism: Ex ante governmental influence through the design of incentive
systems and ex post encouragement through rhetoric
– Corporate influence: Strong – medium (Governments contribute, but mainly
corporate driven)
– Influence of legal framework: Medium (CSR shaped by legal intervention)
– Illustration: Government subsidies, tax expenditures, etc.

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 CSR-Government Relations
3. CSR as partnership with Government: Governments and business
organizations (and often civil society) combine their resources and objectives
– Mechanism: Various modes of coordination and interaction of government and
business resources and strategies
– Corporate influence: Strong – medium (State likely to influence weakly the content
and strongly the process of CSR initiatives)
– Influence of legal framework: Medium (Indirect mobilization of the legal framework
for shaping CSR)
– Illustration: Multi-actor institutions to deliver social goods or norms/ codes using
some governmental resources (as above)

4. CSR as mandated by Government: Governments regulate for CSR

– Mechanism: Ex ante governmental framing of CSR initiatives through the control of
outcomes or disclosure
– Corporate influence: Medium – Weak (State likely to influence strongly the content of
corporate CSR initiatives)
– Influence of legal framework: Strong (CSR shaped by the legal framework; direct
form of ‘CSR through law’)
– Illustration: French law on social reporting (NRE); UK Companies Act amendment
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 CSR-Government Relations

5. CSR as a form of Government: Firms act as if they were governments

where there are government deficits
– Mechanism: Firm level or through stakeholder processes/ institutions
– Corporate influence: Strong (State power vacuum, delegation or substitution by
CSR)
– Influence of legal framework: Weak (Corporations act as government ‘CSR for
law’)
– Illustration: CSR in pre-welfare state; post-privatization; global governance; new
/ ‘wicked’ issues.

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 CSR initiatives Vs Law

Strengths
Limitations
Command-and-control regulatory
Inconsistent and inadequate
approaches articulate societal
implementation and enforcement
positions on important issues;
Tendency toward very inflexible
Command-and-control approaches
and formal approaches that can
have made considerable progress
lead to adversarial and legalistic
in improving the lives of people
behavior
around the world

The new approaches should be applied as supplements

to the laws, not as replacements for them. In some
cases, they may act as precursors and sometimes
industry asks that these voluntary initiatives become
law. 24
CSR-Government Configurations in
Western Europe and East Asia

• Western Europe: CSR as self-government è CSR as

mandated by government è greater emphasis on less
restrictive and binding CSR-government configurations.

• East Asia: CSR as mandate still prevails, but evidence

of other configurations emerging to tackle new CSR-
related problems.

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 Conclusion

• The role of NGOs and governments in CSR.

• How should firms collaborate with NGOs to achieve their CSR
objectives.
• Different ways CSR is related to the practices of government.
• Conceptual understanding of the range of relationships between
CSR and government: (1) CSR as self-government; (2) CSR as
facilitated by government; (3) CSR as a partnership with
government; (4) CSR as mandated by government; (5) CSR as a
form of government.
• Different CSR-government configurations have emerged in Western
Europe and East Asia.

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