CSR in Development – Myth or Magic? 2010

An Overview

CSRD

13 September 2010

Introduction

Course Aims & Outline Geographical & Industry Focus Theoretical Perspectives Exercise: CSR? Development? CSR & Development:

An Overview

Introduction Associate Professor, CBDS & CSR, CBS Ph.D. in Business Economics, CBS, 2004 SMEs and CSR Southern Africa BDS network coordinator www.bdsnetwork.cbs Research and Consultancy Work:

CSR in Uganda - 2008 Impact of Codes of Conduct on the Working conditions in the clothing

industry in Southern Africa 2008- Changing Course: Responsible Supply Chain Management 2010 (with

Global CSR)

Introduction The student group

Study program affiliationFrom CBS or other universitiesCountriesEngagement in CSR in developing countries

Course Aims

Learning Aims Understanding CSRD Concepts Strengths and Weaknesses Cultural and Social Contexts Implications

Firm Profitability Workers’ Conditions Environmental Conditions

Course Outline

Structure Overview: CSR in Development (anno 2010) Cross-Cutting Themes

Impact Assessment Participation

Current Topics Codes of Conduct, Ethical Trade, GVCs, SMEs

Summary & Integration Future Research, Policy & Practice Challenges

Course Outline

Exam Knowledge of Entire Curriculum! Written Exam: Paper (essay) – max. 10 pages.

Only One Type of Exam! Abstract, Clear Line of Argument, Substantiated

by Evidence, Sufficient Use of References, Solid Conclusions, Future Implications

Deadline: 30 November 2010

Course Outline

Teaching Methods Practice to Theory! Case Studies, Hands-on Exercises,

Group Discussions, Video Clips, Guest Speakers

Geographical Focus Developing World Mostly Asia Also (Southern) Africa and (if demand) Latin America

Theoretical Perspectives

Mainstream Business Perspective Rhetoric: What can X, Y,Z CSRD topics do for

companies, workers and the environment?

Critical Perspectives on CSRD Underlying assumptions What is (not) considered? Who is included/excluded? Actual vs. Postulated Impacts? What Works Here vs. There?

Theoretical Perspectives

Impact Assessment Postulated vs. Actual Effects of CSRD Approaches: PPPs, Ethical/Fair Trade, CSR in Clusters Issues: Homework, Child Labour, Working conditions

Participation Mismatch Who participates when, how, where & why?

Global Value Chain Mapping From Northern Consumers to Southern Beneficiaries Are Good Intentions Translated into Real Benefits?

Questions

What is Corporate Social Responsibility?

What is Development?

Why CSR Now? Changing Global Context (Haufler 2006)

CSR Not New! Deregulation, Privatization, Liberalization Outsourcing, Concern About Globalization Technological Developments, Media Reports Corporate Accountability Movement

Rise of Private Authority Self-Regulation, Co-Regulation Multi-stakeholder Dialogues, Public-Private Partnerships Industry Codes/Guidelines, Standard Setting Organizations, etc.

What is CSR?

”CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. Stakeholders exist both within the firm and outside. The aim of social responsibility is to create higher

and higher standards of living, while preserving the profitability of the corporate, for its stakeholders

both within and outside the corporation” Hopkins 2006, p. 9

Or is CSR….

Greenwash The phenomenon of socially and environmentally

destructive corporations attempting to preserve and expand their markets by posing as friends of the environment and leaders in the struggle against poverty.

Rebranding, forming front groups, lobbying governments, suing critics for lying, spying on the enemy etc

Or is CSR…

Bluewash Corporations that wrap themselves in the blue flag of the

United Nations in order to associate themselves with UN themes of human rights, labor rights and environmental protection. Bluewash is typically associated with ”corporate humanitarians" trying to weaken UN agreements, in favor of voluntary, toothless codes of conduct regarding social and environmental issues.

or is CSR?.... A Cultural Imposition?

”The West has huge double standards. All these programmes for children, it is all one big tamasha (performance). They have managed to develop their own nations, but when it comes to us, they want to keep us in chains. The U.S. is a nation with a history of genocide and slavery and they suddenly feel sympathy for the children of Pakistan. Now they are champions of peoples’ rights. But when I ask my buyers to make concessions over the rates they will pay, they refuse.”

Ali Shabbir, Ali Trading, A Sialkot Soccer Ball Exporter

Why Engage in CSR?

Business Case for CSR (Hopkins 2006) It Pays Off Financially To Be Responsible

Company Reputation Access to Finance Employee Motivation Innovation License to Operate Preferred Consumer Choice Avoiding Race to the Bottom etc.

CSRD: Is It Magic?

CSRD Supporters (Hopkins 2006) UN, World Bank, IMF, WTO Have Failed Corporations More Powerful The Solution?

A Useful Tool for Economic Development ”CSR Provides A Platform For Corporations to Be

Involved in Economic Development in Ways That Can Be Much More Powerful than hitherto thought of”

CSRD: Is It Magic?

CSR = Avoiding ’Race to the Bottom’ That is, locating production in Site with Lowest

Common Denominator In Terms of Wages, worker conditions, shoddy products, disrespect

for human rights, outrageous demands on environment etc.

CSR Has Positive Potential Adequate wages, better environment, etc. Better governance -> reduced transaction costs Human rights policies -> Worker dignity, higher productivity Consumer boycott of irresponsible companies

CSRD: Is It Myth?

CSRD Sceptics (Frynas 2008) Lack of Empirical Evidence

Micro-case Studies ”CSR May Work For Some People, in Some Places,

on Some Issues, Some of the Time”

Analytical Limitations Only Focus on Positive Impacts Narrow Research Focus

CSR: Improve Profits and Stakeholder Management CSR: Overlooks Beneficiary Participation

CSRD: Is It Myth?

CSRD Sceptics (Frynas 2008) Business Case for CSR

”It Makes Financial Sense to Engage in CSR” What About Instances When CSR Not Profitable?

Unresolved Governance Questions Corporate Governance

Short-Term Shareholders, Long-Term Dev. Impacts

Societal Governance CSR: Micro-Impacts vs. Macro-Impacts

What Is Development?

Development Confusion? Hopkins (2006)

Maximizing Economic Growth, Addressing Population Growth, Urbanization, Health, Education, Basic Needs, Governance, Corruption etc.

Frynas (2009) Income Distribution, Value Creation, Poverty etc.

SJ Critique CSRD Supporters/Sceptics Do Not Define CSR

and Development Concepts Clearly

What is Development?

How To Relate CSR & D? What Part of CSR? Relates to What Kind of Development?

4 Types of Partnerships (Reed and Reed 2009) Conventional Business Corporate Social Responsibility Corporate Accountability Social Economy

CSR and Development

Four Types of Development (Reed and Reed 2009)

The Neo-liberal ApproachThe Capabilities ApproachThe Human Face ApproachThe Social Power Approach

CSR and Development

Next Session (Week 38)

CSR Impact Assessment Hamann 2007: What We Know Witte & Reicke 2005

UN PPPs: Why Impact Assessment Is Important

Utting & Zammit 2009 Impact Assessment: Seeing the Bigger Picture

Lund-Thomsen 2009 Politics of Impact Assessment Case of Kasur Tanneries