Corporate Social Responibility within an International
Business Context - The case of DaimlerChrysler

by: Juliane Kuballa

Table of contents

1. Introduction - 3 -

2. Effectiveness of social and environmental accounting  - 4 -

3. Stakeholder approach as a precondition for effective SEA - 5 -

4. Development of social and environmental reporting standards  - 6 -

5. Benefits and limitations of social and environmental reporting  - 8 -

6. Examination of DaimlerChrysler’s reports - 10 -

6.1. Examination of DaimlerChrysler’s reporting about environmental issues - 10 -
6.2. Examination of DaimlerChrysler’s reporting on social and ethical issues - 12 -

6.2.1. DaimlerChrysler’s cooperation with an armaments manufacturer  - 12 -
6.2.2. Equal opportunity management - 13 -

Conclusion - 14 -

Reference list  - 15 -

1. Introduction

Discussions about corporate social responsibility of organisations began to spread already at the beginning of the 20th century. Progressive industrialisation led to the formation of many large companies which affected the life of people. This development pushed the public claim that organisations should take responsibility for the consequences of their corporate policy (Rettberg, 1999, p.30). Great progresses of ethical reporting by companies could have been noticed since the mid-1980s (Adams 2004). Nowadays annual reports of various companies refer to more ethical, social and environmental aspects than ever before (Mathews, 1997). Various organisations even publish separate financial and sustainability reports (Global Reporting Initiative, 2002). In many countries e.g. France, Australia, Denmark, The Netherlands, Norway, Sweden and the US, companies are already legally bound to provide environmental reports (Adams, 2004). However social engagement of organisations still appears on a voluntary base as well as the providing of appropriate reports. Accordingly rather rough directives developed by few organisations like the Global Reporting Initiative (GRI) are given than common compulsory guidelines for the creation of social reports. So companies have many liberties in presenting their performance in this field (Bundesvereinigung der Deutschen Arbeitgeberverbände, 2005). As a result they naturally provide only information about positive effects of their activities. Full and frank accountability is generally not beneficial for companies (Gray, 2005) so they constantly seek for ways to hide injustices in their reports to protect their well-established public image (Chwastiak and Young, 2003). In the first section of this assignment different aspects that must be considered for the creation of reports that force multinational businesses for real accountability are identified. Moreover the importance of the development of common reporting standards is pointed out. In this context especially the most important principles of the reporting guidelines published by the GRI are highlighted. The GRI guidelines were chosen as DaimlerChrysler, the multinational company which is considered in the second section of this assignment, gears its reporting issues related to sustainability to them. Moreover benefits and limitations of social and environmental auditing a multinational company will recognise are stated. Finally this assignment examines what kind of ethical, social and environmental information DaimlerChrysler discloses in its various reports and which facts are silenced or euphemised to provide a better picture to the public.

2. Effectiveness of social and environmental accounting

Adams (2004) suggests that social and environmental accounting (SEA) of organisations can provide a useful method to force businesses to take responsibility for their performance in these fields (Adams, 2004). However the current system provides possibilities for organisations to misuse secrecy to the disadvantage of various stakeholders who are directly affected by their activities (Medawar, 1976). Companies indeed report about how they raise profits but they hide negative effects caused through their profit maximization actions. Moreover in their reports they tend to illustrate injustices caused by an unequal distribution of wealth and power in a way that people should make believe to be inevitable, and balanced by the achieving of greater benefits. Thus it is important to discover silences and palliations contained in company’s one-dimensional reports. This way it will become more difficult for people to further accept the current system in which they live. As a result claims of various stakeholders for multidimensional, transparent reporting would be boosted and force organizations to meet these demands (Chwastiak and Young, 2003).

So the effectiveness of SEA can only be guaranteed if the performance presentation published by companies is examined through third parties. Otherwise these reports are only instruments to sanitise the public image of an organisation (Adams 2004). Stakeholder engagement is one of the key issues of the current social and environmental accounting movement. It is argued that accountability to stakeholders should be at the heart of any report (Medawar, 1974, Adams 2004).

3. Stakeholder approach as a precondition for effective SEA

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