Perspectives and Instruments of Corporate Citizenship

Content

ABSTRACT

List of Figures

List of abbreviations

Content

1. History and Development of the Terminology

2. Different Perspectives on Corporate Citizenship
2.1. Limited view of CC
2.1.1. Weaknesses of the limited view of CC
2.2. Equivalent View of CC
2.2.1. Weaknesses of the equivalent view of CC
2.3. Extended view of CC
2.3.1. Strengths and Weaknesses of the extended view of CC
2.4. Global Business Citizenship

3. Instruments of CC

4. CC today

5. Conclusion

References

ABSTRACT

In recent years, the term Corporate Citizenship became more famous and was used as common vocabulary. However, there is quite a huge discussion and confusion about the term and no general definition exists. Thus, this paper concentrates on the term ‘Corporate Citizenship’ and discusses the emergence of the terminology. It introduces different perspectives on how to define Corporate Citizenship, mainly the limited view, the equal view and the extended view of Corporate Citizenship. It also discusses and demonstrates some downsides and weaknesses of these perspectives. Additionally, the paper introduces the concept of Global Business Citizenship as contrast to the approaches previously explained. To get a practical approach as well, the paper takes a closer look on how corporations can implement Corporate Citizenship by introducing several instruments. In order to top the understanding of Corporate Citizenship off, the paper finally focuses on the Top 100 Corporate Citizens judged by the CR Magazine. It looks at the different categories and data elements of the Corporate Citizenship Lists Methodology in order to broaden the knowledge about the different parts of Corporate Citizenship and to get a better understanding of what can be expected nowadays from firms.

List of Figures

Figure 1. Carroll’s pyramid of CSR

Figure 2: An extended view of corporate citizenship

Figure 3: CC Database 2013

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. History and Development of the Terminology

The term Corporate Citizenship has been used for the last two decades but became more popular during the World Economic Forum in New York in January 2002. 34 CEOs of the world’s largest multinational corporations signed the document ‘Global Corporate Citizenship – The Leadership Challenge for CEOs and Boards’ (Crane, Matten, & Moon, 2008, p.25) due to facing the challenge of globalization.

In 2006, some global companies began using the terminology in their report, calling their documents for example ‘2007 Citizenship report’ (Citibank) or ‘Corporate Social Responsibility Report 2007’ (Total) (Crane & Matten, 2010, p.74).

Habisch, Wildner and Wenzel (2008) claim that besides globalization also other megatrends of the 21st century, for example huge changes in communication and information technology, challenge companies and have effects on their behavior. Stakeholders have rising expectations as companies own important resources and skills to solve problems of the society. Through the rapid development of the internet and other media, stakeholders can access information about companies and possible missteps which could result in penalties. Those developments push companies to a reorientation of their engagement which Habisch et al. also call Corporate Citizenship.

There is no complete and thorough theory of Corporate Citizenship yet available, however, during the last years, some academics have been done in this field and several concepts and theories have been developed. Nowadays, a Journal of Corporate Citizenship is published; several research centers were built solely around the topic of Corporate Citizenship; and the Corporate Responsibility Magazine even publishes ‘The 100 Best Corporate Citizens’ each year.

2. Different Perspectives on Corporate Citizenship

As described in chapter 1, there is no common definition and understanding of the term ‘Corporate Citizenship’. However, one can say that there are three general perspectives on how Corporate Citizenship can be understood and seen: limited view of CC, equal view of CC and extended view of CC. In the following chapters, this paper shall introduce and discuss the different perspectives and examine some of the corresponding problems.

2.1. Limited view of CC

In 1991, A.B. Carroll introduced the pyramid of Corporate Social Responsibility which is shown in figure 1.

Figure 1. Carroll’s pyramid of CSR

Abbildung in dieser Leseprobe nicht enthalten

From Focus CSR: The New Communication of the EU Commission on CSR and National CSR Strategies and Action Plans (2011). European Sustainable Development Network, Retrieved from http://www.sd-network.eu/?k=quarterly%20reports&report_id=23, 16 February 2014.

The idea is that corporations have economic, legal, ethical and philanthropic responsibilities. He suggests that economic responsibilities are the most fundamental ones: Businesses are expected to produce goods and sell them at a profit. This is followed by legal responsibilities which mean corporations are expected to obey the law; and ethical responsibilities being the third level, where businesses are demanded to act according the ethical norms formed by society. The philanthropic responsibilities build the top of the pyramid, being “highly desired and prized but actually less important than the other three categories of social responsibility. In a sense, philanthropy is icing on the cake – or on the pyramid (…)” (Carroll, 1991). He understands the fourth level of the pyramid - philanthropic activities- as a synonym for Corporate Citizenship being the voluntary choice of a corporation to give something back to society.

2.1.1. Weaknesses of the limited view of CC

The limited view of Corporate Citizenship is for example questioned by Crane et al. (2008) and Matten, Crane, and Chapple (2003). They raise the question if the term Corporate Citizenship really describes a completely new idea and concept. “The element of self-interest in corporate philanthropy, the investment aspect of social engagement and the focus on local communities are elements that are not completely new, and have already been discussed in the literature on CSR, social performance or stakeholder theory (…)” (Crane et al., 2008, p.29). Furthermore, there is, except for mentioning duties and rights of corporations in society, only few relation and explanation to the term ‘citizenship’.

2.2. Equivalent View of CC

Supporters of the second approach consider Corporate Citizenship and Corporate Social Responsibility as replaceable definitions. One of the supporters of this approach is again Carroll himself who defined Corporate Citizenship years ago as philanthropic act. In his article ‘The four faces of corporate citizenship’ (1998), he introduces Corporate Citizenship as concept consisting of four responsibilities: economic, legal, ethic and philanthropic – which complies with his definition of CSR two decades ago. A corporation being a good corporate citizen does not only strive after giving something back to their stakeholders and communities, but strives also after increasing its profit, complying with the law and fulfilling ethical norms.

Carroll’s new definition was adopted by several authors: Crane et al. (2008, p. 30) mention Andriof and McIntosh (2001), Maignan and Ferrell (1999) and Birch (2001) as examples for authors who described Corporate Citizenship synonymously to Carroll’s understanding of CSR in 1991.

2.2.1. Weaknesses of the equivalent view of CC

However, the question arises, why the term Corporate Citizenship was introduced when it defines an already existing approach. Dubielzig et al. (2005) explain in their article that terms like ‘Corporate Social Responsibility’ could be interpreted in a way that corporations have not acted responsible yet although they should. Thus Corporate Citizenship has a much more positive meaning since corporations are seen as part of society.

It can be again argued that Corporate Citizenship just functions as a new description of existing concepts. Contrary to the limited view, the term this time just addresses a broader set of issues. Matten et al. (2003) argue that representatives of this view simply rebrand CSR or narrow CSR down into Corporate Social Performance in order to put CC on the same level as CSR. The weaknesses of the limited and equivalent view are the reason why they developed a third view: the extended view of CC.

2.3. Extended view of CC

There are not many people who dedicated themselves to extend the view on CC, but Matten and Crane are one of those. In numerous papers and books, they introduce the so called ‘extended view of Corporate Citizenship’. They take T. H. Marshall’s categorization of liberal citizenship as initial position. According to Marshall (1964), civil, social and political rights are the framework for liberal citizenship.

“Civil rights consist of those rights which provide freedom from abuses and interference by third parties (most notably the government) (…). Social rights consist of those rights which provide the individual with the freedom to participate in society, such as the right to education (…). The third category of political rights moves beyond the mere protection of the individual’s private sphere (…) [they] include the right to vote (…) and, generally speaking, enable the individual to take part in the process of collective will formation (…)” (Matten et al., 2003, p.114).

Matten and Crane (2005) state that the corporation neither has citizenship nor is it an active citizen itself in society. They rather regard corporations as artificial persons who have some of the same rights and obligations as real citizens; however, they are more powerful actors who can impact the real citizens significantly. Hence, the role of the corporations is to get active when governments fail in protecting their citizens.

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