SAGE Brief Guide to Corporate Social Responsibility
Publication Year: 2012
Subject: Corporate Social Responsibility
This guide to corporate social responsibility (CSR) provides discussion of key concepts in a short, easy-to-use format. It is divided into sections on key terms, the global stage, corporate governance, corporate social responsiveness, public relations and philanthropy, and implications for corporate financial performance. It is an ideal supplement for business courses or as a reference for students and practitioners who would like to learn more about the basics of CSR.
- Front Matter
- Back Matter
- Corporate Social Responsibility (CSR)
- Strategic Corporate Social Responsibility
- Strategic Philanthropy
- Corporate Citizenship
- Corporate Accountability
- Corporate Moral Agency
- Social Entrepreneurship
- Corporate Governance
- Stakeholder Theory
- Stakeholder Responsibility
- Shareholder Wealth Maximization
- Berle-Dodd Debate
Part IV: Corporate Social Responsiveness: Public Affairs and Public Relations, Politics, and Philanthropy
- Corporate Social Responsiveness
- Corporate Public Affairs
- Public Relations
- Corporate Political Advocacy
- Corporate Philanthropy
Copyright © 2012 by SAGE Publications, Inc.
All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher.
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Library of Congress Cataloging-in-Publication Data
Sage brief guide to corporate social responsibility.
Includes bibliographical references and index.
ISBN 978-1-4129-9722-5 (pbk.)
1. Social responsibility of business. I. Sage Publications, inc.
This book is printed on acid-free paper.
11 12 13 14 15 10 9 8 7 6 5 4 3 2 1
Commerce is by its very nature a normative enterprise. It is concerned with creating value for owners and other constituencies, ranging from the firm's immediate stakeholders, such as employees, customers, and suppliers, to the entire society within which the business operates. But what particular value do we expect modern businesses to bring to our society?
The concept of corporate social responsibility (CSR) refers to the general belief held by many that modern businesses have a responsibility to society that extends beyond the stockholders or investors in the firm. That responsibility, of course, is to make money or profits for the owners. These other societal stakeholders typically include consumers, employees, the community at large, government, and the natural environment. There are many ways in which companies may manifest their CSR in their communities and abroad. Most of these initiatives would fall in the category of discretionary, or philanthropic, activities, but some border on improving some ethical situation for the stakeholders with whom they come into contact.
As we think about the importance of CSR/CSP in the new millennium, it is useful to review the results of the millennium poll on CSR that was sponsored by Environics, International, the Prince of Wales Business Leaders Forum, and the Conference Board. This poll included 1,000 persons in 23 countries on six continents. The results of the poll revealed how important citizens of the world now thought CSR really was. The poll found that in the 21st century, companies would be expected to do all the following: demonstrate their commitment to society's values on social, environmental, and economic goals through their actions; fully insulate society from the negative impacts of company actions; share the benefits of company activities with key stakeholders, as well as shareholders, and demonstrate that the company can [Page viii]be more profitable by doing the right thing. This “doing well by doing good” approach will reassure stakeholders that new behaviors will outlast good intentions. Finally, it was made clear that CSR/CSP is now a global expectation that requires a comprehensive, strategic response.
This Brief Guide to Corporate Social Responsibility is designed to provide students and practitioners with a quick reference guide to this important topic. While corporate social responsibility is certainly gaining increased respect and attention, the research in this area is still ever-evolving and the key terminology is constantly in flux. With entries covering key terms such as “Strategic Corporate Responsibility” alongside others such as “Corporate Social Responsibility,” “Corporate Citizenship,” and “Global Business Citizenship,” this volume aims to provide readers with an introduction to these ever-evolving concepts and the relationships between them.Format
This guide to corporate social responsibility provides key terms and concepts related to CSR in a short, easy-to-use format. It is intended to act as a companion for business courses or as a reference for students and practitioners who would like to learn more about the basics of CSR.
The text is divided into five sections that contain important keywords that relate to those sections: Corporate Social Responsibility and Related Terms; Corporate Social Responsibility on the Global Stage; Corporate Governance, Stakeholders, and Shareholders; Corporate Social Responsiveness: Public Affairs and Public Relations, Politics, and Philanthropy; and Measuring Corporate Social Performance and Implications for Financial Performance. Each keyword entry is a comprehensive essay written by a business scholar, and entries address such critical topics as strategic philanthropy, corporate moral agency, triple bottom line, corporate social performance, and social audits. In the back of the book, you will also find three appendixes. Appendix A, Problematic Practices, includes entries on businesses and industries that have engaged in problematic practices that raise questions about their commitment to corporate social responsibility. A correlation table in this appendix also provides suggested pairings between the problematic practices and the entries in the text, so that instructors have an idea of which concepts are illustrated in the problematic practices entries. Appendix B provides a directory of [Page ix]CSR-related organizations and Internet links, and Appendix C provides a directory of online CSR information sources and publications.Acknowledgments
We would like to acknowledge and thank Robert Kolb, editor of SAGE's award-winning Encyclopedia of Business Ethics and Society, whose contributions provided the foundation for this companion text.—The Editors of SAGE[Page x]
Appendix A: Problematic Practices[Page 229]
Suggested Pairings Table*
Problematic Practices Related Entries Love Canal
- Corporate Social Responsibility
- Corporate Social Responsiveness
- Corporate Public Affairs
Merck & Co., Inc.
- Corporate Social Responsibility
- Corporate Social Performance
- Corporate Social Responsibility
- Corporate Governance
- Corporate Social Responsibility
- Global Corporate Social Responsibility
- Corporate Social Responsibility
- Public Relations
- Corporate Social Responsibility
- Corporate Social Responsiveness
* This correlation table provides suggested pairings between the problematic practices that follow and the entries that appear throughout the text, so that instructors have an idea of which concepts are illustrated in the problematic practices entries.[Page 230]Love Canal
Love Canal, a small community near Niagara Falls, New York, entered into our national memory starting with a front-page story in the New York Times on August 1, 1978. In that story, it was noted that Hooker Chemical Company had dumped toxic wastes into the ground up until 1953. The article addressed the incidence of birth defects in children in the area. Lois Gibbs, a resident, became a national spokesperson for all those who lived in Love Canal.
Love Canal was named after a Mr. William Love, who attempted to build a canal connecting two levels of Niagara Falls in 1890. His plan ultimately failed, and the only actual accomplishment was the building of a canal about 1 mile long, 15 feet wide, and 10 feet deep. The City of Niagara Falls began using it to dump chemical wastes as early as 1920, and the U.S. Army used the site to bury wastes from chemical warfare experiments. In 1942, Hooker Chemical Company (an arm of Occidental Petroleum) expanded the use of the site and, in 1947, bought the land for its own use. By 1952, the site was filled to capacity with approximately 21,800 tons of toxic wastes.
The local school board was seeking out new land for school buildings as a consequence of population growth. The school board pressed Hooker for the property and the firm refused on several occasions. The community threatened to take over the land by eminent domain and the firm finally agreed to sell the property for $1. The company warned the community of the dangers of the site, of the risks involved with the toxic wastes, and included a 17-line explanation in the agreement outlining the dangers and transferring all liability for the site to the City of Niagara Falls. This transfer of liability has often been ignored in public comment and debate. In the building of the school, the cap directly on top of the waste site was broken through (several drill bits were broken in the process). This breaking of the cap allowed water to seep into the site and toxic chemicals to leach out into the surrounding area.
Starting in 1978, Lois Gibbs, the then president of the Love Canal Homeowners' Association, led the community effort to obtain information about health concerns and to get redress for the situation. The association was opposed by Occidental and by government at all levels. Eventually, in 1980, [Page 231]as a result of extraordinary publicity, President Jimmy Carter declared it a federal emergency and had the residents evacuated from Love Canal. More than 800 families were eventually relocated and reimbursed for their residences. Occidental Petroleum spent more than $200 million on the cleanup.
This incident was used to further national public interest in hazardous waste sites and led to the passage of federal legislation, commonly referred to as the Superfund, to clean up toxic and hazardous waste sites nationwide.—Further Readings1982). Love Canal: My story. Albany: State University of New York Press.(2000). Uncertain hazards: Environmental activists and scientific proof. Ithaca, NY: Cornell University Press.(1981). Love Canal: The truth seeps out. Reason Online. Retrieved June 4, 2006, from http://reason.com/8102/fe.ez.the.shtml([Page 232]Merck & Co., Inc.
Merck & Co. Inc., a large U.S. public pharmaceutical company, has faced several important ethical and social responsibility tests over the years. Established in 1891, Merck discovers, develops, manufactures, and markets vaccines and medicines in more than 20 therapeutic categories. The company has approximately 60,000 employees and sells products in approximately 150 countries. Worldwide sales in 2005 were more than $22 billion. The firm has always had a “patient first” approach to doing business as indicated by George Merck, the son of the founder, who stated that Merck tries never to forget that medicine is for the people, not for the profits. This view is currently reflected in the company's values, which states that Merck's business is preserving and improving human life. Although the firm has faced many challenges, two of the more significant ethical and social responsibility issues confronted by Merck include whether to produce and distribute a drug to help cure river blindness and whether to recall its arthritis drug Vioxx.
In terms of the first major issue faced by Merck, river blindness is an eye and skin disease caused by a worm that is transmitted to humans through the bite of a fly. The baby or larval worms then move through the body migrating in the skin and the eye causing itching, severe skin disease, and after repeated years of exposure, blindness. Merck researchers discovered that it was highly likely that by spending tens of millions of dollars they could develop the cure for river blindness. The problem was that the millions of people afflicted by the disease lived in parts of the world (primarily Africa) where they could not afford to pay for the drug. Other pharmaceutical companies, foundations, governments, and health organizations were not interested in paying for the development of the drug. Other concerns related to the risk of side effects for humans that might then affect the sales of Merck's animal drug, or that the human drug might be diverted into the black market, undercutting sales of the animal drug. The company also risked creating a precedent both internally among its researchers and externally among the public that might be difficult to meet in the future in [Page 233]terms of developing other important drugs with little or no financial return expected.
Despite the costs and the risks, Merck, through the leadership of its CEO Roy Vagelos, decided to spend the money. The drug, known as Mectizan, was not only developed but also distributed by Merck for free for years beginning in 1987. The decision did end up having indirect financial benefits for the firm, which according to Dr. Vagelos related primarily to the recruitment of top researchers. In December 2002, the World Health Organization declared river blindness virtually eradicated as a world disease, with the program reaching 40 million people annually in more than 30 countries.
The second major ethical and social responsibility issue places Merck in a potentially more negative light. The issue involves what has been perceived as Merck's delayed decision to recall its arthritis drug Vioxx, despite apparent knowledge of numerous deaths caused by the drug. Merck pulled its $2.5 billion-a-year drug off the market on September 30, 2004, when a study indicated that it doubled the risk of heart attack and stroke in patients who took the drug for more than 18 months. The issue appears similar to that faced by A. H. Robins Company, which was eventually forced into bankruptcy in the mid-1980s after facing lawsuits due to its allegedly defective Dalkon Shield intrauterine birth control device.
Plaintiffs claim that Merck knew of the additional risk of heart attacks based on previous clinical studies, but failed to warn doctors and consumers of the risk. From 1999 to 2004, more than 20 million Americans took Vioxx. By the end of 2005, Merck faced close to 10,000 lawsuits in the United States. The firm is also being sued in Europe, Australia, Brazil, Canada, Israel, and Turkey. As of April 2006, Merck had already spent hundreds of millions of dollars to defend four cases, with two wins and two losses (with judgments against Merck for $253 million in Texas and $13.5 million in New Jersey). The company continues to refuse to pursue a global settlement and is appealing the cases it has lost. Some estimate that the company may have to defend more than 100,000 Vioxx lawsuits leading to possible liability of up to $50 billion (U.S.) for Merck, since epidemiologists estimate that 100,000 people might have suffered heart attacks because of the drug. It is still unclear how Vioxx will ultimately affect the future prospects of Merck, and whether Merck will be able to withstand the current legal assault.—[Page 234]Further Readings2006, April 12). Merck jury adds $9 million in damages. New York Times. Retrieved from http://www.nytimes.com/2006/04/12/business/12vioxx.html(1991). Merck & Co. Inc.: Addressing Third World needs (A and B). Boston: Harvard Business School Press., , & (Merck Corporate. [website]. The Merck mectizan donation program. Retrieved from http://www.merck.com/about/cr/policies_performance/social/mectizan_donation.htmlMerck Corporate. [website]. VIOXX information center. Retrieved from http://www.merck.com/newsroom/vioxx_withdrawal2006). Business ethics: Concepts and cases ((6th ed.). Upper Saddle River, NJ: Prentice Hall.[Page 235]Enron Corporation
Enron Corporation's December 2, 2001, Chapter 11 reorganization filing was the largest bankruptcy in history, until it was exceeded in 2002 by WorldCom. Enron, headquartered in Houston, Texas, had grown quickly into a superficially giant and well-regarded company. It rapidly collapsed following the sudden disclosure of massive financial misdealing, which revealed the company to be a shell rather than a real business. During 2001, Enron stock fell to about $0.30—an unprecedented collapse for a blue-chip stock.
The Enron scandal helped propel passage of the McCain-Feingold Bipartisan Campaign Reform Act of 2002 (March). While Enron was neither the biggest nor the most important source of political funds, it had been active in making political contributions and attempting to influence legislators. Part of the Enron scandal involved political connections to President George W. Bush (former governor of Texas) and Vice President Dick Cheney (formerly CEO of a Texas-headquartered company). In May 2005, a U.S. appeals court dismissed a related lawsuit against the vice president on the grounds that an administration must be free to seek confidential information (including Enron) concerning energy policy.
Enron, quickly followed by WorldCom, helped propel the Sarbanes-Oxley Act of 2002 (July), the most significant change in U.S. securities laws since the early 1930s. As shocking as the sudden bankruptcy of a blue-chip company was, the subsequent revelations were worse: The traditional U.S. corporate governance watchdogs—attorneys, auditors, and directors—had either aided and abetted the responsible executives or had been grossly negligent in the supervision of those executives. The United States and several other countries were rocked by multiple revelations of corporate scandals that ultimately also included analysts; auditors; banks; brokerages; mutual, hedge, and currency trading funds; and the New York Stock Exchange.Arrogance, Corruption, Greed, and Ruthlessness
Enron was not the first nor the last nor the largest of the corporate scandals in recent years. Nevertheless, Enron became, above all other companies, the [Page 236]emblem for management fraud, director negligence, and adviser misconduct. Enron is easily the most widely studied and best documented of the recent corporate frauds. Enron was a prolonged media event.
The high education levels and intelligence of Chairman Kenneth L. Lay (PhD in economics), CEO Jeffrey K. Skilling (Harvard MBA and top 5% Baker Scholar), and CFO Andrew Fastow (Northwestern MBA) raised serious questions about business school treatment of ethics and law. In January 2005, the documentary movie Enron: The Smartest Guys in the Room, based on Bethany McLean and Peter Elkind's 2003 bestseller of the same name, premiered at the Sundance Film Festival in Utah. Spring 2005 releases took place in Austin and then Houston. The theme of the book and the movie is that smart guys can outsmart themselves as well as everyone else.
The most astonishing aspect of the Enron scandal was that a significant number of executives had engaged in improper actions despite the company having in place the key elements and best practices of a comprehensive ethics program. There was a detailed 64-page “Code of Ethics” with an introductory letter from Chairman Ken Lay and a “Statement of Human Rights Principles” together with a sign-off procedure on the code for each employee, an internal reporting and compliance system, visible posting of corporate values (banners in the headquarters building, signs in the parking garage, and so forth), and an employee-training video—Vision and Values—discussing ethics and integrity. Enron issued a 2000 annual report on corporate responsibility. The “Code of Ethics,” like other Enron paraphernalia, was later auctioned on eBay. The Smithsonian Institution reportedly obtained a copy of the code for its permanent collection.
The publicized “values” of Enron were respect, integrity, communication, and excellence. The real “ethical” climate at Enron was a combination of arrogance (or hubris), corruption, greed, and ruthlessness. The gap between words and deeds at Enron was dramatic. This gap suggests that it is not particular corporate governance devices that matter most but the probity and integrity of individuals in relationship to the ethical climate within a company.
The executives were arrogant in attitude and conduct. The company strategy was one of revolutionizing trading by breaking traditional rules. The “vision” at Enron was to become the world's leading energy company—in reality, by any means necessary. There were rumors of sexual misconduct by executives. Expensive vehicles and power-oriented photogenic poses were commonplace.
[Page 237]The weight of evidence suggests that the lure of wealth had suborned the corporate governance watchdogs. It turned out that the directors must have been asleep at the switch or mesmerized by the rising stock price. It turned out that the external attorneys and auditors could not afford to lose such a successful client. Enron executives did not hesitate to bully the external safeguards, such as analysts, when and if necessary. A corruption machine was at work, whether intentionally or inadvertently.
In the 1987 film Wall Street, the character named Gordon Gekko announces that greed is good. Enron—whose logo became known as “the Crooked E”—epitomized that slogan. Greed is a morally disturbing paradox at the heart of the market economy. Bernard Mandeville, in the Fable of the Bees, or Private Vices, Publick Benefits (1714), argued that individual vices and not individual virtues produce public benefits by encouraging commercial enterprise. An economic actor engages in selfish calculation of interest or advantage. This consequentialist perspective emphasizes outcomes over intentions or means. The Enron executives carried this perspective to its logical extreme. Adam Smith's telling criticism in The Wealth of Nations of the East India Company's personnel suggests that he would hardly be surprised.
The company culture embodied ruthlessness toward outsiders and insiders alike. Skilling emphasized a process of creative destruction within the company. The rank and yank system of employee evaluation by peer review, reportedly installed by CEO Skilling, annually dismissed the bottom 20% of the employees—and perhaps corruptly rather than objectively. It has been reported that traders were afraid to go to the bathroom because someone else might steal information from their trading screen. In such a culture, no one would report bad news. In such a culture, individual achievement was everything and teamwork was nothing. Enron culture emphasized bonuses, hardball, take no prisoners, and tacit disregard for ethics and laws.The Rise of Enron
Ken Lay, then CEO of Houston Natural Gas, formed Enron in 1985 by merger with InterNorth. Lay had worked in federal energy positions and then in several energy companies. He was an advocate of free trade in energy markets and had experience in political influence peddling. Enron was originally involved in transmission and distribution of electricity and natural gas in the United [Page 238]States. It also built and operated power plants and gas pipelines, and similar industrial infrastructure facilities, globally. Allegedly, bribes and political pressure tainted contracts around the world—most notoriously a $30 billion contract with the Maharashtra State Electricity Board in India.
Jeff Skilling was a senior partner at McKinsey & Co. and in the later 1980s worked in that capacity with Enron. Skilling joined Enron in 1990 as chairman and CEO of Enron Capital & Trade Resources. In 1996, he became president and COO of Enron. The company morphed into an energy trading and communications company that grew to some 21,000 employees, and its stock price rose to about $85. Enron grew to the seventh largest publicly listed company in the United States. Strategy emphasized bold innovation in trading of power and broadband commodities and risk management derivatives— including highly exotic weather derivatives. Trading business involved mark-to-market accounting in which revenues were booked, and bonuses awarded, on the basis of effectively Enron-only estimates of the value of contracts. Fortune magazine named Enron “America's Most Innovative Company” for five consecutive years (1996–2000). Enron made Fortune's “100 Best Companies to Work for in America” list in 2000. The company's wealth was reflected in an opulent office building in downtown Houston. Business school cases on Enron's business practices and culture were circulated for teaching purposes. Skilling served briefly as CEO of Enron from February to August 2001. Then, he abruptly resigned from Enron and Lay took over as CEO.The Fall of Enron
Following the bankruptcy filing, there were multiple investigations, including one commissioned by the Enron board of directors and directed by William C. Powers Jr., dean of the University of Texas at Austin's law school. The U.S. Department of Justice announced (January 9, 2002) a criminal investigation of Enron, and various congressional hearings began (January 24, 2002). The hearings also revealed the role of Sherron Watkins, a certified public accountant, who had warned Lay about Fastow's offshore devices after Skilling suddenly resigned. Watkins's experience helped propel into law the whistle-blower protection elements of the Sarbanes-Oxley Act. The investigations emphasized two key matters, revealing how Enron had been built as an empty house of cards.
Enron was deeply involved in manipulating the California energy crisis. John Forney, a former energy trader, was indicted in December 2002 on [Page 239]11 counts of conspiracy and wire fraud and pled guilty. Tape recordings revealed Enron traders on the phone asking California power plant managers to get a little creative in shutting down plants for repairs. Forney was a Star Wars fan. His “Death Star” strategy involved shuffling energy around the California power grid to generate state payments relieving congestion. Death Star deliberately created congestion. He named other devices JEDI (Joint Energy Development Investments) and Chewco (after the character of Chewbacca).
The other key revelation concerned CFO Andrew Fastow's creative use and alleged partial ownership of offshore special purpose entities (SPEs) or limited partnerships. These devices separated debt from revenues and kept market-to-market losses off Enron's books temporarily. Fastow had been a CFO Magazine award for excellence winner. Fastow was indicted (November 1, 2002) on 78 counts, including fraud, money laundering, and conspiracy. He and his wife, Lea Fastow, former assistant treasurer of Enron, accepted a plea agreement (January 14, 2004) in exchange for testifying against other Enron defendants. Mr. Fastow received a 10-year prison sentence and a loss of $23.8 million; Mrs. Fastow received (for income tax evasion charges in concealing Mr. Fastow's gains) a 5-month prison sentence and 1 year of supervised release, including 5 months of house arrest. The Enron board had waived conflict of interest rules in its own Code of Conduct to permit Fastow to oversee some of these SPEs. Most important were the “Raptors” (after Jurassic Park creatures) or “LJM1” and “LJM2,” named for Fastow's wife and two children. It was alleged that Fastow had engaged in unauthorized self-dealing and benefited directly from these supervised devices.
The Enron bankruptcy resulted in the criminal conviction for obstruction of justice and, thus, forced auditing license surrender of its auditor Arthur Andersen, which collapsed. The audit partner assigned to Enron, David Duncan, pled guilty to ordering large-scale destruction of work documents. Some 28,000 Arthur Andersen employees had to find other employment. On May 31, 2005, the U.S. Supreme Court unanimously overturned the firm's conviction on grounds that the trial judge's jury instructions were too vague and broad. Federal prosecutors decided in November 2005 not to retry the case. Duncan was allowed to withdraw his guilty plea, although other charges could be filed against him.
As of July 2005, there had been 16 guilty pleas and six convictions (one thrown out) in the Enron cases. Former Merrill Lynch bankers and Enron executives were convicted in the Nigerian barge trial. (One executive was found innocent.) Nonexistent barges (to be built) were flipped between Enron and Merrill Lynch to generate paper profits and bonuses. In July 2005, three [Page 240]former executives of Enron Broadband Services (EBS) were acquitted of some charges; the jury deadlocked on other charges against them and two other defendants. The charges had argued intentional overpromotion of EBS's value. The judge dismissed the remaining charges against all defendants. In November 2005, a special grand jury issued three streamlined indictments against the five codefendants. Skilling was indicted in February 2004 and Lay in July 2004, both on multiple counts. Both pled not guilty; their trials had not commenced as of November 2005. The prosecution wanted to try, with Lay and Skilling, the former chief accounting officer of Enron Rick Causey. He had pled not guilty to more than 30 charges of fraud. He was indicted in January 2004.Employees and Shareowners
Enron's bankruptcy had serious effects for many individuals and organizations. The Houston Astros paid Enron $5 million to rename Enron Field as Astros Field, subsequently changed to Minute Maid Park. Playboy (August 2002) featured a pictorial “The Women of Enron.” David Tonsall, former Enron employee, became rapper “N Run” (i.e., Enron and “never run”) on a December 2003 CD Corporate America.
Shareowners lost virtually everything. Several employees lost their jobs and their life savings that they had invested in Enron stock. Like former Arthur Andersen employees, former Enron employees may have damaged résumés. The Enron bankruptcy reorganization was a lengthy affair under a new management and bankruptcy examiner. The state of California is attempting recovery of monies from various parties. Eventually, shareowners and employees may begin partial financial recoveries from various parties, including banks and insurance companies. As of November 2005, Citigroup had settled for $2 billion, J. P. Morgan Chase for $2.2 billion, and the Canadian Imperial Bank of Commerce for $2.4 billion. These figures represent the largest securities class-action settlement on record, and there are still a number of other prominent defendant banks remaining. The U.S. bankruptcy court finalized a settlement in May 2005 of about $3,500 on average for more than 20,000 current and former employees (about $69 million total). Civil lawsuits are still proceeding against Lay, Skilling, Enron, and others. The directors of Enron (and WorldCom) personally paid damages.—[Page 241]Further Readings2003). The number: How the drive for quarterly earnings corrupted Wall Street and corporate America. New York: Random House.(2002). House of cards: Confessions of an Enron executive. College Station, TX: http://Virtualbookworm.com., & (2002). Pipe dreams: Greed, ego, and the death of Enron. New York: PublicAffairs.(2002). Anatomy of greed: The unshredded truth from an Enron insider. New York: Carroll & Graf.(2005). Conspiracy of fools: True story of the Enron scandal. New York: Broadway Books.(Enron traders caught on tape [Electronic version]. (2004, June 1). CBS Evening News. Retrieved from http://www.cbsnews.com/stories/2004/06/01/eveningnews/main620626.shtml2003). Enron: The rise and fall. New York: Wiley.(2002). What went wrong at Enron: Everyone's guide to the largest bankruptcy in U.S. history. New York: Wiley., & (2003). Enron and the raptors [Electronic version]. CPA Journal. Retrieved from http://www.nysscpa.org/cpajournal/2003/0403/features/f042403.htm, , & (2002). The role of the board of directors in Enron's collapse. In Hearing before the House Committee on Energy and Commerce, Subcommittee on Oversight and Investigation. 107th Congress, testimony of R. K. Jaedicke, Enron Board of Directors, Chairman of Audit and Compliance Committee.(2003). The smartest guys in the room: The amazing rise and scandalous fall of Enron. New York: Portfolio., & (Persons of the year—The whistleblowers: Cynthia Cooper of WorldCom, Coleen Rowley of the FBI, Sherron Watkins of Enron. (2002, December 30, to 2003, January 6). Time, 160(27).Rapoport, N. B., & Dharan, B. G. (Eds.). (2004). Enron: Corporate fiascos and their implications. New York: Foundation Press.2003). How two Wall Street Journal reporters uncovered the lies that destroyed faith in corporate America. New York: HarperBusiness., & (2003). Power failure: The inside story of the collapse of Enron. New York: Doubleday.(with ). (2003). Ethical conflicts at Enron: Moral responsibility in corporate capitalism. California Management Review, 45(4), 6–19.([Page 242]Nike, Inc.
Nike, Inc. is a high-profile sporting goods and apparel company that engages in the design, development, and marketing of footwear, equipment, and accessory products worldwide under brand names such as NIKE, Cole Haan, Converse, Starter, Hurley, and Bauer. The company, which is headquartered in Beaverton, Oregon, sells its products through a mix of independent distributors, licensees, and subsidiaries in approximately 120 countries worldwide. Nike has experienced substantial financial and marketing success since its founding in the 1960s and is now the largest sporting goods company in the world (in terms of market capitalization). Despite its success, the company has been the target of much criticism in recent years for alleged abusive or “sweatshop” labor practices in its subcontractors.
Nike was founded as an athletic shoe company by Phil Knight and Bill Bowerman in 1962 under the name Blue Ribbon Sports. In 1972, the company changed its name to Nike, after the Greek goddess of victory. Knight had been a track athlete and business student at the University of Oregon, where Bowerman was his coach. While getting his MBA at Stanford, Knight devised a strategy for the manufacturing of athletic shoes overseas that would take advantage of lower-cost off-shore production capabilities. The plan was for Nike to be essentially a design, marketing, and distribution company with all the production performed by subcontractors operating overseas.
This strategy proved highly successful. Nike started subcontracting in Japan and then moved its sourcing operations to South Korea and Taiwan to take advantage of lower cost of production in these locations. As the economies of South Korea and Taiwan developed, Nike continued to move its sourcing operations to even cheaper locations such as China, Indonesia, and Vietnam.
In the fiscal year 2005, Nike had revenues of $13.7 billion and employed about 24,000 people directly and another 650,000 in more than 800 supplier factories worldwide. The company has operations in several locations including Oregon, Tennessee, North Carolina, and the Netherlands in addition to its Niketown and Nike Factory Store retail outlets. It has several subsidiaries: Cole Haan (casual luxury footwear and accessories), Bauer Nike Hockey [Page 243](hockey equipment), Hurley International (teen-oriented sports apparel for surfing, skateboarding, and snowboarding), Converse (athletic footwear), Nike IHM, Inc. (cushioning components used in Nike footwear), and Exeter Brands Group, which includes Starter and licenses other Nike brands. Nike became a publicly traded company in 1980, and its New York Stock Exchange ticker symbol is NKE.
One of the key components of Nike's strategy has been the use of celebrity athletes as endorsers for its products. Its endorsers have included some of the biggest names in sports such as Michael Jordan (after whom the famed “Air Jordan” shoes were named), Lance Armstrong, Tiger Woods, Kobe Bryant, and Jerry Rice.
In the late 1980s, Nike found itself at the center of controversy brewing over alleged sweatshop labor working conditions in its subcontractor factories in developing countries. Critics alleged that a number of labor-oriented problems existed in these factories including (1) wage and salary concerns—both the payment of low wages and the use of various schemes to cheat workers out of the wages to which they were entitled, (2) unsafe/unhealthy working conditions, (3) excessive working hours and forced overtime, (4) harsh and abusive disciplinary tactics, (5) the use of child labor, and (6) active opposition to unionization efforts by the workers. According to some critics, such as labor activist Jeff Ballinger, the opposition to unionization was the key concern because, it was reasoned, with effective union representation the other issues could be resolved.
Several incidents contributed to the notoriety Nike quickly acquired on these issues. There were several worker fatalities reported in Nike subcontractor factories in the early 1990s. In addition, reports started circulating of Nike's involvement with the use of child labor in its subcontractor factories. A picture purported to be of a child worker in a Nike subcontractor factory in Pakistan sewing soccer balls appeared in Life magazine in 1996. It was later learned that the photo was staged (soccer balls are sewn before they are inflated but the ball the child was holding had already been inflated). Nevertheless, Nike was perceived by the general public as a leading culprit in the exploitation of child labor. The company was lampooned in comic strips such as Doonesbury and by late night talk show hosts such as Jay Leno and David Letterman (e.g., one of the top 10 signs you are at a bad summer camp: you spend all day sewing swooshes on Nike sneakers). Critics also parodied Nike's “Just Do It” slogan by suggesting that Nike “Just Stop It.”
[Page 244]There are several ironies related to Nike's strategy that contributed to the publicity this controversy received. The fact that Nike's shoes were highprestige luxury items sold to well-to-do children (and sometimes not-so-well-to-do children) in the United States and other western countries contrasted sharply with working conditions being portrayed in the media and the perceived exploitation of child labor.
In addition, Jeff Ballinger, who had been working to organize Nike subcontractor factories in Indonesia in the late 1980s and early 1990s, was able to point out the disparity in the money Nike paid celebrity endorsers versus what workers were paid to make Nike shoes. In the August 1992 issue of Harper's magazine, Ballinger was quoted as saying that an Indonesian worker making Nike shoes in Java would have to work 44,492 years to make what Nike paid Michael Jordan in one year. This criticism was an example of how Ballinger and other critics were able to use Nike's celebrity endorsement strategy against the company. Although Ballinger would later concede that Nike was no worse than other firms in the industry, Nike's name became synonymous with the term sweatshop labor in the eyes of much of the general public.
Labor-affiliated critics of Nike's overall strategy and labor practices were concerned both with the loss of jobs to overseas production and what they referred to as a “race to the bottom.” According to this line of argument, the exploitation of low-paid workers overseas in harsh working conditions put downward pressure on wages and working conditions of workers in the United States. Thus, it was both a matter of labor solidarity and self-interest that led union activists to criticize Nike's labor practices and to call for reforms.
The criticisms of Nike got traction on the nation's college campuses where chapters of Students Against Sweatshops began to form. Students and faculty involved began demanding to know who was making the collegebranded gear (e.g., hats, sweatshirts, T-shirts) being sold in the college bookstores and under what conditions they were being made. About the same time, the mid-1990s, a boycott of Nike products over sweatshop labor concerns began to pick up steam.
Both critics and supporters of Nike concede that Nike's problems were exacerbated by its initial response to the criticism. This was to disavow any responsibility for labor problems in its subcontractor facilities on the grounds that it did not make the shoes—they are made by its subcontractors. Nike subsequently enlisted former Atlanta Mayor and UN Representative Andrew Young to investigate its subcontractor factory operations in Vietnam. When a [Page 245]generally upbeat report was issued, Young was criticized for bias and sloppy research methods.
In November 1997, the New York Times stated that in an inspection report that was prepared for the company's internal use only, Ernst & Young wrote that workers at the factory near Ho Chi Minh City were exposed to carcinogens that exceeded local legal standards by 177 times in parts of the plant and that 77% percent of the employees suffered from respiratory problems. The article leaked several excerpts from this report that detailed the unsafe and unhealthy working conditions in Nike's factories.
While Nike was at the center of the controversy over alleged sweatshop labor practices, other firms and parties became embroiled in it as well. When morning talk show host Kathie Lee Gifford's line of clothing was criticized for being made with abusive labor practices, she investigated the allegations herself and confirmed some of the charges. Ms. Gifford then became an advocate for improving working conditions in the apparel industry.
As the criticism mounted regarding the use of sweatshop labor in the apparel and footwear industries, the federal government got involved. During the Clinton Administration, the White House convened a meeting of industry, labor, and activist representatives to address issues of sweatshop labor in the apparel industry. Originally called the Apparel Industry Partnership, this group came to be known as the Fair Labor Association whose purpose was to promote adherence to international labor standards and improve working conditions worldwide.
A turning point in Nike's response to critics was Phil Knight's appearance at the National Press Club in May 1988. In his speech, Knight conceded that Nike bore responsibility for conditions in its subcontractors' factories and that many of the critics' complaints about those factories were valid. Furthermore, he pledged to reform Nike's labor practices with respect to child labor, worker development, and safe working conditions. More specifically, Knight promised to raise the minimum age of all sneaker workers to 18 and apparel workers to 16, adopt clean air standards, advance microloans to workers, and expand its monitoring program. Following this speech Nike undertook a number of institutional changes to carry out Knight's promises. Notably, Nike changed its response to this controversy from defensive to proactive and began to take the lead in efforts to reform working conditions in poor countries. In addition, Nike has become more proactive in addressing criticisms of the company. Nike representatives have participated in forums at professional [Page 246]associations such as the Academy of Management and the International Association of Business and Society. Nike has also welcomed researchers into its factories and it has hosted college study abroad groups visiting countries in which its subcontractors operate. How much of this response was due to a sincere belief that the company had acted wrongly in the treatment of its subcontractor workers and how much was due to business expediency to silence the critics is uncertain.
Nike is one of the first companies to publicly publish a list of its active subcontractors/suppliers in an effort to establish transparency and also to gain efficiency for monitoring and inspections by collaborating with other companies who use the same subcontractors. As of May 2005, Nike is also recognized by four institutions that gauge according to their own specific criteria whether a company should be considered a socially responsible investment. These are FTSE4Good Index Series, Dow Jones Sustainability Index, Ethibel Investment Register, and KLD Broad Market SocialSM Index.
Furthermore, Nike has also published a 113-page Corporate Responsibility Report FY04 freely available on its website. While the company painstakingly details its efforts at engaging its five most important stakeholders, namely consumers, shareholders, business partners, employees, and the community, it recognizes that for the future they need to focus on the following priority issues with respect to workers and factories: freedom of association; harassment, abuse, and grievance procedures; payment of wages; hours of work; environment; and safety and health. The report notes that its biggest challenge is in China, which accounts for 180,000 contract workers in more than 110 factories. China accounts for 36% of its manu factured footwear and has a large and fast-growing domestic market for Nike goods. However, upholding its code of conduct in China is a difficult problem for Nike due to local laws that prevent independent labor organizing. Several other problems exist, such as the lack of clarity about the law and its monitoring, falsification of information related to wages by factories, and social problems caused by temporary migration of workers from rural China to manufacturing provinces. Nike believes that engagement with its stakeholders, including the Chinese government, and building partnerships in China is the long-term solution to improving labor conditions there.
Because Nike has been so closely tied to the sweatshop labor controversy, the underlying debate about the ethics of sweatshop labor is particularly relevant to the Nike case. Many critics have argued that companies like Nike have [Page 247]a responsibility to see to it that their subcontractors provide better than market-derived or legally mandated wages and working conditions in their operations in developing countries. Others though have argued that if such companies were to do so, there would be less incentive to invest in these developing countries and the benefits of economic growth would be forfeited.
As of this writing, critics and supporters of Nike are still very far apart on the quality of working conditions and the extent of labor abuses in Nike subcontractor factories. However, there does seem to be fairly widespread agreement that the criticisms leveled against the company have brought about an improvement in these conditions since the controversy started.—andFurther Readings2003). Sweatshops and respect for persons. Business Ethics Quarterly, 13(2), 221–242., & (1992, August). The new free trade heel: Nike's profits jump on the backs of Asian workers. Harper's Magazine, 285, 46–47.(1997). The great non-debate over international sweatshops. British Academy of Management Annual Conference Proceedings, September, 240–265.(Nike homepage. Retrieved November 28, 2005, from http://www.nikebiz.com2002). Hitting the wall: Nike and international labor practices. Boston: Harvard Business School. (Original work published 2000)(1997, November 8). Nike shoe plant in Vietnam is called unsafe for workers. New York Times, p. A1.(2001). Nike and its critics. Organization & Environment, 14(2), 207–237. http://dx.doi.org/10.1177/1086026601142007([Page 248]Martha Stewart (1941-)
Martha Stewart was a very popular and influential American celebrity in the late 1990s and early 2000s, a virtual media icon who ran afoul of the law and served prison time. Stewart was born on August 3, 1941, in Jersey City, New Jersey, and when she was 3 years old, her parents, Edward and Martha Kostyra, moved her and her five siblings to Nutley, New Jersey. Because of her legendarily strong work ethic and character, she received a partial scholarship to Barnard College in New York City. To pay the remainder of her tuition, she worked as a model for television commercials and magazines. At Barnard College, she met her husband Andrew Stewart, and they married during her sophomore year in 1961, just before she graduated with a bachelor's degree in European history and architectural history. In 1965, she had her daughter Alexis, and within 2 years she became a stockbroker. When recession hit Wall Street in 1973, Stewart decided to leave the brokerage and move to Westport, Connecticut, with her husband and daughter.
Stewart became a writer and columnist for the magazine House Beautiful, while simultaneously serving in a similar capacity for the New York Times. In 1982, she coauthored her first book, Entertaining, and shortly thereafter she started publication of her own magazine, Martha Stewart Living. By this time, she was a regular guest on the morning network talk shows, and she even appeared on The Tonight Show and Late Night with David Letterman. In 1993, she began her own syndicated television program, Martha Stewart Living, and she became a well-known and much-loved celebrity, her empire capped by the creation of Martha Stewart Living Omnimedia, Inc. She was the American guru of housekeeping, cooking, gardening, decorating, crafts, and holiday parties.
However, her period of prosperity lasted only about a decade. In 2004, at age 62, Martha Stewart stood trial on charges of conspiracy, obstruction, securities fraud, and lying to investigators in connection with the sale of her stock in ImClone, a biotechnology company. Standing trial alongside Stewart was her former stockbroker, 41-year-old Peter Bacanovic, who faced the same charges in addition to perjury and falsifying documents. Stewart's troubles stemmed from her sale of shares of ImClone on December 27, 2001, one day [Page 249]before the FDA announced it had rejected the application for approval of ImClone's cancer drug, Erbitux—news that caused the company's stock prices to plummet.
It was Stewart's response to the subsequent federal probe that ultimately proved incriminating as prosecutors claimed that she not only conspired with Bacanovic to cover up evidence concerning the sale but also lied publicly about her involvement in the scandal to protect the stock price of her own company, Martha Stewart Omnimedia. Bacanovic claimed he and Stewart sold her ImClone stock after having a “selling conversation” on December 20, 2001, a week before the sale was executed. During that conversation, Bacanovic said he and Stewart reviewed her entire portfolio, not just her shares of ImClone, and agreed to sell her shares in the company if the price sunk to $60.
Although she made $51,000 by selling her shares in advance of the announcement, Stewart was never charged with insider trading. Stewart, ever the domestic diva, even while facing a maximum of 30 years in prison, would join her daughter Alexis every morning before court to have their hair and makeup done. Stewart was convicted in March 2004 of lying to investigators and conspiring with Bacanovic to cover up the circumstances surrounding the stock trade during the federal probe that followed. On July 16, 2004, Martha Stewart was sentenced to 5 months behind bars and 5 months house arrest, with an additional 2 years probation and $30,000 fine.
Stewart issued statements proclaiming her innocence before, during, and after the trial. Her supporters criticized the investigation as being sexist, saying that federal agents unfairly targeted one of the richest women in the world (whose wealth directly resulted from her reputation, the public perceptions of her) while ignoring far worse criminals. In a sense, one's perceptions of and attitudes about this case reflect the mind-set, background, and perspective of the perceiver as much if not more than the facts about Martha Stewart and her fall from the pinnacle of American society.—, , andFurther ReadingsAcademy of Achievement. (2005, March 4). The Catherine B. Reynolds Foundation and Exxon Mobile. Retrieved from http://www.achievement.org/autodoc/page/steObio-1[Page 250]2002). Biography on Martha Stewart. Retrieved from http://lala.essortment.com/biographyonmar_rino.htm(The reinvention of Martha Stewart. (2006, November 6). BusinessWeek Online. Retrieved from http://www.businessweek.com/magazine/content/06_45/b4008076.htm?campaign_id=rss_daily[Page 251]Tylenol Tampering
One of the most significant examples of business ethics and corporate crisis management involved the actions of Johnson & Johnson (J&J) during the Tylenol tampering crisis. In the fall of 1982, a subsidiary of United States–based J&J, McNeil Consumer Products, learned that seven people in Chicago had died from taking Extra Strength Tylenol capsules that had been laced with cyanide. The management was convinced that the tampering did not occur at its plants, meaning that it must have taken place once the product had reached Illinois. J&J faced a dilemma, how best to handle the crisis without damaging the reputation of the company, when the company had quickly established that it could not be held liable for the tampering.
Reports on the firm's decision-making process during the crisis indicate that the company placed the safety of its customers first, before considering profit implications. A nationwide voluntary recall took place, involving approximately 31 million bottles of Tylenol, representing more than $100 million in sales. Consumers were told not to use any type of Tylenol product until the cause of the tampering had been established. Production and advertising of Tylenol ceased. The company offered to exchange all Tylenol capsules that had been purchased for Tylenol tablets. Relations were quickly established with the Chicago police, the FBI, and the Food and Drug Administration (FDA). A toll-free crisis phone line was set up for concerned consumers. Senior executives, including CEO James Burke, were readily accessible to the media. As part of a longer-term response, the company reintroduced Tylenol capsules with new triple-seal tamper-resistant packaging. Despite the firm having its market share drop from 33% to 18%, it wasn't too long before the company was able to recover its position. Following a second tampering incident in 1986, J&J made the decision to offer Tylenol in a caplet form, as opposed to a capsule form. No one was ever convicted of the tampering incidents and subsequent deaths.
Probably the most significant aspect of how J&J handled the crisis was the apparent corporate culture that existed at the time. According to J&J executives, turning to the firm's credo enabled the firm to make the right early [Page 252]decisions that led to the comeback phase. The credo, initially written in 1943, stated that the firm had obligations to society beyond merely profit maximization or enhancing shareholder value.
As a direct consequence of the Tylenol murders, U.S. Congress approved in 1983 a new Tylenol Bill that made maliciously tampering with consumer products a federal offense. In 1989, the FDA set national requirements for all over-the-counter products to be tamper-resistant.
Unlike many other firms, which often fail to react quickly on discovering potential danger to their stakeholders, J&J is remembered as a company that possessed an ethical corporate culture enabling the firm to handle the Tylenol tampering crisis quickly, openly, and honestly. By doing so, J&J was able to protect and enhance its corporate reputation into the future.—Further Readings2005). Johnson and Johnson's Tylenol scare: The classic example of responsible crisis management. In R. F.Hartley (Ed.), Business ethics: Mistakes and successes (pp. 303–314). Hoboken, NJ: Wiley.(1989). A matter of trust. Management Accounting, 71(6), 12–13.(2006). The Tylenol crisis: How effective public relations saved Johnson and Johnson. In J. W.Weiss (Ed.), Business ethics: A stakeholder and issues management approach (pp. 89–96). Mason, OH: Thomson/South-Western.(1983). An anniversary review and critique: The Tylenol crisis/reply. Public Relations Review, 9(3), 24–35. http://dx.doi.org/10.1016/S0363-8111%2883%2980182-9, & (
Appendix B: Directory of CSR-Related Organizations and Internet Links[Page 253]
- African Institute of Corporate Citizenship, http://www.aiccafrica.org/
The African Institute of Corporate Citizenship (AICC) is a nongovernmental organisation committed to promoting responsible growth and competitiveness in Africa by changing the way companies do business in Africa.
- Aspen Institute Business and Society Program (formerly Aspen ISIB), http://www.aspeninstitute.org/isib/
The Business and Society Program is an independently funded policy program at the Aspen Institute, dedicated to increasing the supply of business leaders who understand and seek to balance the complex relationship between business success and social and environmental progress.
- Association for Independent Corporate Sustainability and Responsibility Research, http://www.csrr-qs.org/
A new European standard (CSRR-QS 1.0) has been drawn up with the objective of promoting confidence in those Groups performing Corporate Sustainability and Responsibility Research (CSRR). CSRR-QS 1.0 is the first quality standard conceived and worked out at sector level in the field of CSR and SRI research and analysis. The project was initiated, supported and funded by the European Commission, Employment and Social Affairs DG.[Page 254]
- As You Sow Foundation, http://www.asyousow.org/
As You Sow is a non-profit organization dedicated to promoting corporate social responsibility.
- Beyond Grey Pinstripes, http://www.beyondgreypinstripes.org/
Beyond Grey Pinstripes highlights the most innovative MBA programs and faculty infusing environmental and social impact management into the business school curriculum.
- Business Alliance for Local Living Economies (BALLE)
- Building Economies for the Common Good, http://www.livingeconomies.org/BALLE/
BALLE Mission: To create, strengthen and connect local business networks dedicated to building strong Local Living Economies.
BALLE Vision: We envision a sustainable global economy as a network of Local Living Economies. Living economies sustain community life and natural life as well as long-term economic viability.
- Business for Social Responsibility (BSR), http://www.bsr.org/
Business for Social Responsibility (BSR) is a global nonprofit organization that helps member companies achieve commercial success in ways that respect ethical values, people, communities and the environment. BSR member companies have nearly $2 trillion in combined annual revenues and employ more than six million workers around the world.
- Business in the Community, http://www.bitc.org.uk/
Business in the Community is a unique movement of companies across the UK committed to continually improving their positive impact on society, with a core membership of 700 companies, including 80% of the FTSE 100.
- Business Roundtable Institute for Corporate Ethics, http://www.businessroundtable.org/ also at: http://www.darden.edu/corporate-ethics/
This Institute is a bold investment that will bring together the best educators in the field of ethics, active business leaders and business [Page 255]school students to forge a new and lasting link between ethical behavior and business practices.
- Canadian Business for Social Responsibility (CBSR), http://www.cbsr.ca/
Founded in 1995, CBSR is a non-profit, business-led, national membership organization of Canadian companies that have made a commitment to operate in a socially, environmentally and financially responsible manner, recognizing the interests of their stakeholders, including investors, customers, employees, business partners, local communities, the environment and society at large.
- Caux Round Table, http://www.cauxroundtable.org/
The Caux Round Table (CRT) is a group of senior business leaders from Europe, Japan and North America who are committed to the promotion of principled business leadership. The CRT believes that business has a crucial role in identifying and promoting sustainable and equitable solutions to key global issues affecting the physical, social and economic environments.
- Centre for Business Relationships, Accountability, Sustainability and Society (BRASS), http://www.brass.cf.ac.uk/
The ESRC Centre for Business Relationships, Accountability, Sustainability and Society exists to understand and promote the key issues of sustainability, accountability and social responsiveness, through research into key business relationships.
- Center for Corporate Change, http://www.vailleadership.org/programs/index.htm
The Center for Corporate Change, a component of the Vail Leadership Institute, was established out of a concern for the state of corporate ethics. It is based on the premise that business is not a game but an integral component of our nation's democratic capitalistic society.
- Center for Corporate Citizenship at Boston College, http://www.bcccc.net/
The Center for Corporate Citizenship is a leading resource on corporate citizenship, providing research, executive education, consultation and convenings on citizenship topics. Our mission is to establish [Page 256]corporate citizenship as a business essential, with the goal that all companies act as economic and social assets by integrating social interests with other core business objectives.
- Center for Corporate Citizenship (U.S. Chamber of Commerce), http://www.uschamber.com/ccc/
The Center for Corporate Citizenship is a business service organization of the U.S. Chamber of Commerce. It exists to enable and facilitate corporate civic and humanitarian initiatives particularly in terms of civic engagement, economic development, economic security, and disaster management/economic recovery.
- Centre for Corporate Social Responsibility, http://www.centreforcsr.org.sg/
The Centre for CSR, an independent not-for-profit organisation, was set up on 17th April 2003 by a group of like-minded and civic-conscious individuals and seeks to raise the awareness of the community at large about the importance of Corporate Social Responsibility (CSR)…. The Centre for CSR aims to be a national platform for the discussion and understanding of CSR and to be a leading Centre for CSR globally and more particularly in the Asia Pacific.
- Center for Economic and Social Justice, http://www.cesj.org/
The Center for Economic and Social Justice (CESJ), established in 1984, promotes a free enterprise approach to global economic justice through expanded capital ownership. CESJ is a non-profit, non-partisan, ecumenical, all-volunteer organization with an educational and research mission.
- Center for Ethical Leadership, Seattle, http://www.ethicalleadership.org/
The Center motivates people to practice ethical leadership, inspires institutions to create cultures of integrity and gathers the community to animate cultural change, all for the common good.
- Center for Public Integrity, http://www.publicintegrity.org/
The mission of the Center for Public Integrity is to provide the American people with the findings of our investigations and analyses [Page 257]of public service, government accountability and ethics related issues.
- CEOs for Cities, http://www.ceosforcities.org/
CEOs for Cities is a national bipartisan alliance of mayors, corporate executives, university presidents and other nonprofit leaders. Its mission is to advance the economic competitiveness of cities. Its national meetings and research products underscore the organization's basic tenet, which is that urban economies are strengthened when public and private sectors come together to collaborate on economic development policy-making and practice.
- CERES Network for Change, Coalition for Environmentally Responsible Economies, http://www.ceres.org/
Today, it is often difficult for corporations, activists and socially responsible investors to have honest, meaningful dialogue on corporations' environmental and social practices. CERES provides an innovative forum for this kind of exchange and a unique opportunity for real accountability and real results.
- Community Business Limited, http://www.communitybusiness.org.hk/
Community Business Limited is committed to working with companies on corporate social responsibility in Hong Kong.
- Conversations with Disbelievers, http://www.conversations-with-disbelievers.net/
Welcome to the Conversations with Disbelievers website, which for the first time brings together much of the available quantitative evidence that addressing social challenges can help businesses improve their financial bottom lines…. The website is designed to be used by business managers, nonprofit leaders, consultants and public policy makers alike to provide practical guidance on how best to use the available evidence in encouraging businesses to address social objectives.
- Corporate Citizenship Unit, http://users.wbs.warwick.ac.uk/group/ccu/
The Corporate Citizenship Unit (CCU) aims to become a globally recognised centre of excellence in the area of research and teaching in corporate citizenship by bringing together diverse people from [Page 258]business, government, and civil society organisations to examine changes in the relationship between corporations, states and communities.
- Corporate Culture, http://www.communicatingforgood.co.uk/
This website is the definitive online resource of customer-led CSR communications.
- Corporate Responsibility, http://www.corporateresponsibility.nl/
This website is designed to function as a platform for the dissemination of information on the subject of Corporate [Social] Responsibility.
- Corporate Social Responsibility Forum (part of the Prince of Wales Business Leaders Forum), http://www.csrforum.com/
The Prince of Wales Business Leaders Forum is an international charity which was founded in 1990 to promote socially responsible business practices that benefit business and society, and which help to achieve socially, economically, and environmentally sustainable development. The Forum works at the very highest levels in 60 of the world's leading multinational companies, and is active in some 30 emerging and transition economies.
- Corporate Social Responsibility Forum, http://www.csrforum.com/
The International Business Leaders Forum is an international educational charity set up in 1990 to promote responsible business practices internationally that benefit business and society, and which help to achieve social, economic and environmentally sustainable development, particularly in new and emerging market economies.
- Council for Ethics in Economics, http://www.businessethics.org/
The Council for Ethics in Economics is a worldwide association of leaders in business, education, and other professions working together to strengthen the ethical fabric of business and economic life. The Council identifies and responds to issues important for ethical economic practices and assists in the resolution of these issues.[Page 259]
- CR Academy, http://www.csracademy.org.uk/
The CR Academy aims to promote CSR learning through the first dedicated CSR Com petency Framework. It is for companies of all sizes as well as for UK educational institutions.
- CSR Australia, http://www.csra.com.au/
Founded in 2003, Corporate Social Responsibility Australia, Inc., is a national not-for-profit-membership-based Incorporated Association. Its mission is to help business achieve profitability, competitiveness and sustainable growth through the continuous improvement of skills, knowledge, and ethical behaviour and by applying the principles of Corporate Social Responsibility.
- CSR Europe, http://www.csreurope.org/
CSR Europe is the business-to-business network for Corporate Social Responsibility in Europe. We are a membership-based organization. Our mission is to help companies achieve profitability, sustainable growth and human progress by placing Corporate Social Responsibility (CSR) in the mainstream of business practice.
- CSR Meetup Groups, http://csr.meetup.com/
Meet other local people interested in implementing or learning about corporate, values-based decision making.
- CSR Watch, http://www.csrwatch.com/
Your eye on the anti-business movement.
- EMPRESA, http://www.empresa.org/
EMPRESA is an American alliance of CSR-based business organizations that promotes corporate social responsibility (CSR) throughout the Americas.
- Equal Exchange, http://www.equalexchange.com/
Equal Exchange was founded in 1986 to create a new approach to trade, one that includes informed consumers, honest and fair trade relationships, and cooperative principles. As a worker-owned co-op, [Page 260]we have accomplished this by offering consumers fairly traded gourmet coffee direct from small-scale farmer co-ops in Latin America, Africa and Asia.
- EU Multi-Stakeholder Forum on CSR, http://forum.europa.eu.int/irc/empl/csr_eu_multi_stakeholder_forum/info/data/en/csr%20ems%20forum.htm
The European Multi-Stakeholder Forum on Corporate Social Responsibility (CSR EMS Forum), chaired by the Commission, brings together European representative organisations of employers, business networks, trade unions and NGOs, to promote innovation, convergence, and transparency in existing CSR practices and tools. The Forum's mandate was approved at the launch on 16th October 2002.
- CSR Final Report, http://europa.eu.int/comm/enterprise/csr/documents.htm
- European Academy of Business in Society, http://www.eabis.org/
The European Academy of Business in Society (EABIS) is a unique alliance of academic institutions, companies, and other stakeholders committed to integrating business in society into the heart of business theory and practice in Europe.
- European Business Campaign on CSR, http://www.csrcampaign.org/
The European Business Campaign on Corporate Social Responsibility has set itself the goal of mobilising 500,000 business people and partners to integrate CSR into their core business by 2005.
- European Business Ethics Network, http://www.eben.org/
The European Business Ethics Network, EBEN, is the only International network dedicated wholly to the promotion of business ethics in European private industry, public sector, voluntary organizations, and academia.
- European Union's CSR website, http://europa.eu.int/comm/employment_social/soc-dial/csr/csr_index.htm
- Useful CSR Internet Links: http://europa.eu.int/comm/employment_social/soc-dial/csr/csr_links.htm [Page 261]
- Foundation for Global Community—Business and Sustainability, http://www.globalcommunity.org/business/index.shtml
The Foundation for Global Community's Business and Sustainability Group (BSG) focuses on educating local companies about the principles of sustainable development and promoting a broader measurement of business success, namely the Triple Bottom Line.
- Global Exchange, http://www.globalexchange.org/
Global Exchange is a human rights organization dedicated to promoting environmental, political, and social justice around the world. Since our founding in 1988, we have been striving to increase global awareness among the U.S. public while building international partnerships around the world.
- Global Reporting Initiative (GRI), http://www.globalreporting.org/
Recognized by the recent UN World Summit on Sustainable Development, the Global Reporting Initiative (GRI) is an independent global institution which is developing a generally accepted framework for sustainability reporting. The aim of the GRI Guidelines is to enable companies and other organizations to prepare comparable triple bottom line reports on their economic, environmental, and social performance.
- Global Sullivan Principles of Social Responsibility, http://globalsullivanprinciples.org/
The objectives of the Global Sullivan Principles are to support economic, social, and political justice by companies where they do business; to support human rights and to encourage equal opportunity at all levels of employment, including racial and gender diversity on decision making committees and boards; to train and advance dis-advantaged workers for technical, supervisory, and management opportunities; and to assist with greater tolerance and understanding among peoples; thereby, helping to improve the quality of life for communities, workers and children with dignity and equality.
- Group of 77 at the United Nations1, http://www.g77.org/
As the largest Third World coalition in the United Nations, the Group of 77 provides the means for the developing world to articulate and [Page 262]promote its collective economic interests and enhance its joint negotiating capacity on all major international economic issues in the United Nations system, and promote economic and technical cooperation among developing countries.
- Heartland Institute, http://www.thoughtleadergathering.com/
Founded in 1995 by Craig and Patricia Neal, Heartland Institute creates Essential Conversations among individuals and within organizations to help bring about the systemic change needed in these extraordinary times…. Our programs are anchored in the belief that essential conversations among leaders will transform our organizations and the world.
- ILO Tripartite Declaration of Principles Concerning MNEs and Social Policy, http://www.ilo.org/public/english/standards/norm/sources/mne.htm
- Institute for Global Ethics, http://www.globalethics.org/
Mission: To promote ethical behavior in individuals, institutions, and nations through research, public discourse, and practical action.
- Interfaith Center on Corporate Responsibility, http://www.iccr.org/
For thirty years the Interfaith Center on Corporate Responsibility (ICCR) has been a leader of the corporate social responsibility movement. ICCR's membership is an association of 275 faith-based institutional investors, including national denominations, religious communities, pension funds, endowments, hospital corporations, economic development funds and publishing companies. ICCR and its members press companies to be socially and environmentally responsible.
- International Association for Business and Society (IABS), http://www.iabs.net/
IABS is a learned society devoted to research and teaching about the relationships between business, government, and society.
- International Business Ethics Institute, http://www.business-ethics.org/
Fostering global business practices to promote equitable economic development, resource sustainability and just forms of government.[Page 263]
- International Business Leaders Forum, http://www.iblf.org/, http://www.iblf.org/csr/csrwebassist.nsf/content/f1.html
The IBLF is an international educational charity set up in 1990 to promote responsible business practices internationally that benefit business and society, and which help to achieve social, economic, and environmentally sustainable development, particularly in new and emerging market economies.
- International Centre for Business Performance and Corporate Responsibility, http://mubs.mdx.ac.uk/Research/Research_Centres/icbpcr/
The Centre is located at Middlesex University's Business School, and aims to be an internationally-renowned Centre of Excellence in the promotion of corporate responsibility and its relationship to business performance in both financial and non-financial dimensions.
- International Centre for Corporate Social Responsibility, http://www.nottingham.ac.uk/business/ICCSR/
The ICCSR engages in mainstream teaching and research in the broad area of corporate social responsibility.
- International Institute for Sustainable Development, http://www.iisd.org/
The International Institute for Sustainable Development contributes to sustainable development by advancing policy recommendations on international trade and investment, economic policy, climate change, measurement and indicators, and natural resources management.
- Japan for Sustainability, http://www.japanfs.org/en/business/reports.html
Here are links to environmental/sustainability reports of Japanese companies. The reports disclose their policies, strategies and performance in environmental, social, and/or sustainability management.
- LifeWorth, http://www.lifeworth.com/
As more of us work on corporate responsibility, sustainable business and responsible investment, we are forming a new profession and a new social movement…. We support this new movement and profession by bringing together people and organizations with common values.[Page 264]
- Net Impact, http://www.net-impact.org/
Net Impact is a powerful and influential network of over 10,000 MBA students and professionals committed to using the power of business to create a better world. Through education, career resources, events, and access to an international network, Net Impact helps members to utilize their business skills for positive social change.
- New Academy of Business, http://www.new-academy.ac.uk/
The New Academy of Business was founded in 1995 by Anita Roddick to provide entrepreneurs, managers, and organisational leaders with the insights and capacities necessary to respond progressively to the emerging challenges of sustainability and organisational responsibility.
- Nordic Partnership, http://www.nordicpartnership.org/
The Nordic Partnership is an NGO-business network founded in 2001 by the World Wide Fund for Nature (WWF), Danish media centre Monday Morning, and key corporate players operating in the Nordic region…. Using a partnership approach, the members of the Nordic Partnership work together to find new ways of making sustainable initiatives more attractive and rewarding to business. By doing this, we aim to provide fresh perspectives, challenges, and recommendations to the rules of the game that relate to sustainable development.
- Organization for Economic Co-operation and Development (OECD), http://www.oecd.org/department/0,2688,en_2649_33765_1_1_1_1_1,00.html
The emergence of private initiatives for corporate responsibility— including the development of codes of conduct, management systems for improving compliance with these codes, and non-financial reporting standards—has been an important trend in international business over the last 25 years. The Investment Committee's work in this area is part of its broader efforts to support implementation of the OECD Guidelines for Multinational Enterprises and to enhance the contribution of international investments to sustainable development.[Page 265]
- Procott, http://www.procott.org/
A procott (flipside of boycott) is a movement educating and organizing around conscious consumer efforts to support the production and purchase of earth/justice-friendly goods and services.
- Project Sigma, http://www.projectsigma.com/
Project SIGMA aims to provide clear, practical advice to organisations to help them make a meaningful contribution to sustainable development.
- Public Citizen, http://www.citizen.org/
Public Citizen is a national, nonprofit consumer advocacy organization founded by Ralph Nader in 1971 to represent consumer interests in Congress, the executive branch and the courts.
We fight for openness and democratic accountability in government, for the right of consumers to seek redress in the courts; for clean, safe, and sustainable energy sources; for social and economic justice in trade policies; for strong health, safety, and environmental protections; and for safe, effective and affordable prescription drugs and health care.
- Social Venture Network, http://www.svn.org/
Founded in 1987 by some of the nation's most visionary leaders in socially responsible entrepreneurship and investment, Social Venture Network (SVN) is a nonprofit network committed to building a just and sustainable world through business.
- Society for Business Ethics, http://www.societyforbusinessethics.org/
The Society for Business Ethics (SBE) is an international organization of scholars engaged in the academic study of business ethics and others with interest in the field.
- Spirit in Business, http://www.spiritinbusiness.org/
Mission: To connect leaders in a global community of inquiry, learning and action, to release the creative power of individuals and organizations for the benefit of the whole.[Page 266]
- Sustainable Business Institute, http://www.sustainablebusiness.org/
The Sustainable Business Institute (SBI) is a non-profit, non-partisan organization dedicated to bringing about increased understanding of, and commitment to, the concept of sustainability within business and communities worldwide.
- Sustainability Education Center, http://www.sustainabilityed.org/
The Sustainability Education Center (SEC) was created in 1995 in response to the growing need for educational materials and professional development focused on sustainability.
- Tomorrow's Company, http://www.tomorrowscompany.com/
Tomorrow's Company represents a practical future of sustainable success which makes sense to shareholders and to society. The Centre for Tomorrow's Company is a think-tank and catalyst, researching and stimulating the development of a new agenda for business. Our purpose is to create, with business, a future for business which makes equal sense to staff, shareholders, and society.
- UN Global Compact Principles, http://www.unglobalcompact.org/
Through the power of collective action, the Global Compact seeks to advance responsible corporate citizenship so that business can be part of the solution to the challenges of globalisation.
- UN Millennium Development Goals, http://www.un.org/millenniumgoals/
By the year 2015, all 191 United Nation Member States have pledged to meet these goals.
- Win-Win Partners, http://winwinpartner.com/
Win-Win Partners are companies and organizations achieving competitive advantage through community investment.
- World Business Council for Sustainable Development, http://www.wbcsd.org/
The World Business Council for Sustainable Development (WBCSD) is a coalition of 160 international companies united by a shared [Page 267]commitment to sustainable development via the three pillars of economic growth, ecological balance, and social progress.
- World Resources Institute, http://www.wri.org/
World Resources Institute is an independent nonprofit organization with a staff of more than 100 scientists, economists, policy experts, business analysts, statistical analysts, mapmakers, and communicators working to protect the Earth and improve people's lives.
1. “The G77 (the descendent of the former nonaligned countries) accounts for nearly 80 percent of the world's population,” Noam Chomsky, The Crimes of “Intcom,” Foreign Policy, September/October 2002, pp. 34–35.[Page 268]
Appendix C: Directory of Online CSR Information Sources and Publications[Page 269]
- Brooklyn Bridge Newsletter—TBLI Group, http://www.tbli.org/index-newsletter.html
Brooklyn Bridge publishes a digital Newsletter on SRI/CSR every month.
- Business and Human Rights Resource Centre, http://www.business-humanrights.org/
The Business & Human Rights Resource Centre is an independent, international, nonprofit organisation, in a collaborative partnership with Amnesty International sections and leading academic institutions. Our online library covers over 1,800 companies, over 160 countries, over 150 topics.
- Business and Society, http://www.sagepub.com/journalManuscript.aspx?pid=131
Business & Society publishes the most outstanding scholarship on social issues and ethics, and their impact and influence on organizations. In this fast-growing, ever-changing, and always challenging field of study, Business & Society is the only peer-reviewed scholarly journal devoted entirely to research, discussion, and analysis on the relationship between business and society.
- Business Ethics Magazine, http://business-ethics.com/
The mission of Business Ethics is to promote ethical business practices, to serve that growing community of professionals striving to work and invest in responsible ways.[Page 270]
- Business Ethics Magazine's Corporate Social Responsibility Report, 100 Best Corporate Citizens, http://www.business-ethics.com/whats_new/100best_2005.html
- Business Ethics Quarterly, http://www.societyforbusinessethics.org/beq.htm
Business Ethics Quarterly (BEQ) is the journal of the Society for Business Ethics. BEQ publishes scholarly articles and book reviews on all aspects of ethics in business, especially those that raise conceptual, methodological, practical, or theoretical issues.
- Chronicle of Philanthropy, http://philanthropy.com/
The Chronicle of Philanthropy is the newspaper of the nonprofit world. It is the No. 1 news source, in print and online, for charity leaders, fund raisers, grant makers, and other people involved in the philanthropic enterprise.
- Common Dreams News Center, http://www.commondreams.org/
Breaking news and views for the progressive community.
- CSR Online Survey, http://www.csr-survey.org/
How companies communicate CSR to customers and shareholders, is vital. It says as much about their brand as do their products and services. It will affect not only their reputation in the city, but also with their customers. The aim of this survey was to look at how well— or badly—Britain's top companies are communicating their CSR activities.
- CSR Wire—Corporate Social Responsibility Newswire Service, http://www.csrwire.com/
CSRwire seeks to promote the growth of corporate responsibility and sustainability through solutions-based information and positive examples of corporate practices.
- CSR Wire—CSR Directory, http://www.csrwire.com/directory/
CSRwire and the SRI World Group technical team have developed this searchable, online version of the CSR Directory as a free service to the CSR community.[Page 271]
- Electronic Journal of Business Ethics and Organization Studies, http://ejbo.jyu.fi/index.cgi?page=cover
Electronic Journal of Business Ethics and Organization Studies, the aim of which is to promote research and practise of business and organization ethics.
- Ethical Corporation Magazine, http://www.ethicalcorp.com/
Ethical Corporation Magazine is an independent business publication for corporate responsibility, producing 12 issues per year.
- Ethical Performance, http://www.ethicalperformance.com/
Ethical Performance is a monthly newsletter for professionals with a corporate social responsibility or socially responsible investment brief. It is the only independent business newsletter to cover trends in
- social reporting
- corporate governance
- ethical codes of practice
- socially responsible investment
- risk and reputation management
- supply chain monitoring.
- Ethics in Economics Quarterly, http://www.businessethics.org/ethicsq.htm
The quarterly publication of the Council for Ethics in Economics.
- ETHICOMP Journal, http://www.ccsr.cse.dmu.ac.uk/journal/
The ETHICOMP Journal aims to further the work of the conference series—recognised as one of the premier international events on computer ethics and social responsibility attended by delegates from all over the world.
- http://EurActiv.com (Corporate Social Responsibility page), http://www.euractiv.com/Section?idNum=3750340
http://EurActiv.com is now the leading online media on European Union policies.[Page 272]
- Faith in Business quarterly, http://www.fibq.org/
Faith in Business is a quarterly journal relating Christian faith and values to the business world.
- Global Corruption Report, http://www.globalcorruptionreport.org/
The Global Corruption Report … is the new publication of Transparency International (TI), the leading global anti-corruption NGO. It provides an overview of the state of corruption around the globe.
- http://Greenbiz.com, http://www.greenbiz.com/
The nonprofit, nonpartisan http://GreenBiz.com works to harness the power of technology to bring environmental information, resources, and tools to the mainstream business community.
- GreenMoney Journal, http://www.greenmoneyjournal.com/
The GreenMoney Journal encourages and promotes the awareness of socially & environmentally responsible business, investing, and consumer resources in publications & online.
- Journal of Business Ethics, http://www.kluweronline.com/issn/0167-4544
The Journal of Business Ethics publishes original articles from a wide variety of methodological and disciplinary perspectives concerning ethical issues related to business.
- Journal of Corporate Citizenship, http://www.greenleaf-publishing.com/jcc/jcchome.htm
The Journal of Corporate Citizenship (JCC) aims to publish the best ideas integrating the theory and practice of corporate citizenship in a format that is readable, accessible, engaging, interesting, and useful for readers in business, consultancy, government, NGOs and, academia.
- mallenbaker.net, http://www.mallenbaker.net/csr/
This site is part of the personal site of Mallen Baker—Development Director for Business in the Community. It is an expression of my own interest and concern in how companies respond to the agenda for corporate citizenship—the growing need to manage issues that affect [Page 273]their business reputation—and to respond to the growing needs and concerns of a range of different stakeholders.
- New Academy Review, http://www.new-academy-review.com/
The International Journal of Corporate Social Responsibility, Sustainability, Leadership and Ethics.
- Nonprofit Management Educational Resources, http://www.uwex.edu/li/index.html
The Learner Resource Center provides you with a number of resources on the web that could provide you with assistance in a variety of nonprofit management and leadership issues.
- NonProfit Times, http://www.nptimes.com/
The leading business publication for nonprofit management.
- NPT Top 100
The leading in-depth study of America's Top 100 Nonprofits.
- OneWorld.net, http://www.oneworld.net/
The OneWorld network and portal brings you the latest news, action, campaigns and organisations in human rights and global issues across five continents and in 11 different languages, published across its international site, regional editions, and thematic channels.
- Simon Zadek, http://www.zadek.net/
This site is a resource area for people concerned with improving the social, environmental, and economic performance of business.
- http://Socialfunds.com, http://www.socialfunds.com/
http://SocialFunds.com features over 10,000 pages of information on SRI mutual funds, community investments, corporate research, share-owner actions, and daily social investment news.
- Socially Responsible Investing (SRI) Compass, http://www.sricompass.org/
The SRI Compass is the first European online resource featuring all existing green and ethical retail funds and indices in Europe. The SRI [Page 274]Compass is the result of a joint initiative by CSR Europe and the SiRi Group with the support of Euronext.
- Spirit in Business, http://www.spiritinbusiness.org/
Spirit in Business is for business people who care.
Spirit in Business is about an economy that works for everyone.
- Stanford Social Innovation Review, http://www.ssireview.com/?stanford
Discover powerful insights from leading executives and world-class faculty. Stanford Social Innovation Review presents the best ideas in nonprofit management, philanthropy, and corporate citizenship. Find out what works and what doesn't. And how to strengthen your social impact.
- http://SustainableBusiness.com, http://www.sustainablebusiness.com/
Vision: A world where human activities live in harmony with earth's carrying capacity.
- Worthwhile Magazine, http://www.worthwhilemag.com/
The editorial mission of Worthwhile is to put purpose and passion on the same plane as profit. Worthwhile offers a roadmap for business success that is more personally fulfilling and socially responsible. We live by the motto that it is impossible to have a meaningful life without meaningful work.