Corporate Social Responsibility and Relocation Relocation Challenges and Opportunities 2829 June 200

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Corporate Social Responsibility and
RelocationRelocation Challenges and
Opportunities 28-29 June 2006European Economic
and Social Committee

• Professor Nigel Roome Daniel Janssen Chair of
  Corporate Social Responsibility, Solvay Business
  School, ULB

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Structure

• Background and Definitions
• CSR issues raised by relocation
• Management challenge arising from diversity in
  CSR encountered in relocation
• Conclusions

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Corporate Social Responsibility A definition

• The principal purpose of enterprise is the
  creation of value for shareholders. CSR is seen
  as the voluntary management of relationships with
  stakeholders (social, environmental and
  economic) as a way to provide for the continued
  existence of an enterprise so that it can
  pursue its chosen purpose
• However, CSR activities do affect the way an
  enterprise fulfils its purpose as it offers
• a basis for protecting the value of the existing
  assets of the enterprise
• a stimulus for creating value through innovation
  in the activities of the enterprise -
  technologies, products and services, management
  know-how and business models

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Contention

• In managerial/enterprise terms CSR as
  relationship management involves
• a recognition of the relationships between an
  enterprise and others in society
• an awareness of context and trends, and a
  sensitivity to issues
• CSR is therefore measured through the ability of
  an enterprise to
• anticipate and contextualise its activities,
• develop effective and coherent systems to control
  risks and to spur innovation and change
• engage with stakeholders
• Through this an enterprise is responsive to these
  complex relationships and to the stakeholders
  that represent them

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Key stakeholders

• Shareholders, socially responsible
• investing, agencies, employees,
• suppliers, agents, competitors
• Customers
• Environmental interests and concerns
• Neighbours, societies, governments
• their departments, NGOs
• Media, Codes and CSR Institutions

Economic
Non-Economic
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Policy background

• European Commission Communication March 2006
• Establishing CSR as part of the European
  competitive landscape
• CSR seen as the business contribution to a more
  competitive, sustainable and cohesive social
  market economy
• CSR as the voluntary contribution of business
  enterprises to issues such as
• Integrated labour markets and social inclusion
• Skills development
• Improvements in public health
• Innovation performance
• More rational use of natural resources
• Better image of enterprise
• Respect for human rights, environmental
  protection and labour standards
• Reduction of poverty in developing countries in
  line with Millennium Goals
• (regional policy - EC cohesion)
• Implementing the Partnership for Growth and
  Jobs Making Europe a pole of excellence on CSR
  (COM(2006)136 final of 22.03.2006)

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Types of CSR issue from relocation

• Shareholders (competitiveness)
• Employees (job security, development, retraining
  out-placement retraining, inclusion)
• Customers (product provenance and tracking)
• Environmental interests and concerns (protection
  of global and local key resources and sinks)
• Neighbours (local value added and retained,
  minimum nuisance and protection of environmental
  assets, maintenance and improvement of social
  cohesion)
• Governments (inward investment, economic
  multipliers, cultural and environmental asset
  protection, development of local know-how)
• NGOs (labour and human rights, environment)

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But relocation has many CSR poles
Beyond EU Developing Economies
Within EU
Entry Policy for Developing Economies
Entry Policy
Location (To B)
EU
ex-EU
B
B
Exit Policy From EU plus Entry Policy for
Developing Economies
Exit Entry Policy
Relocation (From A to B)
EU
X
ex-EU
A
B
X
A
B
( This does not take account of market
expectations of CSR)
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Poles of issues

• Entry Policy EU
• Understand local CSR context in host and home
  country expectations of CSR activities in host
• Entry and Exit Policy EU
• Understand local CSR context in host, home
  country CSR expectations in host as well as home
  country CSR expectations on closure
• Entry Policy for Developing Economies
• Understand local CSR context, home country CSR
  expectations on operations in developing
  economies
• Exit from EU and Entry Policy for Developing
  Economies
• Understand local CSR context, home country CSR
  expectations on operation in developing economies
  as well as home country CSR expectations on
  closure

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Relocation confronts diversity in CSR globally,
regionally and nationally

• Regional blocks and countries have different
  views on the role of business in society
• Countries have different CSR policies and
  institutional support for CSR practices
• Countries have diverse CSR agendas
• Enterprises have different managerial
  understandings of CSR and CSR has many different
  positions in their strategies

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Emerging models of the role of enterprise in
society
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Developed developing world perspectives on
enterprise CSR
Some of the distinctions between developed
developing countries maybe found within the
enlarged EU
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Within Europe Mosaic of CSR Policies Agendas
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Conclusions

• Managing the CSR aspects of (re)location is an
  incredibly difficult process because of the many
  contexts, and local as well as global issues to
  address
• Relationship management is difficult to measure
• Engaging with stakeholders is not a core
  competence of most enterprises, especially not at
  pre-project assessment stage (even for companies
  like mining, oil gas which are familiar with
  following location)
• Yet, CSR issues will not go away and the
  possibility of managers to misunderstand context
  and CSR issues is more probable in new contexts
  that arise from relocation

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EndThank youNigel Roome nroome_at_ulb.ac.be