CSR in Development – Myth or Magic? 2010 An Overview

1. CSR in Development – Myth or Magic? 2010An Overview CSRD 13 September 2010

2. Introduction • Course Aims & Outline • Geographical & Industry Focus • Theoretical Perspectives • Exercise: CSR? Development? • CSR & Development: An Overview

3. Introduction • Associate Professor, CBDS & CSR, CBS • Ph.D. in Business Economics, CBS, 2004 • SMEs and CSR • Southern Africa • BDS network coordinator www.bdsnetwork.cbs • Research and Consultancy Work: • CSR in Uganda - 2008 • Impact of Codes of Conduct on the Working conditions in the clothing industry in Southern Africa 2008- • Changing Course: Responsible Supply Chain Management 2010 (with Global CSR)

4. Introduction • The student group • Study program affiliation • From CBS or other universities • Countries • Engagement in CSR in developing countries

5. Course Aims • Learning Aims • Understanding CSRD Concepts • Strengths and Weaknesses • Cultural and Social Contexts • Implications • Firm Profitability • Workers’ Conditions • Environmental Conditions

6. Course Outline • Structure • Overview: CSR in Development (anno 2010) • Cross-Cutting Themes • Impact Assessment • Participation • Current Topics • Codes of Conduct, Ethical Trade, GVCs, SMEs • Summary & Integration • Future Research, Policy & Practice Challenges

7. Course Outline • Exam • Knowledge of Entire Curriculum! • Written Exam: Paper (essay) – max. 10 pages. • Only One Type of Exam! • Abstract, Clear Line of Argument, Substantiated by Evidence, Sufficient Use of References, Solid Conclusions, Future Implications • Deadline: 30 November 2010

8. Course Outline • Teaching Methods • Practice to Theory! • Case Studies, Hands-on Exercises, Group Discussions, Video Clips, Guest Speakers • Geographical Focus • Developing World • Mostly Asia • Also (Southern) Africa and (if demand) Latin America

9. Theoretical Perspectives • Mainstream Business Perspective • Rhetoric: What can X, Y,Z CSRD topics do for companies, workers and the environment? • Critical Perspectives on CSRD • Underlying assumptions • What is (not) considered? • Who is included/excluded? • Actual vs. Postulated Impacts? • What Works Here vs. There?

10. Theoretical Perspectives • Impact Assessment • Postulated vs. Actual Effects of CSRD • Approaches: PPPs, Ethical/Fair Trade, CSR in Clusters • Issues: Homework, Child Labour, Working conditions • Participation • Mismatch • Who participates when, how, where & why? • Global Value Chain Mapping • From Northern Consumers to Southern Beneficiaries • Are Good Intentions Translated into Real Benefits?

11. Questions What is Corporate Social Responsibility? What is Development?

12. Why CSR Now? • Changing Global Context (Haufler 2006) • CSR Not New! • Deregulation, Privatization, Liberalization • Outsourcing, Concern About Globalization • Technological Developments, Media Reports • Corporate Accountability Movement • Rise of Private Authority • Self-Regulation, Co-Regulation • Multi-stakeholder Dialogues, Public-Private Partnerships • Industry Codes/Guidelines, Standard Setting Organizations, etc.

13. What is CSR? • ”CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. Stakeholders exist both within the firm and outside. The aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporate, for its stakeholders both within and outside the corporation” Hopkins 2006, p. 9

14. Or is CSR…. • Greenwash • The phenomenon of socially and environmentally destructive corporations attempting to preserve and expand their markets by posing as friends of the environment and leaders in the struggle against poverty. • Rebranding, forming front groups, lobbying governments, suing critics for lying, spying on the enemy etc

15. Or is CSR… • Bluewash • Corporations that wrap themselves in the blue flag of the United Nations in order to associate themselves with UN themes of human rights, labor rights and environmental protection. Bluewash is typically associated with ”corporate humanitarians" trying to weaken UN agreements, in favor of voluntary, toothless codes of conduct regarding social and environmental issues.

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

17. Why Engage in CSR? • Business Case for CSR (Hopkins 2006) • It Pays Off Financially To Be Responsible • Company Reputation • Access to Finance • Employee Motivation • Innovation • License to Operate • Preferred Consumer Choice • Avoiding Race to the Bottom etc.

18. CSRD: Is It Magic? • CSRD Supporters (Hopkins 2006) • UN, World Bank, IMF, WTO Have Failed • Corporations More Powerful • The Solution? • A Useful Tool for Economic Development • ”CSR Provides A Platform For Corporations to Be Involved in Economic Development in Ways That Can Be Much More Powerful than hitherto thought of”

19. CSRD: Is It Magic? • CSR = Avoiding ’Race to the Bottom’ • That is, locating production in Site with Lowest Common Denominator In Terms of • Wages, worker conditions, shoddy products, disrespect for human rights, outrageous demands on environment etc. • CSR Has Positive Potential • Adequate wages, better environment, etc. • Better governance -> reduced transaction costs • Human rights policies -> Worker dignity, higher productivity • Consumer boycott of irresponsible companies

20. CSRD: Is It Myth? • CSRD Sceptics (Frynas 2008) • Lack of Empirical Evidence • Micro-case Studies • ”CSR May Work For Some People, in Some Places, on Some Issues, Some of the Time” • Analytical Limitations • Only Focus on Positive Impacts • Narrow Research Focus • CSR: Improve Profits and Stakeholder Management • CSR: Overlooks Beneficiary Participation

21. CSRD: Is It Myth? • CSRD Sceptics (Frynas 2008) • Business Case for CSR • ”It Makes Financial Sense to Engage in CSR” • What About Instances When CSR Not Profitable? • Unresolved Governance Questions • Corporate Governance • Short-Term Shareholders, Long-Term Dev. Impacts • Societal Governance • CSR: Micro-Impacts vs. Macro-Impacts

22. What Is Development? • Development Confusion? • Hopkins (2006) • Maximizing Economic Growth, Addressing Population Growth, Urbanization, Health, Education, Basic Needs, Governance, Corruption etc. • Frynas (2009) • Income Distribution, Value Creation, Poverty etc. • SJ Critique • CSRD Supporters/Sceptics Do Not Define CSR and Development Concepts Clearly

23. What is Development? • How To Relate CSR & D? • What Part of CSR? Relates to • What Kind of Development? • 4 Types of Partnerships (Reed and Reed 2009) • Conventional Business • Corporate Social Responsibility • Corporate Accountability • Social Economy

24. CSR and Development • Four Types of Development (Reed and Reed 2009) • The Neo-liberal Approach • The Capabilities Approach • The Human Face Approach • The Social Power Approach

25. CSR and Development

26. Next Session (Week 38) • CSR Impact Assessment • Hamann 2007: What We Know • Witte & Reicke 2005 • UN PPPs: Why Impact Assessment Is Important • Utting & Zammit 2009 • Impact Assessment: Seeing the Bigger Picture • Lund-Thomsen 2009 • Politics of Impact Assessment • Case of Kasur Tanneries