Myths About CSR in Developing Countries

Myths About CSR in Developing Countries

Blog by Wayne Visser

Part 10 of 13 in the Age of Responsibility Blog Series for CSRwire.

Are conceptions and models of CSR developed in the West appropriate for developing countries? I first tackled this question by setting out what I believe to be 7 popular myths about CSR in developing countries. Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. The myths are also sustained, however, by whole legions of largely well-intentioned people who have vested interests in promoting their particular brand of the truth about CSR.

  1. Economic growth is not compatible with CSR
  2. Multinationals are the biggest CSR sinners
  3. Multinationals are the biggest CSR saviours
  4. Developing countries are anti-multinational
  5. Developed countries lead on CSR
  6. Codes can ensure CSR in developing countries
  7. CSR is the same the world over

Let’s look at these myths each briefly in turn.

Myth 1 – Economic growth is not compatible with CSR.

What the Index for Sustainable Economic Welfare and Genuine Progress Index show is that GDP growth and quality of life move in parallel until social and environmental costs begin to outweigh economic benefits. According to this ‘threshold hypothesis’ (coined by Chilean barefoot economist, Manfred Max-Neef), most developing countries have yet to reach this divergence threshold. For them, economic growth and the expansion of business activities is still one of the most effective ways to achieve improved social development, while environmental impacts are increasingly being tackled through leapfrog clean technologies.

Myth 2 – Multinationals are the biggest CSR sinners.

On the ground in most countries, multinationals are generally powerful forces for good, through their investment in local economies, creation of jobs, upgrading of infrastructure, provision of basic services and involvement in community development and environmental conservation. There are always exceptions, of course, and these should be named and shamed. But they shouldn’t overshadow the overall positive role of big companies in developing countries. The cumulative social and environmental impacts of smaller companies, which operate below the radar of the media and out of reach of the arm of the law, are typically far larger than that of the high profile multinationals.

Myth 3 – Multinationals are the biggest CSR saviours.

Not only do large companies have limited influence over government policy, but most multinationals, despite large capital investments, provide only a minuscule proportion of the total employment in developing countries. The real potential saviours are small, medium and micro enterprises (SMMEs), including social enterprises, which are labour intensive and better placed to effect local economic development. If the social and environmental impacts of these SMMEs can be improved, the knock on benefits will be proportionally much greater than anything that multinationals could achieve on their own. This is why the work CSR for SMEs by Anuhuac University in Mexico and Forum Empresa in Latin America is so encouraging and important …

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Related websites

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[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-age-of-responsibility”]Link[/button] The Age of Responsibility (book)

Cite this blog

Visser, W. (2011) Myths About CSR in Developing Countries, Wayne Visser Blog Briefing, 8 December 2011.

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CSR Myths

CSR Myths:

Popular Misconceptions on Corporate Sustainability and Responsibility

Article by Wayne Visser

In an article published by Ethical Corporation, I set out to explode 7 myths about corporate sustainability and responsibility (CSR). Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. The myths are also sustained, however, by whole legions of largely well-intentioned people who have vested interests in promoting their particular brand of the truth about CSR. The 7 myths are:

  1. Economic growth is not compatible with CSR
  2. Multinationals are the biggest CSR sinners
  3. Multinationals are the biggest CSR saviours
  4. Developing countries are anti-multinational
  5. CSR is the same the world over
  6. Developed countries lead on CSR
  7. Codes can ensure CSR …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2012/04/inspiration_csr_myths_wvisser.pdf”]Pdf[/button] CSR Myths (article)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.waynevisser.com/books/business-frontiers”]Page[/button] Business Frontiers (book)

Cite this article

Visser, W. (2008) CSR Drivers: The Forces Shaping Corporate Sustainability and Responsibility, CSR International Inspiration Series, No. 3.

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CSR in Developing Countries

Corporate Social Responsibility in Developing Countries

Chapter by Wayne Visser

Extract from The Oxford Handbook of Corporate Social Responsibility

The challenge for corporate social responsibility (CSR) in developing countries is framed by a vision that was distilled in 2000 into the Millennium Development Goals—‘a world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment’ (UN, 2006: 3). Unfortunately, these global aspirations remain far from being met in many developing countries today. The question addressed by this chapter, therefore, is: What is the role of business in tackling the critical issues of human development and environmental sustainability in developing countries?

To begin with, it is worth clarifying my use of the terms developing countries and CSR. There is an extensive historical and generally highly critical debate in the development literature about the classification of countries as developed and less developed or developing. Without reviving that debate here, suffice to say that I use developing countries because it is still a popular term used to collectively describe nations that have relatively lower per capita incomes and are relatively less industrialized.

This is consistent with the United Nations Developments Program’s (2006) categorization in its summary statistics on human development and is best represented by theWorld Bank’s classification of lower and middle income countries. It should be noted, however, that the UNDP’s classification of high, medium and low development countries produces a slightly different picture than the World Bank’s list of which countries are developed and developing.

CSR is an equally contested concept (Moon, 2002b). However, for the purposes of this chapter, I use CSR in developing countries to represent ‘the formal and informal ways in which business makes a contribution to improving the governance, social, ethical, labour and environmental conditions of the developing countries in which they operate, while remaining sensitive to prevailing religious, historical and cultural contexts’ (Visser et al., 2007).

The rationale for focusing on CSR in developing countries as distinct from CSR in the developed world is fourfold:

  1. developing countries represent the most rapidly expanding economies, and hence the most lucrative growth markets for business (IMF, 2006);
  2. developing countries are where the social and environmental crises are usually most acutely felt in the world (WRI, 2005; UNDP, 2006);
  3. developing countries are where globalization, economic growth, investment, and business activity are likely to have the most dramatic social and environmental impacts (both positive and negative) (World Bank, 2006); and
  4. developing countries present a distinctive set of CSR agenda challenges which are collectively quite different to those faced in the developed world.

The latter claim is explored further in the sections which follow and is summarized at the end of the chapter. The chapter begins by proposing different ways to categorize the literature on CSR in developing countries. It then reviews the research which has been conducted at a global and regional level, before considering the main CSR drivers in developing countries. Finally, a model of CSR in developing countries is proposed, before concluding with a summary and recommendations for future research …

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Related pages

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.waynevisser.com/books/corporate-citizenship-in-africa”]Page[/button] Corporate Citizenship in Africa (book)

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.waynevisser.com/books/the-world-guide-to-csr”]Page[/button] The World Guide to CSR (book)

Cite this chapter

Visser, W. (2008) Corporate Social Responsibility in Developing Countries, In A. Crane, A. McWilliams, D. Matten, J. Moon & D. Siegel (eds.), The Oxford Handbook of Corporate Social Responsibility, Oxford: Oxford University Press, 473-479.

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Developing Countries

Developing Countries

Chapter by Wayne Visser

Extract from The A to Z of Corporate Social Responsibility

CSR in developing countries incorporates the formal and informal ways in which business makes a contribution to improving the governance, social, ethical, labour and environmental conditions of the developing countries in which they operate, while remaining sensitive to prevailing religious, historical and cultural contexts.

The category of ‘developing countries’ is used broadly to include countries that have relatively lower per capita incomes and are less industrialised. For a listing of countries that might fall into this grouping, see the World Bank’s classification of lower and middle income countries.

Far from being a unified field, debate on CSR in developing countries is extremely diverse, ranging from optimistic views about the role of business in society to highly critical perspectives. However, there seems to be an emerging consensus that developing countries provide a socio-economic and cultural context for CSR which is, in many ways, different from developed countries.

In particular, CSR in developing countries has the following distinctive characteristics:

  • CSR tends to be less formalised or institutionalised in terms of the CSR benchmarks commonly used in developed countries, i.e. CSR codes, standards, management systems and reports.
  • Where formal CSR is practised, this is usually by large, high profile national and multinational companies, especially those with recognised international brands or those aspiring to global status.
  • Formal CSR codes, standards and guidelines that are most applicable to developing countries tend to be issue specific (e.g. fair trade, supply chain, HIV/AIDS) or sector led (e.g. agriculture, textiles, mining).
  • In developing countries, CSR is most commonly associated with philanthropy or charity, i.e. through corporate social investment in education, health, sports development, the environment and other community services.
  • Making an economic contribution is often seen as the most important and effective way for business to make a social impact, i.e. through investment, job creation, taxes, and technology transfer.
  • Business often finds itself engaged in the provision of social services that would be seen as government’s responsibility in developed countries, e.g. investment in infrastructure, schools, hospitals and housing.
  • The issues being prioritised under the CSR banner are often different in developing countries, e.g. tackling HIV/AIDS, improving working conditions, provision of basic services, supply chain integrity and poverty alleviation.
  • Many of the CSR issues in developing countries present themselves as dilemmas or trade-offs, e.g. development versus environment, job creation versus higher labour standards, strategic philanthropy versus political governance.
  • The spirit and practice of CSR is often strongly resonant with traditional communitarian →values and religious concepts in developing countries, e.g. African humanism (ubuntu) in South Africa, coexistence (kyosei) in Japan and harmonious society (xiaokang) in China.

The drivers for CSR in developing countries include …

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[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.waynevisser.com/books/the-a-to-z-of-corporate-social-responsibility”]Page[/button] The A to Z of Corporate Social Responsibility (book)

Cite this chapter

Visser, W. (2007) Developing Countries, In W. Visser, D. Matten, M. Pohl & N. Tolhurst (eds.), The A to Z of Corporate Social Responsibility, London: Wiley, 154-157.

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Corporate Responsibility in a Developing Country Context

Corporate Responsibility in a Developing Country Context

Article by Wayne Visser

In this article, I want to explode a few myths about corporate responsibility in developing countries. Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. The myths are also sustained, however, by whole legions of largely well-intentioned people in developed countries who have vested interests in promoting their particular brand of the truth about corporate responsibility.

Myth 1: Economic growth is not good

Over the past decade or more, there has been a growing backlash against the economic expansionist agenda of many developed countries and multinational corporations. And rightly so: Blind pursuit of GDP growth or market growth often fails to take into account many of its negative social and environmental impacts, as alternative indicators of progress, like the United Nations Human Development Index, the Index for Sustainable Economic Welfare (ISEW) and the Environmental Sustainability Index, have all amply demonstrated.

But it is a mistake to transpose this “growth is not good” argument into a developing country context. What the ISEW showed, in fact, was that GDP growth and quality of life in developed countries like the USA and UK moved in parallel until around 1970, when they began to diverge, with quality of life declining despite continued economic growth. Most developing countries have yet to reach that point of divergence. Economic growth and the expansion of business activities is still one of the most effective ways to achieve improved social development and environmental sustainability.

Myth 2: Multinationals are the biggest sinners

In today’s fishbowl world, when multinationals step out of line, they get slammed in the worldwide media. Typically, their reputations suffer collateral damage and they find themselves being targeted by consumer boycotts and liability suits. This is both appropriate and necessary as a counterbalancing force in today’s supra-territorial society, given the overwhelming size and power of global corporations and the still relatively poor institutional frameworks of regulation and governance to ensure proper accountability.

But on balance, these sensational cases are the exception, rather than the rule. On the ground in developing countries, multinationals are generally powerful forces for good, through their investment in local economies, creation of jobs, upgrading of infrastructure, provision of basic services and involvement in community development and environmental conservation. The cumulative social and environmental impacts of smaller companies, which operate below the radar of the media and out of reach of the arm of the law, are typically far larger than that of the high profile multinationals.

Myth 3: Multinationals are the biggest saviours

While multinationals are typically not the worst offenders in developing countries, neither do they have as much influence over national development as many critics seem to assume. Development is a complex phenomenon, which fifty years of multilateral frustration has proved beyond question. Adequate systems of governance and economic stability are probably two of the most critical enablers, a fact that countries in Africa have finally realised with the launch of the African Union and  …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2012/07/article_myths_devcos_wvisser.pdf”]Pdf[/button] Corporate Responsibility in a Developing Country Context (article)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.waynevisser.com/books/the-world-guide-to-csr”]Page[/button] The World Guide to CSR (book)

Cite this article

Visser, W. (2003) Corporate Responsibility in a Developing Country Context. Ethical Corporation, Issue 20, August.

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