Globalization may have created problems from trade imbalances to financial contagions but it has also ushered in important trends such as the practice of corporate social responsibility.

HO CHI MINH CITY—Alongside the march of globalization is the swelling grudge of people who are being affected by this sweeping trend have against private businesses, which they blame for exacerbating their plight.  “First, a company is a predator to be shot. It can also be a cow that could be milked,” said Soren Petersen, head of networks and partnerships of UN Global Compact, as he gave examples of how some people view private enterprise during a plenary session on “What are the Challenges and Opportunities for Partnerships between Companies and the UN” at the recently concluded Asian CSR Forum held in Ho Chi Minh City, Vietnam.

“On a positive note, it [a company] is a strong horse that pulls the whole cart,” Petersen added.

From the collapse of communism in Eastern Europe to the antifree-trade protests in gatherings such as the World Trade Organization meeting in Seattle and the UNCTAD X in Bangkok, globalization has produced numerous significants trends as a result of the new world order—both positive and not so.

Among the more encouraging developments from globalization, according to Asian Institute of Management (AIM) professor Felipe B. Alfonso, is the increasing popularity of corporate social responsibility.

“Corporate social responsibility (CSR) is one of the dynamics of globalization. Many global problems need attention and governments cannot solve it alone,” said Alfonso, vice chairman of the AIM board of trustees and executive director of the Ramon V Del Rosario Sr. Center for Corporate Responsibility. “This is quite true in developing countries where they do not have enough resources to solve their problems.”

And this trend is one dynamic trend. CSR has gone from basic corporate philanthropy of issuing a check for donation to other forms of helping the marginalized sectors of society.

However, the essence remains the same: To give back to society the benefits they got from doing business with the people.

Furthermore, the current implementation of CSR in many parts of the world has been inspired by the Confucian philosophy of teaching the man to fish rather than giving him so he will not get hungry in his lifetime. “Training to develop their capacities is more self-sustaining,” explained Alfonso.

In other words, businesses are looking for ways to do good on a sustainable basis while addressing the needs of both society and their shareholders. CSR must be efficient to achieve a win-win situation for these two publics.

Dr. Ralph Sorenson, president emeritus of Boston College and cofounder of AIM, assures cynics that CSR is not just marketing or a philanthropic ploy.

“CSR is not part of the product and services, terms and profitability, but a way of life that will include all facets of its operations,” he stressed.

The Figaro Coffee Co. led by its chief executive Pacita Juan is a perfect example of the good teamwork between shareholders and the people they want to help. Under the Figaro scheme, farmers plant coffee on their lands with some guidance from the company, which later buys their produce to use for its café business.

Sorenson said the private sector is now changing its attitude of doing business with the public. He noted that companies used to consider cheap labor or a rigid labor environment as the main attractions to do business with a certain country. “This has now changed and countries will not think twice in pulling out their business if they learn that country is using child labor or polluting the environment,” he said.

Global Compact

AT the forefront of this campaign is the United Nations, which has organized the Global Compact in 2000 to promote sustainable and responsible business practices by bringing together companies, UN agencies, labor organizations and civil-society groups.

The Global Compact is focused on the implementation of 10 internationally agreed principles in the areas of labor standards, environmental protection, human rights and anticorruption measures. Although it is not a regulatory instrument, the UN hopes to promote voluntary efforts to uphold the principles and encourage articulating on their progress and share their best practices.

Sorenson says companies that join the Global Compact and apply its principles as part of their operations can gain long-term value for their businesses as this leads to the creation of a “stable and inclusive market and a secure society where business works at its best.”

In return, companies can have access to a healthy and productive workforce, prosperous consumers and investors and the existence of nondiscriminatory trading and financial systems.

Sorenson adds that practicing corporate citizenship also mitigates challenges such as environmental degradation, disease, conflict, inequality and inadequate health and education systems, which can lead to increasing costs in raw materials, personnel, security and insurance.

Micro, not macro

For Mark Fuller, chairman and CEO of the Monitor Group, economists should in particular pay attention to the microeconomics sector, since he believes that global competitiveness is deeply rooted in local communities and networks that are appropriately supported by the national government.

“Competitiveness is micro, not macro. Bangalore, not India, is the outsourcing giant in the global world. Companies compete; countries do not. Regions or countries can be the front but without companies, countries cannot take charge,” Fuller pointed out.

Fuller also stressed that innovation does not only involve science but must include the “trinity” of competitiveness: Specialized human assets, promoting of innovators and stimulating entrepreneurs.

“I believe an enterprise will only be competitive if they’re not only serving their purpose of generating profit alone. The positioning of a company for the shareholders and stakeholders is a symbiotic relationship,” he said.

Figaro’s Juan certainly takes this to heart. For her, CSR means bringing people together and making it a profitable venture in the long term. “But the bigger profit is you make a difference in the people’s lives,” she said.

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