Many leading firms want to be a force for good, both at home and overseas. The anti-globalization movement, as well as the events of September 11, have given added cause for businesses to look closely at the impression they make in foreign markets. But few of them know how to adapt their social programs to different cultures and expectations.
A new study shows that companies that develop a well-engineered international community involvement strategy, and are open and transparent in communicating what they do, not only make a positive social impact, but can head off potential misunderstandings of their motives. The study, Benchmarks for International Corporate Community Involvement, was recently released by The Center for Corporate Citizenship at Boston College and the British firm, ProbusBNW Limited.
Corporate community involvement is an integral part of good business practice," said Steve Rochlin, director of research and policy development for The Center for Corporate Citizenship. "It generates better understanding of international markets while serving as a sort of ‘early warning’ system, alerting firms to potentially important social trends."
The study, the first ever to look at international community involvement strategies, covers the activities of more than a dozen US and European companies: Agilent Technologies, AstraZeneca, BP, BT (British Telecommunications), Capital One Financial Services, Diageo, Ford Motor Company, IBM, Johnson & Johnson (Europe), Levi Strauss Europe, Rio Tinto, SmithKline Beecham (now part of GlaxoSmithKline) and Whirlpool.
The Benchmark gave companies a detailed assessment of their performance. Among the participating companies, IBM emerged as a particularly strong leader in international corporate community involvement, with well-developed strategies, management processes and programs. Diageo was also rated highly, while other strong performers were SmithKline Beecham, Agilent Technologies, Rio Tinto, BP and Johnson & Johnson (Europe).
More and more of the people companies deal with–customers, investors, employees, governments, local communities, advocacy groups–expect them to be a positive social presence wherever they do business. Yet, businesses face a host of complex cultural and organizational issues when they try to bring about social improvement by becoming involved in communities overseas. The companies that participated in the study have overcome these challenges with a range of strategies.
GlaxoSmithKline, for instance, has built close working partnerships with international organizations to eliminate major world diseases; IBM works in close partnership with school systems worldwide, commissioning independent evaluations to track the impact and effectiveness of its education programs on student achievement; and BP has established a virtual business unit to drive its social investment activities across the globe.
"Western-style capitalism has left its mark on cultures worldwide, and as a result has seen its share of criticism and resentment. US and European businesses can contribute to positive social change by partnering with governments and NGOs wherever they do business," said Alastair Bruce, a director of ProbusBNW. "It is more important than ever that corporations demonstrate their value –and their values–to the rest of the world."
The Center for Corporate Citizenship at Boston College, part of the Carroll School of Management, provides Research, executive education, consultation and convenings on issues of corporate citizenship. The Center has more than 300 corporate members across the globe.
ProbusBNW Limited is a London-based consultancy specializing in corporate reputation management.