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Notions of Corporate Responsibility and their Cultural Contexts:  Case Studies from Russia and the United States

 

May 11, 2012

 

Andrea Mazzarino, Fellow, Ruth Landes Memorial Fund (Адрес электронной почты защищен от спам-ботов. Для просмотра адреса в вашем браузере должен быть включен Javascript.)

Natalia Sarakhanova, Docent, Kandidat Ekonomicheskikh Nauk (Адрес электронной почты защищен от спам-ботов. Для просмотра адреса в вашем браузере должен быть включен Javascript.)

 

            During the past 10 years, Corporate Social Responsibility (CSR) as a set of ideas about business, its social roles, and obligations, has gained currency in economies throughout the world.  However, companies realize the concept in distinctive ways that reflect particular social, cultural, and economic contexts.  Based on ethnographic case studies in different geographical settings, an analysis of publications from Russian and American corporations, and open-ended interviews with CSR representatives from these corporations, this paper analyzes CSR from a cross-cultural perspective.  We note some key consequences to the fact that corporations are growing increasingly active in the 21st century in issues such as healthcare, education, infrastructure, and other forms of social welfare for workers and the communities in which they operate.  Contemporary corporations accumulate such vast quantities of financial and organizational resources that they are able to regulate social processes on a larger scale, most critically in setting the terms in which welfare is discussed more widely:  what counts as an important social problem, who are worthy recipients of aid, and the extent to which business itself should be a central provider of social welfare.  CSR is thus a predominant discourse and set of practices surrounding social welfare, although its influence is expressed in different ways and through different rationales.  In advancing this argument, we examine four different aspects of CSR:  the development and dissemination of global standards for CSR; a comparison of models for CSR based on academic literature, a comparison of societal understandings of CSR, and an analysis of particular case studies of CSR programs in Russia and the United States. 

            Our research is based primarily on a comparison of CSR programs within sixteen companies:  eight companies each in Russia and the United States.  We chose companies that were primarily nationally based; the majority of their investors and the consumers of their products and services were domestic.  We assumed that companies form their CSR programs with an eye to the markets in which they operate, striving to convey a positive social image within those markets.  Investors and consumers, moreover, are in and of the cultures in which they live.  Therefore, they on the one hand reflect the cultural context that interests us and on the other, have in certain ways felt the varied effects of business in their society and have their own expectations of business in terms of accountability and responsibility.  This assumption of course does not take into account the ways in which companies are perceived by workers and those who cannot afford their products and services; much more original research needs to be conducted on these questions.  In order to cover a wide cross-section of business sectors, we selected companies in telecommunication, oil drilling and processing, Internet search engines, banking, transport, and food production.  All of the firms we identified for analysis are large corporations, because medium-sized and small businesses do not always undertake programs of CSR of the same scale or nature of larger corporations.  In analyzing the documents from these corporations and in several cases, ethnographic interviews we were able to carry out with their CSR representatives, we considered a number of questions:  the ostensible targets of CSR programs (i.e. whether they aimed to serve employees, or other interested parties); the extent to which businesses referred to the needs or demands of consumers and investors or the government as their main bases for program development; the extent to which CSR programs reflect cultural and social characteristics of the countries in which they operate; and how we might interpret similarities and differences in CSR programs among different countries.  Based on these questions, we were able to make some observations about the possibilities and drawbacks of CSR as a form of social welfare system.

            We have examined the proposition that national models or standards of CSR can be compared using culturalogical parameters that have been set out by G. Hofstede (2010) and others.  Culturalogical parameters are broad enough to be applied to describing and comparing organizational settings, including everyday practices, decision-making processes, and the management of conflicts in corporate cultures.  As a basis for our comparison, we have applied the following parameters:  the avoidance of uncertainty (G. Hofstede), a spectrum between individualism and collectivism, and distance from power (G. Hofstede).  Thinking about a desire to avoid uncertainty has offered a way to understand why companies in Russia might carry out social projects to defend more economically and politically vulnerable populations, such as veterans and the disabled.  Individualism/collectivism refers to the degree to which people in a society imagine themselves in terms of separate individuals or a larger collective body.  We have found that companies in the United States tend to support projects that aid particular individuals (i.e. recipients of scholarships) and volunteering initiatives that ostensibly “empower” those who take part.  In Russia, corporations tend to support projects that immediately affect a larger group of people—projects such as community sports facilities, for example.  The parameter of “distance from power” reflects the extent to which people in a society tolerate hierarchies.  We have observed that in the United States, there exists a more clearly articulated and institutionalized organizational infrastructure for making demands of business, and we have also observed an absence of cultural fatalism towards business—that is, cultural expectations that corporations behave in a certain way in society and that their consequences, such as environmental pollution or fluctuating pay, are inevitable.  That said, social expectations of business in the United States are notably lower.  In Russia, we frequently hear it expressed that a person wields little influence over a corporation and its practices, so attempting to change CSR programs is futile.

Of course, context matters.  The question of how to compare CSR programs in Russia and the United States, in particular, was a challenging one given the two very different histories of private enterprise in these countries.  The comparative models that we selected for our comparison did not take into account the complexity of these different historical trajectories.  Yet these trajectories tell us much about the form that CSR has taken in each country.  Private enterprises have existed in Russia for little more than two decades.  In the 2000s, increasingly numerous and complicated tax laws and regulations, as well as politicians’ involvement in and subsidies for larger corporations, have left enterprises of all sizes more beholden and vulnerable to state intervention.  It remains in corporations’ best interests to devote funds and resources to social programs such as sports teams, educational facilities, and healthy living programs when these initiatives coincide with the priorities of local administrators.  Perhaps as well, the substantially greater attention given by Russian corporations to social programs reflects the enduring position of workplaces as both extensions of the government and as providers of social welfare.  The United States has always operated with a capitalist system with firms enjoying relatively greater independence from government regulation and taxes, depending on the administration in place at any given time.  Corporate models of social responsibility in the United States have largely focused on the production process and safety for workers rather than substantial amounts of corporate funding going to social services such as healthcare—whether in communities or in the workplace itself.   A more informed perspective would note the political, economic, and cultural specificities of corporations and meanings of work in each context, and analyze how these specificities are intimately related to the shape that CSR takes.

            Nevertheless, CSR programs in Russia and the United States, demonstrate a number of cross-cultural similarities in purpose and content.  Most critical among these similarities is a focus on strengthening human bodies and changing individual habits as opposed to intervening in social welfare systems and structures of inequality.  We have noted a common vested interest in technology and mathematics education for high school and elementary school students.  Other cross-cultural priorities include sports programs for young people and “healthy living” (zdoroviy obraz zhizni)advertising campaigns against smoking and drug use.  We suggest that these similarities have to do with an awareness of real problems that are, in fact, global in nature, as well as a transnational culture of CSR in which big businesses have begun to pay attention to similar norms.  These commonalities are in large part driven by the development of a set of global standards for CSR.  Dinah Rajak (2011) notes, for example, the development by the International Standardization Organization (ISO) and the UN Global Compact in 2004 of a checklist of requirements that companies need to meet in order to be deemed in compliance.  Rajak adds that rather than necessarily standardizing corporate ethical practices, this list has allowed companies to superficially meet particular standards while circumventing what might be most important within a particular context.  For example, she cites the mining company Anglo American’s provision of housing for workers even though they did not allow workers’ families to stay with them; Anglo workers still had to return home periodically, often traveling long distances, in order to be with their families (146).  The globalization of CSR norms does not necessarily mean the development of a system of ethics.  Moreover, it might be more apt to say that corporate concerns with efficacy have globalized, such that in this technocratic age companies have a more vested interest in educating local populations as future workers.  Both the Russian company Merk’s and the American company Exxon Mobil’s concern with math and science education for local young people is in part an admittedly self-interested attempt to create a local source of future workers for their companies.  The bottom line is that globalization of CSR has to do with profits more than it does with a transnational system of ethics.

These similarities nevertheless do not mean that such programs are influenced by global trends only.  Even they are inflected differently according to political and economic context.  The ways in which CSR programs are framed in company charters and their actual implementation are heavily influenced by local cultural norms and the material and human resources available in each setting.  For example, Russian corporations such as Merk refer to their attempts to support the government in its prioritization of education for children, reflecting the larger point that Russian corporations’ CSR programs are more closely aligned with what local and federal governments endorse.  American programs more openly stress the need for future workers in local areas along with their concern with helping individuals to succeed in school and the workforce.  This in turn illuminates an enduring cultural preoccupation in the United States with individual empowerment and corporate efficacy as flip sides of the same coin.

Scholars of corporate social responsibility (CSR) understand the question of whom CSR serves from a variety of perspectives, with some viewing social welfare and corporate profitability as intimately intertwined, and others framing CSR as simply a company's strategy to improve its image and avoid liability.  Scholars in the Russian academy tend to view corporate-sponsored social services for workers and the surrounding community and a company's profitability, as part of the same interconnected package:  corporate-sponsored education, healthcare, and athletics are beneficial to the general population and provide a ready workforce and consumer base for businesses.  For example, Golovnev (2004) lists a range of philanthropic projects and worker benefits among Russian corporations, such as community soccer programs sponsored by Yukos, Norilsk Nickel's private pension fund for its employees, and Merk's computer courses for local students and prospective future employees.  Golovnev emphasizes CSR programs that are costly but hold benefits for both corporations and the cities in which they are located.  He suggests that these corporations' motive to improve their image is dubious given that many programs are in fact not widely publicized so that corporations can avoid tax penalties.  Belaevoi (2008) defines social responsibility as “a firm's obligation to follow long-term, socially beneficial goals…” thereby positing CSR unproblematically as beneficial not only for a firm, but for society, as well.  In a similar vein, Bataeva (2010) understands CSR as the “interaction between [state] power, business, and society, in solving problems related to socio-economic development.”  Together, these scholars suggest that CSR and a social safety net are flip sides of the same coin.

Other works, mainly by scholars in the United States, understand CSR in a more cynical light, stressing the self-serving attempts of companies to avoid liability for accidents and workers' injuries while minimizing their financial and social obligations to surrounding communities.  In his survey of American corporations and professional organizations, Bosh (2008) argues that CSR serves as a way for companies to distinguish themselves from their competition to consumers and avoid liability for accidents.  Shever (2010) demonstrates in her ethnography of Shell's CSR program in Argentina how executives use photographs of young women company representatives assisting their poorer counterparts in the community in order to depict the corporation as a concerned citizen, and not as the large corporation with drastically asymmetrical ties of support to the community that it is.  These critiques of CSR programs paint a picture of corporate workplaces as separate from the communities in which they operate and their interests entirely distinct and disconnected from them. 

Perhaps a more complex understanding of CSR comes from Rajak in her ethnography of the Anglo American Corporation in South Africa.  Corporate Social Responsibility, Rajak argues, is «…a powerful framework through which transnational corporations gain access to new kinds of social and moral resources in pursuit of their economic goals (2011, 18)»  Rajak emphasizes CSR not as a coherent system of programs, but as various initiatives legitimized by a globally circulating set of discourses propagated by organizations such as the United Nations and transnational corporations themselves.  These discourses present business as part of a new system of social support, replacing services that governments used to fulfill.  From Rajak's perspective, the important point is that through CSR, transnational corporations are coming to be seen as solutions to global problems that they are responsible for causing:  problems such as job instability, poverty, and local social inequalities.  Mühle (2011), in support of this view, points to the increasing embeddedness of global corporations in social welfare systems, and the declining role of the government; rather than separately evaluating the content of specific CSR programs, both Muhle and Rajak call our attention to a growing global awareness of business as a guarantor of social services and welfare and highlight the need to question the social implications of this 21st-century shift.  Building on this insight, our research has shown that CSR programs, despite the fact that they use similar language and demonstrate similar initiatives, are not as homogenous as they may seem.  We suggest the need for new models for analyzing and comparing CSR programs that examine the political, economic, and historical context of each country.

 

 

References

 

Bataeva, Bella Saidovna.  2010.  Strategicheskie Prioritety Sotsial’no-Ekonomicheskovo Pazvitia Rossii i Kontsepsia Corporativnoi Sotsial’noi Otvetstvennosti.  Dissertation.  ФГОБУВПО «Финансовый университет при ПравительствеРоссийской Федерации».  Moscow. 

 

T. Bosh. 2008.  Sotsial’naia Otvetstvennost’ Bisnesa i Pribyl Predpriatiia.  Proekt Initsiativa za Sotsial’nuiu Otvetstvennost’ Bisnesa. 

 

Mühle, Ursula.  2011.  The Politics of Corporate Social Responsibility:  The Rise of a Global Business Norm.  Frankfurt, New York:  Campus Verlag.

 

Rajak, Dinah.  2011.  In Good Company:  An Anatomy of Corporate Social Responsibility.  Palo Alto:  Stanford University Press.

 

Shever, Elana.  2010.  Engending the Company:  Corporate Personhood and the 'Face' of an Oil Company in Metropolitan Buenos Aires.  POLAR 33(1):26-46.

 

Geert Hofstede, Gert Jan Hofstede, Michael Minkov, Cultures and Organizations: Software of the Mind. 3rd Edition, McGraw-Hill USA, 2010

 

Башарина Е.Н. Влияние государственного регулирование на развитие института КСО. Государственное управление. Электронный вестник. Выпуск №14, март 2008г.

 

Беляева И.Ю. Корпоративная социальная ответственность. Управленческий аспект Издательство КноРус, 2008

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