Implementing global corporate citizenship: An integrated business framework

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Implementing global corporate citizenship:An integrated business framework

Victoria L. Crittenden a,*, William F. Crittenden b, Christopher C. Pinney c,Leyland F. Pitt d

aCarroll School of Management, Boston College, Chestnut Hill, MA 02467, U.S.A.bCollege of Business Administration, Northeastern University, Boston, MA 02115, U.S.A.cAspen Institute, Business & Society Program, New York, NY 10016, U.S.A.d Segal Graduate School of Business, Simon Fraser University, Vancouver, BC V6C 1W6, Canada

Business Horizons (2011) xxx, xxx—xxx

www.elsevier.com/locate/bushor

KEYWORDSGlobal corporatecitizenship;Operatingenvironment;Management domains;Stakeholders;Social reporting

Abstract Recent economic, social-political, and natural disasters have all served tohighlight the fragility of the global marketplace. As such, it is no longer questioned asto whether or not companies should be good corporate citizens; that is a given.Rather, concern in the 21st century centers on how businesses can become betterglobal corporate citizens. Unfortunately, without clear guidance regarding how thismay be accomplished, global corporate citizenship will remain a fringe activity andnot become a critical component of an organization’s core business strategy. Theintegrated framework presented herein identifies key elements and tips for imple-menting a business-based approach to global corporate citizenship.# 2011 Kelley School of Business, Indiana University. All rights reserved.

1. Good corporate citizenship

Not everyone is called to be a physician, alawyer, a philosopher, to live in the publiceye, nor has everyone outstanding gifts of nat-ural capacity, but all of us are created for thelife of social duty, all are responsible for thepersonal influence that goes forth from us.�Vittorino da Feltre (1373-1446)

* Corresponding author.E-mail addresses: [email protected] (V.L. Crittenden),

[email protected] (W.F. Crittenden),[email protected] (C.C. Pinney), [email protected](L.F. Pitt).

0007-6813/$ — see front matter # 2011 Kelley School of Business, Idoi:10.1016/j.bushor.2011.04.006

The fragility of the global marketplace has beenevidenced numerous times over the past few years.Our world has experienced natural disasters suchas the devastating Indian Ocean tsunami, whichkilled almost 300,000 people; Hurricane Katrina,which tore New Orleans, Louisiana, to shreds; theKashmir earthquake, which claimed 75,000 livesand left 2.5 million homeless; and, most recently,the Japan earthquake and tsunami, which thus farhas resulted in over 25,000 dead and missing. Therehave also been political disasters–—war in Iraq,strife in Africa and the Middle East–—and economiccatastrophes, such as the global financial meltdownof 2008-2009. In this environment, responsiblecompanies–—particularly large ones with an interna-

ndiana University. All rights reserved.

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tional presence–—cannot just sit on the sidelines(Lehrer & Delaunay, 2009).

According to the World Economic Forum (2010),the license to operate in a global market requiresorganizational engagement in society. As notedby Klaus Schwab (2008), Executive Chair of theWorld Economic Forum, global corporate citizen-ship refers to a company’s role in addressingany issue that has an impact on the future ofthe globe (e.g., climate change, infectious dis-eases, terrorism). Worldwide, companies are beingheld responsible for issues such as (Center forCorporate Citizenship, 2008b; Economist Intelli-gence Unit, 2008; Environmental Leader, 2009;GlobeScan, 2007):

� Not harming the environment;

� Treating employees fairly;

� Ensuring responsible supply chain management;

� Reducing climate change impact;

� Improving education/skills in surrounding com-munities;

� Listening/responding to public concerns;

� Increasing global economic stability;

� Helping reduce the rich-poor gap;

� Reducing human rights abuses;

� Supporting charities/community projects;

� Solving social problems; and

� Supporting progressive government policies.

Thus, the critical question is no longer whethercompanies should be good corporate citizens; thatwas answered long ago. Rather, the key questionnow is: How can companies understand and inte-grate global corporate citizenship into the core

Figure 1. An implementable framework for global corpor

Comprehend the

Operating Environment

Understand the Key Domains for Management

management practices of business? Our purposehere is to provide a corporate citizenship businessframework for organizations worldwide to use inattempting to answer the ‘how’ question. We beginby developing an understanding of global corporatecitizenship and its maturation in the business world.We then propose a framework (Figure 1) for theintegration and implementation of global corporatecitizenship that requires (1) an organized appreci-ation of a firm’s operating environment, (2) anunderstanding of the key management domains,(3) the development of a stakeholder engagementprogram, and (4) developing metrics for measure-ment and reporting. We conclude by acknowledgingthat while implementing global corporate citizen-ship will likely be slowed during difficult economictimes, this does not diminish its importance.

2. The unfolding of global corporatecitizenship

A variety of terms have been used to describe com-panies and their accountability to society in responseto a fragile globalmarketplace. These terms include:corporate social responsibility, corporate responsi-bility, social responsibility, sustainable development,sustainability, accountability, corporate citizenship,and triple bottom line. Now, to reinforce the globalnature of the social demands placed on companies intoday’s boundaryless marketplace, the corporatecitizenship terminology has been expanded to ‘globalcorporate citizenship’ (Schwab, 2008). As illustratedin Table 1, companies have been receptive to boththe concept and the terminology.

While following the lineage originating withCarroll’s (1979) description of corporate social re-sponsibility as featuring four types–—economic,legal, ethical, and philanthropic–—Matten and Crane(2005) suggest that corporate citizenship hasemerged as the prominent term with respect tothe social role of business. Yet, definitions of corpo-rate citizenship are still very broad. Waddock’s(2003, p. 3) definition of corporate citizenship cap-tures the variety of descriptions utilized by compa-nies from a relationship standpoint:

ate citizenship

Development of a

Stakeholder Engagement Program

Develop Metrics for Measurement and

Reporting

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Table 1. A sampling of companies and global corporate citizenship in 2009

Company Corporate Citizenship Commitment

American Electric Powerwww.aep.com

We are citizens of each community we serve and take an active part inits affairs. . .

We prosper only as the community prospers; so we help it thrive in everyway we can.

Boeing www.boeing.com . . .refers to the work Boeing does in our diverse communities to improveour world.

Dow www.dow.com . . .we believe in the power of the Human Element to change the world.We place a high value on listening to our communities and strive not just tobe a good neighbor, but a global corporate citizen.

IBM www.ibm.com Innovation — joining invention and insight to produce important, new value —is at the heart of what we are as a company. And, today, IBM is leading arevolution in corporate citizenship by contributing innovative solutions andstrategies that will help transform and empower global communities.

McAfeewww.mcafee.com

. . .we believe we have a fundamental responsibility to be engaged membersof our communities. We consider our business’ impact on the environment,participate in the civic and public policy process, and give to those in need.

McKessonwww.mckesson.com

Our ICARE Shared Principles are brought to life every day through our effortsto improve the health of the healthcare system, support those in need, takesteps to protect the environment, maintain a diverse workforce, and treat ouremployees fairly. Through these actions our employees demonstrate our deepcommitment to each other, our customers, our shareholders, and ourcommunities every day.

Microsoft Corp.www.microsoft.com

Microsoft is committed to serving the public good through innovativetechnologies and partnerships that contribute to economic growth andsocial opportunity, and by delivering on our business responsibilities of growthand value to customers, shareholders, and employees.

Nestle Waters NAwww.nestle-watersns.com

. . .in order to create value for our shareholders and our company, we need tocreate value for our customers, employees, communities where we do business,and other stakeholders.

Corporate citizenship really means developingmutually beneficial, interactive and trusting re-lationships between the company and its manystakeholders–—employees, customers, communi-ties, suppliers, governments, investors and evennon-governmental organizations (NGOs) and ac-tivists through the implementation of the com-pany’s strategies and operating practices.

The Economist Intelligence Unit (2008, p. 6) definescorporate citizenship as ‘‘transcending philanthropyand compliance, and as addressing how companiesmanage their social and environmental impacts aswell as their economic contribution.’’ The Center forCorporate Citizenship (2008a) indicates corporatecitizenship is both a local and global phenomenonthat is on the agenda of most countries and compa-nies. A critical factor mentioned in Waddock’s (2003)definition, and one that comes up repeatedly indiscussions of global corporate citizenship, is thecomplexity of implementing corporate citizenship.

Global corporate citizenship can be a strategic man-agement tool for driving business results (Mirvis &Googins, 2006; Peloza, 2006); yet, the complexity ofimplementing corporate citizenship by integrating itacross all business functions requires a businessframework for corporate citizenship implementa-tion. While implementation will likely vary acrosscountries and companies, the constructs within thedomain for implementation should remain consistentacross various contexts both locally and globally(Center for Corporate Citizenship, 2008a).

3. An integrated, implementableframework

Survey data from the 2008 Economist IntelligenceUnit identified revenue growth, increasing profit,and cost savings as the top three drivers of globalcorporate citizenship. Unless management under-stands how to implement global corporate citizen-

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ship, however, the concept is bound to stay a fringeactivity rather than become a critical component ofthe organization’s core business strategy. Yet, imple-mentation of business strategies remains a source ofconcern for many companies. Despite the potentialimpact on growth, profit, and cost savings, reportssuggest that 66% of corporate strategy is never im-plemented and that companies realize only 63% ofthe financial performance promised by their strate-gies; this strategy-to-performance gap could beexplained by the fact that 95% of a firm’s employeesare either unaware of, or do not understand, theircompany’s strategy (Johnson, 2004;Kaplan&Norton,2005; Mankins & Steele, 2005).

Unfortunately, implementation is a vastly under-studied concept in management research and inpractice. It has been suggested that weak strategyexecution leads to weak strategy formulation,creating an endless formulation-implementation-performance cycle whereby it becomes difficultto discern good strategy from poor strategy andgood implementation from poor implementation(Crittenden & Crittenden, 2008). From a corporatecitizenship standpoint, a lack of understanding re-garding implementation dictates that both busi-nesses and society will continue to employ ashotgun approach to global corporate citizenship,thereby failing to realize positive performance out-comes. Profiting fromgoodcorporate citizenship thusrequires a framework for understanding and guidingglobal corporate citizenship implementation.

There is little inmainstreambusinessmanagementtheory and practice that equips companies to dealwith the 21st century operating environment inwhichglobal corporate citizenship is the norm rather thanthe exception, and business executives express un-certainty and frustration as to which programs tomove forward for implementation. In many compa-nies, global corporate citizenship is comprised of aset of fragmented and often reactive activities andprograms that have little relationship to a company’score business strategies. While providing insightand knowledge, the conceptual models of corporatecitizenship (e.g., Crittenden, Crittenden, Ferrell,Ferrell, & Pinney, 2011) do not convey a clearset of steps for understanding and integratingglobal corporate citizenship into core managementpractices.

To succeed and prosper, companies must adopt abusiness-based approach to the management andimplementation of global corporate citizenship(Berger, Cunningham, & Drumwright, 2007). Theframework presented here offers such and focusesspecifically on the critical constructs of: (1) compre-hending the firm’s operating environment, (2) under-standing the key management domains, (3)

developing a stakeholder engagement program,and (4) developing metrics for measurement andreporting. If companies are to engage in global cor-porate citizenship, a strong business case–—in termsof the risks and opportunities–—has to be made.

3.1. Comprehend your company’s 21st

century operating environment

Historically, business risk and opportunity assess-ment has focused almost exclusively within theeconomic realm. The license to operate came fromgovernments which, in exchange for corporate tax-es, took responsibility for ensuring that the publicgood was protected. This left firms to the business ofmanaging the bottom line. However, this socialcontract no longer holds true. Globally, individualfirms might be magnitudes larger–—wealth-wise, in-fluence-wise, and even sheer size-wise–—than a hostof nations in which they operate. Today’s companiesfunction in a much more complex environmentwhere the license to operate comes from a widevariety of global stakeholders (e.g., consumergroups, environmental activists), all of whom havethe potential to impact significantly a firm’s repu-tation and success.

Understanding the 21st century operating environ-ment is not an easy task, particularly since it involvesmyriad issues ranging from greenhouse gases to childlabor. At a very basic level, companies should identifymajor worldwide concerns (e.g., hunger, HIV/AIDS,corruption, terrorism) and then examine these con-cerns within the context of the company’s majorstakeholders. For example, if a firm sources fromcompanies that operate in countries ranking highon the Corruption Perceptions Index (TransparencyInternational, 2010), then corruption becomes anenvironmental operating concern.

The world is watching a corporation’s everymove, and it is almost too easy to violate a stake-holder’s concern. Furthermore, information spreadsfaster than ever before, now directed not only byformal news providers but through Internet-enabledchannels such as blogs and social network platforms.In today’s boundaryless world of interactions, aclear understanding of the company’s operatingenvironment is necessary for all firms.

3.2. Understand the key domains formanagement

While the operating environment plays a criticalrole in building a strong global corporate citizenshipstrategy, one of the first tasks in managing corpo-rate citizenship entails understanding exactly whatneeds to be managed. There are four domains

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within an organization that warrant careful consid-eration: (1) the company’s core ideology, (2) itsproducts and services, (3) business processes, and(4) areas of societal engagement. Each of thesedomains involves a discrete set of strategic globalcorporate citizenship issues that may significantlyimpact the company in terms of both risks andopportunities.

3.2.1. Core ideologyOver a decade ago, Collins and Porras (1996) pro-claimed core ideology as the glue that holds thecompany together. This core ideology consists of twoparts: (1) core purpose, which is the organization’sreason for existing; and (2) core values, whichnavigate the company in any endeavor. Since thecore ideology does not change continually, the com-pany’s global corporate citizenship efforts must fitclearly within the domain of the company’s purposeand values.

For example, corporate citizenship at Coca-Colamust fit strategically within the company’s corepurpose (that of refreshing the world, inspiringmoments of optimism and happiness, and creatingvalue to make a difference) and core values (lead-ership, collaboration, integrity, accountability,passion, diversity, and quality). The company’score ideology enables the firm to focus on globalcorporate citizenship issues such as water conser-vation, obesity, child labor, and poverty. At no pointdo the global corporate citizenship initiatives con-flict (risk assessment) with the company’s coreideology; as a matter of fact, the initiatives fit wellstrategically (business opportunities). This lackof conflict did not happen by chance; rather, it isthe result of an integrated strategy formulationand implementation cycle that enables the clarityof linkage between what gets planned and whatgets done.

Within the company’s core ideology, a firm mustensure that corporate citizenship is a component ofthe glue that binds the company together. Corpo-rate citizenship does not rest with a particularfunctional group; it has to be part and parcel ofthe company’s inner being, as well as a strategicdriver for all line functions. While companies are,by nature, run functionally and vertically, corpo-rate citizenship must be managed horizontally. Toaccomplish this, however, there needs to be adesignated corporate citizenship champion posi-tion within the management hierarchy. For exam-ple, General Electric (2010) has a Vice President ofCorporate Citizenship; the firm views citizenship asa full-time commitment with the same goals, strat-egies, and accountabilities that drive any other partof the business.

3.2.2. Products and servicesAs regards products and services, a global corporatecitizenship perspective relates to the way in whichthe company understands and integrates social andenvironmental considerations into its assessment ofmarket risks and opportunities when developingnew products and services. For example, Toyota’sintroduction of the hybrid car and GE’s Ecomagina-tion both fit comfortably within each company’sefforts toward creating value as a good corporatecitizen, while also meeting the needs of the world-wide marketplace in terms of business opportuni-ties. Too, industry leaders such as Unileverwith SurfExcel, ABN-AMRO with its ethics funds, and Gapwith (PRODUCT)RED are utilizing a corporate citi-zenship perspective to identify new market oppor-tunities and to position their businesses for thefuture. Other firms, such as Whole Foods with or-ganic foods, Seventh Generation with non-toxiccleaners, and Interface Carpets with 100% recycledcarpets, have made corporate citizenship the cen-tral driver of the core product/service strategies.The strategic fit is the result of a planning processvia which implementation abilities, with respectto product offerings, were matched clearly withsocietal demands.

The impact of global corporate citizenship on thecore business strategy with respect to the develop-ment of new products and services is an under-developed component of global corporate citizen-ship. At the front end of this approach, early leadersrecognizedmarkets for socially responsible productsand services, and used corporate citizenship as amarket differentiator (e.g., The Body Shop, Ben &Jerry’s). Today, companies need to realize the ben-efits of global corporate citizenship as a strategiclens to identify market risks and opportunities withproducts and services.

3.2.3. Business processesThe production of goods and services interactsstrongly with the issues related to global corporatecitizenship and includes processes that do not repre-sent a single resource within the firm. Companiesmust consider the management of a broad range ofsocial responsibility issues–—from health and safety,to going green, to respect for human rights, to anynumber of things–—when identifying corporate citi-zenship risks and opportunities. Clarity of influence,both internally and externally, is necessary for suc-cessful integration of corporate citizenship into thecompany’s business strategy. For example, whenCUTCO Cutlery initiated an internal ‘going green’campaign in 2008, the firmdefinitively stated exactlywhatwould andwould not be included in the process.While wrapping cutlery in paper for shipment is more

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environmentally friendly than newer techniques, forinstance, the process is also physically harder onworkers; thus, CUTCO decided that the benefit ofgreening in this instance did not outweigh the draw-back of extra stress on staff.

Other companies have focused externally on thesupply chain in relation to global corporate citizen-ship. The Body Shop, a company that has built itscorporate reputation on responsible business prac-tices, produces yearly–—among other items–—almost15million bars of soap that contain palm oil. Spurredby growing concerns about the impact of palm oilplantations on biodiversity, The Body Shop decidedthat it needed to source its palm oil from a sustain-able producer. Partnering with Daabon, a certifiedorganic producer in Colombia, The Body Shop be-came the first cosmetics retailer to introduce sus-tainable palm oil into the global beauty productsindustry–—a clear first mover advantage.

Both internal and external forces drive a com-pany’s business processes, and these processes arecritical success factors in relation to competitiveadvantage and superior performance. Moreover,these processes today are influenced by and havean influence on global corporate citizenship. Just20 years ago, managing business processes wasrelatively simple. Businesses operated within theconfines of the law and products/services wereproduced as necessary. Complying with the law,treating employees fairly, and donating moneyto good causes was sufficient to meet societalexpectations. Managing business processes respon-sibly in the 21st century, however, is significantlymore complex. Simply operating within the law isno longer sufficient to protect a company frommarket risks.

Companies must now monitor changing businessprocess expectations. Above and beyond simplyreporting on process performance, many industriesare demonstrating a commitment to responsiblebusiness practices with collaborations that producevoluntary standards which extend well beyond legalrequirements. One of the most sophisticated indus-try standard-setting efforts is the Responsible CareInitiative of the American Chemical Council. Adop-tion of this ‘voluntary’ code of conduct is a require-ment formembership in the council, and participantsmust allow independent third party audits to ensurecode compliance.

3.2.4. Societal engagementSocietal engagement represents the way in which afirm may strive to function above and beyond gen-erating wealth for owners/shareholders, and payingtaxes. Companies have employed a variety of ap-proaches to societal engagement in the 21st century,

running the gamut from supporting local schools,community health clinics, and arts groups; to inter-national involvement in broader social challengessuch as HIV/AIDS and global warming. Today, com-panies absolutely must connect with the communi-ties in which they operate, the broader civil society,and the governments of business-partner nations.This societal engagement is now a key component ofthe domain of management, since organizationalresources must be utilized in such a way as to bothreduce business risks and create market opportuni-ties for competitive advantage while simultaneouslygenerating societal benefits.

One company that has made societal engagementa fundamental component of business strategy isCUTCO Cutlery. Long boasting the ‘Made in America’mantra (business process) and taking an active partin the local Olean, New York community, CUTCObegan to nurture and grow its broader societalinvolvement upon launching its Go Red for Women1movement in support of the American Heart Associ-ation. Not only did the company guarantee a mini-mum donation to the cause, but also adapted itsproduct line to the effort; two CUTCO items wereoffered with red handles in support of Go Red forWomen1, with a percentage of each sale goingtoward the cause. Since concern for the communityhad long been a part of the company’s soul, CUTCOCutlery was able to integrate the ‘Go Red’ move-ment into the company’s product line and concernfor its employees’ welfare, thus engendering good-will internally and externally while also generatingproduct revenue.

Corporate philanthropy and support for employ-ee volunteers have long been hallmarks of a ‘good’company’s commitment to societal engagement.However, the global corporate citizenship of todayextends far beyond benevolent support, and mini-malist strategies are not seen as adequate orsufficient to address social needs and challenges.Stakeholders–—from government to the generalpublic–—increasingly want business to be an activepartner in contributing skills, knowledge, and oth-er resources toward addressing social challenges.Leading companies are taking up this challenge bycrafting societal engagement programs designedto shift the needle on significant social issues thatare aligned with their business and its expertiseand knowledge, with coalitions of businessesemerging to tackle social issues in partnershipwith NGOs and governments. Societal engagementsuch as this has the potential to address significantsocial challenges in areas where the businessimpacts society and, in the longer term, thosethat will directly and/or indirectly benefit thebusiness.

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3.3. Development of a stakeholderengagement program

Freeman (1984) was a thought leader in the area ofdeveloping business strategy that blended both theresource- and market-based views of the firm withsocio-political concerns. The morals and values in-cumbent in the socio-political concerns evolved intothe consideration of multiple stakeholders in devel-oping and implementing firm strategy. Stakeholdertheory is grounded on the assumption that ‘‘allpersons or groups with legitimate interests partici-pating in an enterprise do so to obtain benefits andthat there is no prima facie priority of one set ofinterests and benefits over another’’ (Mitchell, Agle,& Wood, 1997, p. 68). Thus, building an effectiveglobal corporate citizenship strategy requires anunderstanding of the full impact of the company’score ideology, products and services, business pro-cesses, and societal engagement on all key stake-holders.

The first step involves identifying major stake-holders and then looking at risks and opportunitiesfrom their vantage points. An individual or group isconsidered to be a stakeholder when any one ofthree characteristics apply: (1) the individual/groupcould be positively or negatively affected by theorganization’s activities either directly or indirectlyvia others’ well-being, (2) the individual/group cangrant or withdraw resources that are needed fororganization activities, and (3) the individual/groupis valued by the company (Maignan & Ferrell, 2004).Different industries and companies will have varyingeffects to consider. For example, large-scale extrac-tive industries such as mining and oil companies willhave a different set of environmental and socialimpacts than firms in the financial services sector.In conducting an impact analysis, it is important tonot only identify the obvious impact effects but alsoto consider other potential unintended consequen-ces of a company’s current and proposed globalcorporate citizenship efforts. For example, IKEArealized that the depth of its penetration in somedeveloping countries left it open to criticism that itwas creating a global monoculture which under-mined local norms and values.

To be of real value to the company, a stakeholderengagement program must be more than an occa-sional or one-off activity; indeed, it must be anintegral part of the organization’s management sys-tems (Peloza & Falkenberg, 2009). While scanningthe horizon for emerging trends is critical to suc-cess, so is hearing from stakeholders about theiragendas. A stakeholder engagement program can-not simply wait for stakeholders to volunteer theirconcerns. It is necessary to seek out important

stakeholders and, in some cases, educate them onproposed activities. For example, companies canroutinely conduct stakeholder engagement and ed-ucation sessions with local groups as a normal part ofdoing business in the community.

Actively monitoring company actions and stake-holder expectations is particularly important in anenvironmentwhere public opinion can shift suddenly.In less than a decade, for example, obesity wentfrom being viewed as an overwhelmingly personalresponsibility to one that is now viewed as a signifi-cant part of corporate strategy and responsibility(Bonini, Mendonca, & Oppenheim, 2006). A stake-holder engagement program can help the companyunderstand corporate citizenship issues that arecritical to long-term success; that is, matchingthe stakeholder focus with the business’ risks andopportunities.

3.4. Develop metrics for measurementand reporting

To be a meaningful aspect of business practice,activities related to global corporate citizenshipmust have measureable goals backed by perfor-mance metrics and progress must be reported. Suchgoals should not only cover social and environmentalobjectives (e.g., reducing gases, reducing waste)but should also include the business benefit (metric)of the corporate citizenship action. Since the jury isstill out as to whether a dollar investment in globalcorporate citizenship returns more or less than onedollar in benefit to shareholders, researchers call forboth financial and non-financial measures of globalcorporate citizenship performance (Barnett, 2007).Regardless of whether the metric falls within therealm of corporate financial performance or withinthe domain of corporate social performance, ‘‘Whatgets measured, gets done’’ (Economist IntelligenceUnit, 2008, p. 18).

Companies that have engaged in global corporatecitizenship initiatives for a relatively long period oftime have been able to show the impact both finan-cially and socially. For example, General Electrichad clearly stated financial objectives and metricsin launching Ecomagination: the company said thatit wanted to more than double its research invest-ment in cleaner technologies and introduce moreclean-tech products by doubling its current $10billion in annual revenues from Ecomaginationproducts and services. With respect to social per-formance metrics, GE sought to reduce its green-house gas emissions 1% by 2012 and the intensity ofits greenhouse gas emissions 30% by 2008 (Pinney,2009). In another example of corporate social per-formance metrics, Home Depot (2009) attempts to

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educate consumers about their purchasing behaviorby telling them it takes 64 trees to build an averagehome and that the typical American consumesenoughwood andpaper products annually to producea 100 foot tall tree that is 16 inches in diameter.

Companies should disclose performance related toglobal corporate citizenship in an annual social re-port. The challenge for many companies, however, isto decide which of the myriad reporting standardsand codes should be used to inform on citizenship-related efforts. A logical chain of events in this regardis to look at the reporting standards and practices ofthe industry in which the company operates. Thereare increasing efforts at the international level todefine normative standards around principles andguidelines for reporting (e.g., the Global ReportingInitiative). Unfortunately, companies often rush intocitizenship reporting as a reaction to external pres-sure, without really considering what material isrelevant to the business. This rush-to-report canresult in volumes of pages of little value, to bothinternal and external stakeholders, in understandingwhat the company is really attempting to achieve forthe business and society.

Baxter International Inc., a leader in this arena,identified three major reasons for preparing a tangi-ble social report: tracking/demonstrating the busi-ness case, demonstrating leadership, and balancingthe tension internally and externally (Richards &Bharwani, 2008). At Telekom Austria Group (2010),for example, social reporting has become an inte-gral component of the company’s steering struc-ture, and the company refers to its yearly socialreport as ambitious because ‘‘the company docu-ments its current performance as well as newdevelopments and measures that have been imple-mented’’ (p. 39).

Clearly, every corporate citizenship programneeds to have measureable impact factors that arecritical to economic and social success–—whether itbe cost reduction, employee loyalty, brand recogni-tion, or customer loyalty. Businesses and societycannot forget that it is important to develop a busi-ness case for global corporate citizenship. Thismeansthat corporate citizenship has to be connected to thecore business via both social and financial perfor-mancemetrics. Importantly, thesemetricsneed tobereported back to stakeholders in the form of a socialreport.

4. A Panglossian perspective?

We would be remiss to present global corporatecitizenship as the end-all, be-all for businesses.While ‘doing good’ has a positive ring to it and is

socially attractive in the 21st century, the reality isthat corporations worldwide are in the midst of aneconomic crisis and, unfortunately, it is difficult toargue that there is a positive causal link betweenglobal corporate citizenship and company financialperformance. Thus, are we presenting a Panglossianperspective of the world; that is, are we beingblindly or naively optimistic about the need fordesigning and implementing a global corporate citi-zenship strategy?

We believe that we are not peddling a Panglossianperspective when proposing a framework for im-plementing global corporate citizenship. Rather, itis only through a logical framework that companiescan truly understand the value and ultimate im-pact of a global corporate citizenship strategy. Thereality is that some companies may find globalcorporate citizenship has cost limitations that in-hibit implementation efforts during these difficulteconomic times. This does not mean that corpo-rate citizenship is not important for these compa-nies. Rather, it shows that economic conditions canslow corporate citizenship initiatives as with anyother strategic initiatives and/or that the companyhas to learn to prioritize its initiatives. More im-portantly, an implementation framework for globalcorporate citizenship enables companies to under-stand what can and cannot be accomplished,allowing implementation to play a critical andnecessary role in the formulation of what canand should be done.

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