EVENTS

Date:	Thursday, December 4, 2008
Time:	10:00 AM -- 4:00 PM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

 

Corporate Responsibility Shifts in Era of New Internationalism

 

 

WASHINGTON, DECEMBER 15, 2008--Globalization has created an identity crisis for the modern day corporation. On December 4, AEI hosted a conference to explore the changing relationships between corporations, government, and civil society. Although corporations remain major generators of wealth in the world, globalization has tended to impose even greater levels of responsibility on them in the pursuit of social goals such as human rights, poverty alleviation, and environmental protection. Increased corporate social responsibility offers opportunities for social improvement, but it also creates challenges for corporations operating in a competitive marketplace.

"Clearly, in one form or another, corporate social responsibility is here to stay," said AEI adjunct fellow Jon Entine, who convened the day's conference. "Governments, companies, and NGOs will, by necessity, need to work cooperatively to address a range of issues." Conference participants attempted to locate the appropriate balance between government, corporate, and civil society responsibility.

One of the drivers of increased corporate social responsibility is NGOs and civil society groups, which are demanding that corporations adopt various social agendas that are not necessarily part of their business plans. Fred Smith, president of the Competitive Enterprise Institute, argued that this is asking corporations to do something they were never intended to do. "The corporation is a specialized institution. It does not try to do everything. It tries to create wealth in its niche." Civil society groups and governments have seen the effectiveness of corporations--their unmatched ability to generate profits--and have asked them to be equally effective in promoting social ends. Instead of misdirecting corporations to take on social goals, like human rights or the environment, governments and civil society groups should step up themselves and take responsibility for the issues that they were created to address. Asking corporations to assume the role of government is not a strategy for success, argued Smith. "If that's the best you can do in the human rights business and the environment, we're in trouble."

Nonetheless, civil society has grown and is now a permanent fixture of a globalized world. "It is here to stay and it will be having a major factor in world affairs for years and decades to come, said Don Eberly, author of The Rise of Global Civil Society: Building Communities and Nations from the Bottom Up. This ultimately presents an opportunity for strengthening the values that underpin democratic institutions. "Where does the democratic citizen come from? . . . From the small'scale civic associations where people learn the habits of practicing citizenship." As civil society groups take an active role in corporate social responsibility, NGOs and corporations will learn to build on each other's core competencies, Eberly said, and forge a new arrangement that bolsters democratic values.

Jonathan Doh, a professor of management at the Villanova School of Business, argued that civil society brings new perspectives to business and government and that that is creating new and promising possibilities. One example is international trade negotiations, which he said have been positively affected by the involvement of civil society groups. "I think civil society belongs in international trade negotiations. I think it's an artificial separation to say, 'This is about business and commercial affairs,' because, by definition, business and commercial affairs spill over into civil society. We are civil society. We're part of that discussion," Doh said.

The rise of civil society groups and their involvement with corporate social responsibility is causing corporations to redefine themselves. As the lines of responsibility between corporations, governments, and civil society groups blur, corporate leaders will need to assess the extent to which they are willing and able to become the champion of social goods such the environment, human rights, and poverty alleviation. "The [corporation] as an institution is one of the most important social inventions in history," Smith said. Regardless of one's view of corporate social responsibility, we should all work for "a moral vision of the [corporation] and how to expand the institutions that make it possible for it to play an even more positive role in the future."

--DAVID PEYTON

For video, audio, and more event information, visit www.aei.org/event1843/.

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