Unit 5, Lecture 1 - CSR and Private Governance
Nike’s Code of Conduct: suppliers highly dependent on Nike contracts were least likely to show improvements, in this CSR approach there is no role and no support for trade unions
U.S. Fair Labor Association (multi-stakeholder initiative): US apparel brands, NGOs and US universities. Has been unable to stem routine violations of standards
CSR schemes document management’s efforts toward risk management and self-referential problem solutions. These schemes consistently avoid implementing workers’ rights to freedom of association and collective bargaining.
Increasing internationalization has curtailed the capacity of states to cushion the social impacts of market liberalization and given rise to a dis-embedded corporate sector in a new global public domain characterized by “governance without government”. In response to charges of humans and workers’ rights violations, MNEs have responded by assigning themselves a capacity for self-governance.
The ILO defines CSR as a way in which enterprises give consideration to the impact of their operations on society and affirm their principles and values both n their own internal methods and processes and in their interaction with other actors.
CSR statements are often quite vague without defining processes. There is a clear mismatch between programmatic statements on sustainable development and the corporate drive for flexibility.
Motivations to develop a CSR program – reputational integrity, risk management (prevention of labor unrest), define corporate culture and goals and develop positive corporate image
Multinational Enterprises – merger of capital from more than one nation-state
Transnational Corporations – owned / controlled by nationals of one country and conduct activities across national borders
Global Value Networks – business activities from any part of the world although they mostly have a regional or continental focus. The term “value” refers to the purpose and the economic relationship necessary for the overall process to function: whether in regard to extraction, supply, production logistics, sales or recycling.
Externalities – the cost or benefit that affects a party who did not choose to incur that cost or benefit (i.e. air pollution to society that did not assume the cost of cleaning the atmosphere)