Enhansing Business-Community Relations


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The Role of Volunteers in Promoting Global Corporate Citizenship
The Philippine Report

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Enhansing Business-Community Relations

  1. 1. Enhancing Business Community Relations:The Role of Volunteers in Promoting Global Corporate CitizenshipPhilippine Business for Social ProgressUnited Nations VolunteersNew Academy of BusinessEditorial BoardRamon R. Derige, Associate Director, PBSPElvie Grace A. Ganchero, Manager, PBSP-Center for Corporate CitizenshipDavid F. Murphy, PhD, Director, New Academy of BusinessRupesh Shah, PhD, Action Researcher, New Academy of BusinessBeatriz Fernandez, Programme Officer, UNVProject CoordinatorAngelito A. Nayan, Senior Program Officer, PBSP-CCCNational United Nations VolunteerCharmaine Nuguid-Anden, Business-Community Relations SpecialistCover Design and LayoutKatrina B. VillaPhilippine Business for Social Progress (PBSP) was created by socially responsible business people in 1970 as a response to thesocio-economic crisis confronting their time. Today, the Foundation has firmly established itself in the social development sectorand has reaped various achievements. Working with other sectors of society, it has made a difference in the lives of thousands ofunderprivileged Filipinos. It has, likewise, been at the forefront of the practice of corporate social responsibility. As it marks its 33years, the Foundation is planting new seeds – charting directions and creating active responses to the challenges posed by thetimes.The United Nations Volunteers (UNV) programme is the UN organization that supports human development globally by promotingvolunteerism and by mobilizing volunteers. It is administered by UNDP and operates amidst growing recognition that volunteerismmakes important contributions, economically and socially, to more cohesive societies by building trust and reciprocity amongcitizens. Every year some 5.000 UN Volunteers from more than 150 different nationalities actively support the programmes of theUnited Nations itself and almost all UN funds, programmes and specialized agencies.The New Academy of Business is committed to transforming business and management practice through education and research.New Academy creates innovative learning materials to explore social, ethical and environmental questions, helping entrepreneurs,leaders, managers, workers and students respond to sustainability and organisational responsibility. New Academy also works withpartners to develop insights into these complex issues through a people-centred learning approach known as ‘action research’. Basedupon continuous cycles of reflective observation and practical application, action research creates new understandings and supportspersonal and organisational change. continued on inside of back cover
  3. 3. W hen we began to explore collaboration between United Nations Volunteers (UNV) and New Academy of Business in 1999, the various individuals involved in our initial discussions agreed on the needto promote greater international understanding of the experience of responsible business practice indeveloping and transitional countries. At the global level, we noted the dominance of Northern and Westernperspectives on corporate citizenship and corporate social responsibility. Much of the impetus for thesenew or reformulated business concepts appeared to be coming from European and North Americanmultinational corporations and NGOs. So we wanted to find ways to give greater international voice to thediversity of business and community experience on responsibility issues in other parts of the world. Wealso wanted to identify and promote new models of doing business that would build upon and be relevantto local experience in the majority world.In mid-2001, UNV and the New Academy launched the ‘Enhancing Business-Community Relations’ actionresearch project together with various partners in Brazil, Ghana, India, Lebanon, Nigeria, Philippines andSouth Africa. In the Philippines, we have benefited from working with Philippine Business for SocialProgress (PBSP), one of the world’s leading organizations mobilizing and supporting the role of business insocial development. Established in 1970 more than a decade before Business in the Community in the UK,PBSP has developed a deep understanding of the social, economic and environmental benefits of closermore mutually beneficial business-community relationships.With the publication of PBSP’s timely report – ‘Enhancing Business Community Relations: The Philippines’– the invaluable development experience and knowledge of Filipino companies, communities, NGOs andgovernment agencies is brought together for wider global dissemination. We have very much valued thisopportunity to work together with PBSP and UNV on this project in the Philippines, and look forward tofuture, fruitful collaboration.Dr. David F. MurphyDirectorNew Academy of BusinessBath, 9 October 20034
  4. 4. EBCR Philippine Country Report FOREWORDA s the role of government is shrinking because of globalization, more and more companies are expected to take an active role in socio-economic development. Leadership companies, inparticular, believe that beyond philanthropy, investing in people and society makes good businesssense. These companies are beginning to realize that if they are to make a lasting and sustainablecontribution to society, they need to look into their core competencies and share their internal valuesand skills to benefit, for instance, community-based organizations, the youth or women entrepreneurs.Indeed, this is an opportune time for both large and small companies to help make a positive impacton society by sharing their most precious resource – their people.It is, therefore, with great pleasure that the Philippine Business for Social Progress (PBSP) partneredwith the New Academy of Business (NAB) and the United Nations Volunteers (UNV) to produce an‘action research project’ entitled, Enhancing Business-Community Relations: The Role of Volunteersin Promoting Global Corporate Citizenship, after two (2) years of collaborative inquiry.The Philippine Country Report, in particular, focuses on determining innovative corporate-communityrelations model and the characteristics of genuine corporate-community partnership (CCP) building.Likewise, ten (10) case studies of select companies are highlighted, illustrating their unique “brand”of Business-Community Relations (BCR).Indeed, PBSP, UNV and NAB strongly believe that it is strategic for companies to pursue corporatevolunteerism as a strategy and mechanism for BCR initiatives within the context of corporate socialresponsibility (CSR) or corporate citizenship. 5
  5. 5. This research project not only identifies major drivers and innovative models of BCR in a developingcountry such as the Philippines, but also, and more importantly, recommends action points on thefollowing: improving the quality of stakeholders engagement; enhancing the role of government;maximizing volunteerism as a strategy; and ensuring the effectiveness of BCR engagements throughenabling factors.We hope that this action research, together with six (6) other EBCR Country Reports from Brazil,Ghana, India, Lebanon, Nigeria, and South Africa, will help bridge the gap in understanding andcultivating relationships between communities and businesses that are more socially just andecologically sustainable.GIL T. SALAZARExecutive DirectorPhilippine Business for Social Progress6
  6. 6. EBCR Philippine Country ReportCommunity Relations,” implemented internationally in partnership with the New Academy ofBusinessand the United Nations Development Programme, and within the Philippines with the PhilippineBusiness for Social Progress. This project has generated a wealth of knowledge, and this PhilippinesCountry Report is one of its key publications.there is a rich and promising future for corporate volunteerism and partnerships between the privatesector and UN Volunteers. 7
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  8. 8. EBCR Philippine Country Report TABLE OF CONTENTS 13I. INTRODUCTION 14A. The Overall EBCR Project 1. Action Research 2. Partnership Promotion and Building 19B. The EBCR Project in the Philippines 1. The Context and Objectives of the Philippine EBCR Project 2. Application of the Action Research Methodology in the Philippine Project Study a. Volunteerism as a Mode of Partnership of BCR b. The Emerging Models of BCRII. ANALYSIS AND FINDINGS 35A. Business-Community Relations in the Philippines: A Review of Literature 35 1. Emergence of BCR in the Philippines 2. Drivers of BCR 3. Emerging Models of BCR 4. Quality of Stakeholders Engagement 5. Volunteerism as a Key Component of BCRB. Business-Community Relations in the Philippines: Action Research Findings 56 1. Findings from Survey and Scoping Research a. Emergence of BCR in the Philippines b. Drivers of BCR c. Emerging Models of BCR d. Quality of Stakeholders Engagement e. Volunteerism as a Key Component of BCR 2. Findings from Case Studies a. On Emerging BCR Models and Strategies of Engagement b. On PBSP’s Experience as a Model BCR c. On Corporate Volunteerism d. Distillation Phase 9
  9. 9. III. CONCLUSIONS 75A. PBSP’s Corporate Citizenship as a Model Framework 75B. On the Quality of Stakeholders’ Engagement 76C. On the Enhancement of Government’s Role 78D. On Volunteerism as a Strategy 80E. Enabling Factors for Effective BCR Engagements 82IV. OVERALL RESEARCH FINDINGS: INTERNATIONAL TRENDS 87ANNEX 1: Country Background 97ANNEX 2: Case Studies • CEMEX with a Heart: A Holistic Approach to Community Development 107 • Davao Light and Power Company: Street Lighting Program 119 • Figaro Coffee Company: Save the “Barako” Bean 127 • In the Business of Making Peace: La Frutera and Paglas in the Philippines 134 • DTI/Nestlé: The “Kapihan sa Quezon” Program: A Partnership Towards Community 142 Development • Organized Advocacy for Corporate Citizenship: The PBSP Story 153 • The Petron Corporation: Volunteerism in Action (VIA) 168 • Building Community Partnerships: The Community Technical Working Group 182 (CTWG) Experience: Silangan Mindanao Exploration Company, Inc. • Sun Microsystems Philippines, Inc.: Open Source/StarOffice Training Volunteering 192 Case • Unilever/DTI : Growing Cucumbers: A Case Study on Unilever and DTI 20010
  10. 10. EBCR Philippine Country Report 11
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  12. 12. EBCR Philippine Country Report INTRODUCTIONW ith business, trade, and commerce becoming more global and complex, new and greater demands for enhanced corporate social responsibility and transparency are being placed on companies by awider range of communities or stakeholders. Businesses today are realizing that they are expected notonly to concern themselves with the quality of management in their workplace (employees, shareholders,union) and marketplace (customers, suppliers), but also to take active interest in and produce an overallpositive impact on society. The latter includes sub-contractors, government agencies, local communities,NGOs, multilateral organizations, religious organizations, the media, academic institutions, and variousother internal and external interest groups.To make globalization work for all the world’s people, the UN Secretary General, Mr. Kofi Annan,introduced the Global Compact in 1999, calling on business leaders to embrace its nine principlesupholding human rights, labour rights, and environmental responsibility. More than 300 companiesworldwide have already lent their support to this new global partnership initiative.Alongside achieving their corporate goals and building goodwill toward other companies, corporationsare expected to also provide solutions to social problems, and to strengthen the local economy.Business-Community Relations (BCR), therefore, encompass various interactions between private sectororganizations and local communities that promote community development, environmental sustainability,improved labor practices and other dimensions of corporate citizenship. Business Community initiativesinclude but are not limited to cause-related/social marketing, corporate community involvement (CCI),community economic development and philanthropy. Businesses may show social responsibility byundertaking initiatives/projects related to socio- or economic issues such as education, environment,health, business ethics, intellectual property rights, culture, agriculture, human rights, human resources,poverty, gender, etc. (Mahajan, UNDP) 13
  13. 13. A. THE OVERALL EBCR PROJECTI n mid-2001 United Nations Volunteers (UNV) and the New Academy of Business, U.K., launched an 18-month action research project entitled “Enhancing Business-Community Relations: The Role ofVolunteers in Promoting Global Corporate Citizenship.” This project was conceived as one ofnumerous initiatives that UNV launched during the International Year of Volunteers1. At the time itwas recognized that little was known about the extent to which healthier relationships were beingforged between communities and businesses in developing and transitional countries and the rolethat volunteerism would play in these relationships. The objectives of the collaborative project were: 1. To explore current trends in business-community relations and corporate citizenship in seven developing countries – Brazil, Ghana, India, Lebanon, Nigeria, Philippines and South Africa. 2. To identify and promote new models of business-community relations and enhanced corporate citizenship practices at the local level in these developing (or transitional) countries. 3. To engage the participation of volunteers as partnership facilitators between UNV and other agencies businesses, and local communities.Seven locally based “UNV Specialists in Business-Community Relations” spearheaded the action researchefforts. The project drew upon the strengths and resources of host partners: Instituto Ethos in Brazil, theAssociation of Ghana Industries (AGI) in Ghana, The Energy and Resources Institute (TERI) in India, PhilippineBusiness for Social Progress (PBSP) in the Philippines and the African Institute of Corporate Citizenship(AICC) in South Africa. For the Lebanon and Nigeria components, the UNV Specialists were based at UnitedNations Development Programme (UNDP), coordinating efforts with UNDP’s wider private sector engagementin these two countries.1 see http://www.unv.org/infobase/anrep/2001/ar01_en.pdf.14
  14. 14. EBCR Philippine Country ReportImplementation agencies were: OVERVIEW OF THE ACTION RESEARCH1. The United Nations Volunteers METHODOLOGY programme (UNV) In order to create sustainable and UNV is the volunteer arm of the United responsible business practices, companies Nations. Established by the UN General are confronted by paradoxes which arise Assembly in 1970, UNV, which works when they attempt both to shift cultures through UNDP’s country offices around the and frames of reference as well as to world, promotes volunteer contributions to institute new action. Much writing and development and serves as an operational research on these issues has been partner in development cooperation at the theoretical, or has taken the form of request of the UN member states. advocacy:2 little of it is based on practice, documenting what is being learned by those2. The New Academy of Business, U.K. who are actively working at change towards sustainable and responsible business, at New Academy of Business is an both small and large scales. This project has independent business education sought to use an approach to research organization and a registered UK charity known as collaborative inquiry, drawn from that was established in 1995 by Anita the ‘action research’ family of Roddick, founder and Co-Chair of The methodologies, to explore current trends in Body Shop International Plc. Since its business-community relations and related inception, the NAB has been at the corporate citizenship initiatives in seven forefront of a new wave of business countries. thinking and action on global corporate responsibility. Action research is unlike traditional research in that participants seek to act inThe project is composed of two phases: an action ways that are both useful to the peopleresearch phase and a partnership promotion and involved – producing knowledge that isbuilding phase. relevant and practical – and empower the participants as they construct and use1. Action Research knowledge.3 Work is done – in both personal and group settings – to bring the values, This phase included a qualitative research ‘theories’ and practices of an individual study aimed at businesses to investigate closer together. Participants engage in why and how they became involved in cycles of action and reflection: individuals development initiatives. Research and groups move between acting, observing findings from each country were compiled2 See articles in the Journal of Corporate Citizenship or Business and Society Review, for example3 For elaborations on the family of practices labelled as action research – around which the New Academy bases its researchactivity – see Handbook of Action Research by Reason and Bradbury (2001). For research into corporate responsibility using 15action research methodologies see Bendell (2002), Prieto and Bendell (2002) and Shah (2001). 15
  15. 15. and jointly analyzed. The UNV and the New Academy of Business coordinated the OVERVIEW OF THE ACTION RESEARCH research in the seven countries and METHODOLOGY (...continued) would disseminate the findings via conferences, workshops and publications. experiences and then reflecting upon these, with the intention that more meaningful action can be generated. Collaborative2. Partnership Promotion and Building inquiry is a form of action research that seeks to promote open, shared reflection The project would offer to individual about organizations. This, in turn, enables companies tailor-made strategies that participants in the research process to would benefit both their firm and local address organizational and personal value communities. Various activities under the differences and to find creative ways of project include: resolving paradoxes. a. Creating awareness through The project has been designed to enable written, audio visual, and virtual each UNV specialist to undertake research media (web-site and e-mail list). with his or her UNV colleagues, working in similar but different ways in other parts of b. Identifying and forming the world, but with common objectives. By partnerships between various finding ways to connect with co-inquirers, stakeholders including UNDP, to share experiences and discoveries – other lead UN agencies, civil including what each found difficult about society, local community-based their action – the aims were to enrich the associations and NGOs, businesses, process, build a shared understanding of the associations, chambers of work being done, and develop skills in commerce, universities, etc. collaboration that were directly relevant to the partnership-building task. c. Organizing national workshop to bring together businesses and This form of inquiry is often seen as having development actors together for four main characteristics: brainstorming, dialogue and joint action. • It is conducted in repeated cycles of action and reflection. The interplay d. Publishing reports, brochures, between what is discovered and newsletters, case studies, and a achieved through action, and what guidebook on business- sense is made of this through reflection, community relations.16
  16. 16. EBCR Philippine Country Report OVERVIEW OF THE ACTION RESEARCH METHODOLOGY (...continued) e. Formulating Project Document/ is important, lending a discipline to the Joint Project Proposals with UNV/ process UNDP/UN Agencies/ New Academy of Business. • It seeks a balance between inward, reflective attention and outward, f. Attending to other activities as practical attention. may arise within the course of the project. • Being an action inquirer also requires the development of a ‘critical’ perspective – being able to get some distance between both the action andProject Activities experience, and evaluate it, in the light of ideas, theory, reading, and otherDuring the project each of the UNV specialists perspectives.undertook a range of collaborative inquiry andnetworking activities. Following the orientation in • Working in this way demands that thethe UK in September 2001, the project specialists researcher develops participation andreturned to their respective countries and began collaboration, with other co-inquirersgathering information and resources regarding the and with those with whom they arestate of business-community relations at the working such as sponsors, hosts, andnational level and documenting good practice those who supply information. Theexamples. Between April and September 2002 intention is that this kind of researchnational workshops were conducted in each of the is conducted not on people, but withseven countries. In seeking to go beyond traditional people.research, the specialists also developed theirunderstanding by engaging in partnership-buildingat the national level and sharing experiences acrossthe seven countries through online discussionand sense making. 17
  17. 17. Project Reports1. The various activities at national level are described in the seven country reports. Each country report offers the reader an overview of current national trends in business-community relations, corporate citizenship initiatives and the role of volunteers in these processes.2. Additionally each report presents ten case studies (total 70 case studies from the seven countries) that highlight specific practices in the area of business-community relations.3. A final global report will be made available towards the end of 2003. It will draw together the work from the seven countries and develop a synthesis of international trends in business community relations, with special attention given to the role of volunteers in promoting responsible business practice.4. Finally, follow-up projects will be developed, all aimed at continuing to create healthier relations between communities and businesses.Project BenefitsHow will the corporate sector benefit from this project?1. The project will directly benefit businesses and local communities which participate in projects that are generated, as well as local sub-contractors and suppliers that are directly and indirectly affected by relations between participating communities and companies.2. By engaging in community initiatives, companies will clearly benefit from: • New partnerships with UN agencies; • Enhanced brand image and reputation; • Improved customer goodwill and loyalty; • Increased attractiveness to investors; • Strengthened relationships with all stakeholders; • Improved prospects for long-term financial and organizational success; • Enhanced perception among communities and the public; • Strengthened employee loyalty, commitment, morale, retention, and performance; and • Enhanced ability to attract more talented and motivated employees.18
  18. 18. EBCR Philippine Country ReportOther benefits of the project are: • enhance international understanding of the meaning and experience of business-community relations across different geographical and socio-economic contexts; • facilitate international learning and networking for the development of partnerships and promotion of locally grounded models of healthy business-community relations; and • encourage the active participation of volunteers in the promotion of business-community relations and related global corporate citizenship practices.B. THE EBCR PROJECT IN THE PHILIPPINESW hile globalization, especially in the past decade, has brought about positive changes in the socio- economic and political environments of many countries, it has put developing countries like thePhilippines in a disadvantaged position. The issues and problems that have surfaced in the country becauseof globalization have called for redefining roles of government, civil society and businesses, and havedemanded new approaches and strategies to address these concerns.Government, business and civil society have responded to this challenge by way of exercising their influenceand power. In order to achieve development at national and local levels, these three sectors are learningto be more inclusive, more efficient, transparent and accountable in the way they operate and morestrategic as they aim to institutionalize and sustain their efforts. These sectors have recently emerged asorganized stakeholders instead of beneficiaries and have new demands and expectations from one anothertoward sustainable community development.Some members of the business sector have come to a point where involvement for social good is nolonger considered optional. Corporate Social Responsibility (CSR) or Corporate Citizenship (CC) servesas a guiding principle that compels companies to make strategic choices based on an understandingof the total impacts of their business to the community, in particular, and to society, in general. CSRposits that corporations have social and environmental objectives on top of their economic purpose.Recently, the notion of CSR has been reviewed in the light of the challenges brought about byglobalization. The slowdown of Philippine economy has an effect on the amount of resources thatbusiness will channel for social welfare. Thus, corporations are looking for models of CSR that work 19
  19. 19. best for the company and society and practices that create greater value to both business andcommunity. An understanding of such models will also enable CSR advocates to innovate and sustaintheir efforts within the context of the changing roles of the various stakeholders in a globalizingenvironment.1. The Context and Objectives of the Philippine EBCR ProjectIn the Philippines, the project was hosted by the Philippine Business for Social Progress (PBSP), a leadingcorporate-led foundation which promotes business sector commitment to social development. The projectwas specifically billeted in the program portfolio of the Center for Corporate Citizenship (CCC), whichserves as the Foundation’s arm for research and advocacy, program development, dissemination and resourcemobilization for corporate citizenship.As shown in Fig. 1, PBSP over a period of 30 years has seen corporate citizenship expressed in four, oftenoverlapping, areas: 1. Environmental Stewardship; 2. Managing Workplace Concerns; 3. Social Investment; and 4. Corporate-Community Partnership.The EBCR project was grouped under the latter two areas of the Center’s work plan with emphasis onCorporate-Community Partnership (CCP). Figure 1: The PBSP Corporate Citizenship Framework©20
  20. 20. EBCR Philippine Country ReportUnder PBSP, the Philippine EBCR project objectives focused on determining innovative Philippinecorporate-community relations models and the characteristics of genuine corporate-communitypartnership building. The project sought to examine the dynamics of corporate-, community- andgovernment-facilitated BCR, the enabling and hindering factors they face in BCR promotion andimpacts of their efforts to the community. The project also intended to look at volunteerism as a keycomponent of BCR. Since the Philippines is one of the few developing countries with a long historyof CSR, the project aimed to promote CSR not only for local advocacy but also as model or benchmarkfor other developing countries. PBSP, a pioneer and strong player in Philippine CSR, was also considereda UNV partner for potential joint projects, aside from companies and communities.2. Application of the Action Research in the Philippine Project StudyThe project adopted the action research as a methodology to explore current trends in business-communityrelations and related corporate citizenship initiatives in the Philippines. Following PBSP-CCC’s ProgramDevelopment Management System, the action research and project proposal phases were stretched to a 5-phase loop: Research, Distillation (generally done with external publics), Program Development and Piloting,Evaluation and Documentation and Dissemination. As the Overall Project itself only has 2 phases, theapplicability to the local Project is only until the 3rd phase. Any work that would extend to the 4th and5th phases would be part of the work on the implementation of the proposal itself. Figure 2: Program Development Management System and the CC Framework 21
  21. 21. Research PhaseUnder the Research phase, new actionable and emerging issues that touch on the four CC themes wereidentified. Employing the Scoping Research Terms of Reference developed by PBSP, ten (10) case studieswere developed and used as the base for thematic-sectoral analysis (Government, Business, Civil Society).These ten case studies were developed using key informant interviews, focus group discussions (with thestakeholders involved in each identified engagement), as well as document analysis.Presented on the next page is the Philippine research implementation matrix.22
  22. 22. EBCR Philippine Country Report Table 1: Research Implementation Matrix Research Themes Specific Research Research Components Objectives/ AgendaOverarching Theme: Enabling Volunteerism and Stakeholder Partnership as a Context and Method for Corporate ResponsibilityPBSP (Center for Corporate • Identify specific challenges/ Case study on the Center forCitizenship) as a developing opportunities for corporate Corporate Citizenshipcountry model of corporate citizenship in a developing countrycitizenship contextQuality of Stakeholder • Identify trends and gaps in • Scoping Research onEngagement (Business- stakeholder engagement (i.e. Corporate-CommunityCommunity Relations to business, civil society, Engagements (in the contextCorporate Community communities, etc.) of Volunteerism)Partnerships) • Identify alternative/ non- • 6 case studies traditional activities/ venues for corporate responsibility/ volunteerism • Identify alternative venues for promotion of quality stakeholder engagement • Promote stakeholder view of communities • Promote internal (i.e. employees), virtual, national & global community concepts • Promote views on volunteerism as a context and mechanism for stakeholder relations • Provide a mechanism for community/civil society pursuit of corporate responsibility - empowerment of communitiesEnhancing Government Role • Enhance the role of national govt. • Scoping Research onin encouraging responsible in encouraging corporate Government-facilitatedcorporate behavior responsibility Business-Community Relations • 3 case studies • Survey on Correlation of Fiscal Incentives and Socially Responsible Corporate Behavior 23
  23. 23. Distillation PhaseThe Distillation phase involved the conduct of interactive sessions with internal and external groups inorder to get additional input and broad-based understanding and/or support for particular options orpositions.To a large extent, the Meeting of Minds (MOM) at the 1st Asian Forum on CSR was used as an ad hocinteractive session to share preliminary findings. For more focused discussion, a Roundtable Dialogue wasconducted with key internal and external audiences. The final version of the Country Report itself wassubjected to a Round Table Discussion on September 9, 2003.Program Development PhaseThe Program Development Phase employed a management systems approach to ensure institutionalizationof programs and projects with the following aspects: policy development, strategic program developmentand implementation, systems development, and measurement.Table 2 on the next page shows the input–mechanism—output matrix of the Philippine Research Project.24
  24. 24. EBCR Philippine Country Report Table 2: Input-Mechanism-Output Matrix of the Country ProjectCOMPONENTS ACTION RESEARCH PROGRAM ADVOCACY DEVELOPMENT AND Project Proposal PROMOTION PBSP as CC Incentives/ Govt.-led CCP/ expression CCP and Volunteering/ Perception PollPROCESSINPUT • Key • Scoping Research Design • Research results • Research Informants Secondary Data • Companies results • Records of • Key Informants • Communities • Leading CSR CSR Practices • Networks practices • GovernmentRESOURCE/ • CSR Evolution • Benchmarking tools • Dialogues and • IEC MaterialsMETHODS Analysis • Research tools (i.e. discussions and other • Review of survey, questionnaire, • Resource promotions CSR literature interviews, dialogues, etc.) mobilization • Dialogues • Interviews & • Volunteer effort • National Dialogues WorkshopOUTPUT • CSR Evolution • Position on volunteerism • Partnership • Increased Documentation as context and strategy generation awareness, • Identification • CCP, Incentives & acceptance of new CSR alternative volunteering and level of trends/ cases practice practices • Impact indicators of CCP • Validation of and CSR CSR • Research papers Framework • Project Synthesis papers • Country Paper 25
  25. 25. Research FocusThe study focused on two major areas: volunteerism as a component strategy of BCR and the models andstrategies of quality engagement in BCR.A. Volunteerism as a Mode of Partnership of BCRVolunteerism can mean many different things across cultures and states. Volunteering is an act of exchangeand reciprocity that is likely to have multiple meanings, takes different forms, and is defined by itsenvironment. A UNV background paper prepared for the Expert Group Meeting on Volunteering & SocialDevelopment held in 1999 suggested a framework of voluntary actions with the following definingcharacteristics: • Actions should not be undertaken primarily for financial reward, although reimbursement of expenses and some token payment may be allowed. • Free will is an essential element of voluntary actions. • Actions can occur within or outside formal organizational or institutional settings. • Actions should benefit some individual or group other than just the volunteer himself/herself. • The levels of commitment can vary depending on the person, activity and resource.PBSP distinguished four kinds of volunteering activity delineated according to final outcome or finalpurpose: mutual aid or self-help, philanthropy or formal service delivery, participation or civic engagementand advocacy or campaigning as shown below. Each is described in Table 3.26
  26. 26. EBCR Philippine Country Report Table 3: Characteristics and Kinds of Volunteering ActivitiesCharacteristics of Volunteering Kinds of volunteering activityVolunteering takes different • Mutual aid or self-help plays a primary role in community welfareforms and is defined by its in many parts of the developing world. It is often the mainenvironment. However, there are system employed for social and economic support.key defining characteristics of • Philanthropy or Formal Service Delivery is distinguished fromwhat are deemed voluntary self-help in that the primary recipient of the volunteering is notactions: the member of the group him or herself but an external third • Not taken on primarily for party, though it is acknowledged that philanthropy includes an financial benefit element of self-interest. • Taken on according to an individual’s free will, though • Participation or Civic Engagement refers to the role played by grey areas exist in this individuals in the governance process, from representation on aspect. govt. consultation bodies to user-involvement in local dev’t.Must benefit someone other projects. It is most developed in countries with a strong traditionthan the volunteer, or society at of civic engagement.large, though it is recognized • Advocacy or Campaigning are often instigated by volunteers, alsothat the act brings significant known as activists, specifically targeted to effect legislativebenefit to the volunteer as well. change or other forms of broad sweeping social improvements.The kinds of volunteering activity identified during the Expert’s Group Meeting provide the contexts forengagement that can be formed by other sectors with the business sector. This is especially challengingbecause the characteristics of business activities and goals are often not the same as the characteristicsof volunteerism. Thus, there would be a need for a framework by which the different stakeholders couldobtain the same goals and equitably-shared benefits and risks under the auspices of volunteerism.The EBCR study was expected to help determine the connection between volunteerism and BCR practices. 27
  27. 27. B. The Emerging Models of Business Community RelationsThere has been a lot of debate on the definitions of Corporate Social Responsibility (CSR), CorporateCitizenship (CC) or Business Community Relations (BCR) as all of them reflect in one way or another thediverse policies, methods and processes that the business sector uses in interacting and relating with theother sectors and communities.Philippine business associations agree on these definitions:4 • That CSR is the baseline behavior (i.e., compliance) that companies should demonstrate in society. It embodies the social mission of corporations on top of their economic purpose. • That corporate citizenship is about companies going beyond the expectations of communities, government, and civil society.Underpinning these definitions is the concept that business is responsible for more than profit-making. Because of its inherent strengths, such as resources and technical capability in an increasinglymarket-driven society, the business sector should also be responsible for and contribute to society-building.There are four paradigms of CSR that are implemented in the Philippines:5 1. Corporate-Giving or Philanthropy Corporate-giving or philanthropy is defined as providing resource to intended beneficiaries. Over time, this can develop a dole-out mentality and over-dependence on corporations. To prevent this mindset, corporations have begun to treat corporate-giving or philanthropy as a community or social investment, thereby reframing giving in terms of what the returns to the community or society are. 2. Business Community Relations BCR is the direct involvement of the company in community-based programs either by themselves, in partnership with an NGO/a community association/a local government, or in coalition with other businesses. The partnership approach to development is common in the Philippines. There is the prevalent desire to pool corporate resources to achieve greater impact.4 Taken from a series of Focus Group Discussions on Benchmarking CSR in the Philippines conducted by PBSP.5 Juan Miguel Luz, Corporate Social Responsibility in the Global Community: A View From The Ground: Building PartnershipsFor Development, 2000.28
  28. 28. EBCR Philippine Country Report 3. Business/Industry Practices Business and Industry Practices type of CSR is shown through codes of conduct where “best practices” begin to be viewed as standards for operating businesses. These have become important self-regulating mechanisms and vehicles for corporations to buy into industry-wide practices. 4. CSR as business strategy CSR as business strategy is the new area of development with two modalities: (1) as an alternative delivery mechanism for a public good, and (2) privatization of the public service. This means that businesses can provide the services that government cannot deliver.These paradigms of CSR define the roles and the strategies of business organizations in relation with theother drivers of CSR — the government and civil society — to effectively implement their social responsibilityactions and programs. As BCR is just one of these paradigms, the EBCR study posited that there areemerging models of BCR in the Philippines and that these models present different ways of engaging withthe different sectors involved in BCR.In order to understand the strategies adopted by the stakeholders of BCR, the study looked at the followingareas of research: a. Government Influence on CSR In recognition of the greater role the private sector plays in social development, government has been proactive in encouraging and implementing tri-partite efforts towards development, particularly in the rural areas where the bulk of poverty exists. The presence of a government advocate can at times promote or hinder business-community relations. Some private sector participants allege that the strong state (or government) element promotes a compliant rather than a voluntary environment, which would make participants less innovative. Incentives have been used by government to indirectly influence private enterprise behavior. In the last decade, with the intent of spreading job creation and social development, incentives were offered for businesses to start up in poor regions. The EBCR project looked at government-led, business-oriented partnerships to assess the viability of such engagements. The research looked at how government influences companies 29
  29. 29. to engage in CSR through incentives. Given that incentives and similar instruments are dependent on the government’s perception of businesses, in the overall context of this project, there might be a need to assess the awareness of government offices about CSR and to identify the most effective government action that promotes CSR behavior. b. The Community and Civil Society: Stakeholder or Beneficiary? Companies often define their communities based on their operation’s areas of immediate impact, i.e., host communities of plants or headquarters, sectors in line with the business, etc. These are often done through community relations programs or personnel specifically assigned for the task. However, despite cases of best practices in this area, the level of participation in communities and within the company in general has been argued to not be that extensive. In this arrangement, the beneficiary approach seems to be most prevalent, and in some cases has proven to be detrimental to both parties as the level of dependence escalates. This project challenged the traditional perception of communities by business by looking at emerging community models, such as treating the community as a “stakeholder.” With PBSP, the project also looked at ways of improving traditional corporate-community engagements. In order to promote partnerships between business and communities, it was found imperative that a two- pronged approach be taken to influence not only corporate but also community behavior. c. Organized Business Involvement: PBSP as Model of CSR/CC in Developing Countries Business involvement in the development of communities in particular and society as a whole started very early in the Philippines. The colorful evolution of this corporate social responsibility is summarized in the section Findings Based on Review of Literature. Organized business involvement can be considered to have begun about thirty years ago. In December 1970, in what was known by the top executives of the 50 biggest corporations in the country as “a divine conspiracy for development”, the Philippine Business for Social Progress was formed. Now thirty-three years in existence, PBSP continues its mission of championing the social development cause in the business sector. Held together by a purely voluntary working board of 21 CEOs and a professional social development staff, the organization has gone through various stages of work — from that of fumbling around in the dark (“What do we know about social development?”) to operating a highly professional social development NGO that integrates business goals with social goals.30
  30. 30. EBCR Philippine Country ReportThe research also looked at the evolution of CSR in the Philippines in order to provide inputto other UNVs’ drivers/enabling mechanisms they can look for or develop to promote corporatecitizenship in their countries. The project focused on PBSP’s Center for Corporate Citizenship as adeveloper and promoter of corporate citizenship from a developing country’s perspective. Thisstudy includes a presentation of the learnings distilled from PBSP in its 33 years of life. 31
  31. 31. 32
  32. 32. EBCR Philippine Country Report 33
  33. 33. 34
  34. 34. EBCR Philippine Country Report II. ANALYSIS AND FINDINGST he data and information about EBCR in the Philippines were drawn from two major research sources. The first source was the extensive literature on the evolution and development of BCRin the country. The second source was the findings of the surveys, case studies, and action researchconducted by PBSP in collaboration with UNV and New Academy.A. BUSINESS-COMMUNITY RELATIONS IN THE PHILIPPINES: A REVIEW OFLITERATUREThe application of CSR in the Philippines is well documented. This desk review shows the evolution of BCRin the Philippines, the drivers of BCR, the emerging models of BCR and the strategies adopted to improvethe quality of engagement with BCR stakeholders.1. Emergence of BCR in the PhilippinesThe involvement of business in social activities can be traced to the time when it was the practice ofwealthy families to give donations to the Church and charitable institutions. (Read the country’s profilein Annex 1: Country Background).From the 1960s to the 1990s, corporate philanthropy underwent a process of transformation. The stronginfluence of the Roman Catholic Church on personal, state, and economic affairs paved the way forbusiness altruism. The practice of corporate social responsibility emerged during the late 60s as abusiness response to growing social unrest. Amidst activism in the 60s and the 70s, to the concern for theenvironment in the 80s and 90s, corporate philanthropy took on a new meaning. From then on, businessesbecame proactively involved not only in the economic affairs but also in the socio-political affairs of thesociety, mainly through their CSR programs and efforts. 35
  35. 35. Presented in the next pages is a summary of Velasco’s (1996) study of corporate philanthropy in thePhilippines. It describes briefly the periods that Philippine corporate philanthropy underwent and thevarious socio-political events that affected it.6The First Decade (1960s): The Decade of DonationsSocial involvement of business during this period was very simple and uncomplicated. Usually, privatecompanies provided charitable institutions with donations in kind or in cash.Social inequity was beginning to take its toll during this period. The top 5% of families were receiving anannual income 33 times the average of those in the lower 20%. As a result, social unrest erupted.Discontent in the countryside and in factories led to massive protest demonstrations that came to beknown as the riotous period of “the First Quarter Storm.” As witnesses to demonstrations within thefinancial district where they worked, progressive business leaders reassessed the role they played in thecountry’s development. The conclusion was while businesses had been supporting charitable activities ina sporadic, fragmented and uncoordinated basis, there was a growing need for organized, professional andcontinuing assistance.The Second Decade (1970): The Decade of OrganizationInspired by Dividendo Voluntario para la Comunidad, a business association in Venezuela, several businessleaders (among whom were Jose Soriano of San Miguel Corporation, Sixto K. Roxas of the EconomicDevelopment Foundation, and Howard Dee of the Association for Social Action) organized the PhilippineBusiness for Social Progress (PBSP). PBSP aimed to develop a method of attacking national ills “in a waywhich parallels the vigor and industry with which private enterprises tackled the challenge of economicdevelopment in the country.” Support for the organization came from annual voluntary contributionsfrom member companies who pledged to commit 1% of their pre-tax net profits. Of this amount, 60%was channeled through PBSP to finance development projects for the member companies while the restwas retained by the company for its own programs.PBSP’s primary activities during this period included capacity building of its staff and partner NGOs,developing a focused grant-making program, and maintaining the interest and commitment of its membercompanies.Aside from PBSP, the Bishops-Businessmen’s Conference (BBC) and the Association of Foundations (AF)were founded in 1971 and 1972, respectively. BBC served as the venue for the Church and the business6 Ma. Gisela T. Velasco, Corporate Philanthropy in Asia: The Philippine Case, 1996.36
  36. 36. EBCR Philippine Country Reportsector to address their common concern for the poor. The AF, on the other hand, was the country’sfirst network of foundations. PBSP, BBC and AF operated independently but shared a common role inpromoting corporate social responsibility.The Third Decade (1980s): The Decade of InvolvementThe early part of the decade saw the Philippine economy shrinking in size and foreign investments pullingout. This situation was triggered by the worsening debt crisis, the political turmoil after Benigno Aquino’sassassination and insurgency in wider areas of the country. In the midst of this crisis, communities turnedto the companies near them to provide much needed support. Many companies responded by providingservices to the communities. This practice evolved what is now known as Community Relations or Comrel.The initial Comrel efforts were largely welfare-oriented responses to a crisis. Companies viewed Comrel asa means of improving the economic conditions of their communities in order to promote peaceful businessoperations. Companies began to expand their notion of stakeholders — from shareholders to employees toexternal publics such as the community — and redefined the meaning of their responsibilities.In January 1993, PBSP conducted a survey of 110 companies known to have Comrel programs. There were55 respondents. The survey findings were: - Comrel was practiced by companies regardless of size, sector or location - The CEOs were the drivers of Comrel - Companies with plant-based operations or geographic considerations implement Comrel with wider target base and broader concerns - Comrel was provided with limited manpower and was managed on a part-time basis under the Human Resource Departments - Comrel issues include the need to translate social policies into coherent programs and to secure greater support from internal constituents such as employees and shareholders.Comrel entailed the building of new types of relationship with the public. It prompted the companies tobalance their interest for profit with community concerns. Finding the right fit was the challenge and thekey to success. 37
  37. 37. The Fourth Decade (1990s): The Decade of InstitutionalizationCorporate Citizenship emerged during this period. CC suggested that “a corporation that derives profitfrom society has duties and responsibilities that must contribute to society’s well-being.” CC encompasseda variety of initiatives that businessmen were beginning to take part in, from corporate giving to Comrel,policy formulation and networking.Acknowledging the important role of CEOs in thinking through and trying to resolve the problems thatbeset the country, PBSP created the Center for Corporate Citizenship (CCC) in 1992. CCC addressed itselfto the growing demands of an increasingly complex society or community as well as profit-making needs.The Center served as a venue where CEOs discussed long-term issues on environment, education,local governance, and countryside development. Here, CEOs identified strategic social investmentsthat business could undertake – “strategic” and “social” in order to focus on what would give thegreatest returns to society given the limited corporate resources; “investments” as a way of thinkingabout more permanent interventions rather than mere ad hoc reactionary giving.The Fifth Decade (2000s): The Decade of Continuous Improvement7On its 30th anniversary, PBSP reconstituted the mandate of its CCC to include conducting researchand test programs and setting up management frameworks that would enable companies to carry outtheir CSR properly and provide them with the means for continuous improvement.Recognizing the country as a seriously fragmented society, divided economically and socially and where50% are poor and disempowered, PBSP renewed its focus on poverty alleviation. This time, it pushed forthe participation of corporate citizens in improving access to basic services, education, and credit, anddeveloping new skills for the workforce to help them improve their lives.It was within this period where PBSP launched the “Benchmarking Corporate Citizenship” and the “CorporateVolunteer Program: Linking Worlds.” The first promotes ethically, socially, and environmentally responsiblebusiness as exemplified by the best practices of its member companies. The second program, on the otherhand, encourages companies to mainstream volunteerism into their regular functions by providing themwith support services. These services include matching companies with volunteering opportunities,developing viable models in corporate volunteering, assisting companies in adopting a systematic approachto employee volunteering, facilitating volunteer engagements, and giving due recognition to outstandingemployee volunteer programs and projects.7 PBSP Annual Report 2002.38
  38. 38. EBCR Philippine Country ReportThe evolution of BCR in the Philippines manifests the great contribution of PBSP in CSR. Currently,PBSP is the largest grant-making business organization in the Philippines. In 33 years since itventured into social development, PBSP has mobilized and invested over P5 billion pesos in socialdevelopment programs from membership contributions and funds from Official Development Assistance(ODA). Working with over a thousand partner organizations worldwide, it has trained NGO workersand grassroots leaders who serve the needs of close to two million marginalized Filipinos.2. Drivers of BCRLuz (2000) described the drivers for BCR as external and internal. The external drivers include: (1)government- its regulation and laws; (2) increasing demand of society for business to alter behavior, asarticulated by the civil society; and (3) market forces. The internal drivers are: (1) individual managers’behavior; (2) employees’ participation; and (3) BCR as strategy for better operations.8a. Societal Demand and Market ForcesThe Philippines’ poor growth performance due to economic mismanagement and political instabilityare seen as the main causes of poverty. There is a wide gap in income distribution between the rich and thepoor who has limited access to basic social services. This gap is wider in Southern Philippines, whereabject poverty is a major reason for strife between Christians and Muslims. Infrastructure is still a majordeficiency in several areas of the country and contributes to the high cost of business and development.Political instability, even after the “EDSA 2” revolt continues to harm the image of the country in theworld. National security has been threatened as outlawed political organizations have exposed long-standing operations in the country.It is within this context that corporations recognize the need for greater CSR approaches and strategies.According to two prominent business leaders in the Philippines: “Corporate Citizenship is not an option but an obligation to humanize the free market system and give it a measure of social responsibility. Helping the poor help themselves is the most effective, sustainable approach to reducing poverty, releasing human potential and achieving better socio-economic equity.” — Andres Soriano III98 Juan Miguel Luz, Corporate Social Responsibility in the Global Community: A View From The Ground: Building Partnerships ForDevelopment, 2000.9 A Quarter of a Century in Social Development, Philippine Business for Social Progress, 1995. 39
  39. 39. “The members of the corporate sector possess the resources and the management expertise and organization to respond to the challenge. They will likely benefit from the windfall of sustained economic growth if the gap between the rich and the poor is narrowed. It is their businesses that will make use of the country’s larger consumer base and its greater disposable income. If the corporate sector was conscious of its social obligations and the benefits it would reap by addressing our country’s social issues, it can be a major force of development.” — Washington Sycip10Market forces have become a major driver, however, in the past fifteen years or so and with it the ideaof best practices was tied to distinctly CSR behavior. From the idea of best practices arose the notionof benchmarks that could be viewed as “collective best practices” impacting industry practices. Withthe entry of societal demand as a driver for CSR behavior, the envelope has been expanded and withit the necessary thinking of CSR as strategy.11b. Government as External Agent of BCRAccording to Luz, the Philippine government frames the policy environment in which businesses conductthemselves. Although Philippine companies engaged in BCR have had different motivations fordoing so, the Philippine BCR experience shows that companies engage with government whetherthey intend to or not. This is because both national and local governments design a number ofdevelopment programs, usually focused on special interest groups, wherein the involvement of theprivate sector should be an integral component because of its capacity to sponsor or serve as fundingsource.It is clear, however, that most of these programs look at the private sector either as resource provider or aspotential violator not only of laws but of community and individual rights. For those companies withpurely profit motives, government becomes the most appropriate intermediary because of its moral andlegal authority. Even in one case where business dealt directly with the community (for profit), governmentwas supporting the engagement through the community, albeit from backstage.10 Our Legacy, Philippine Business for Social Progress, 2000.11 Juan Miguel Luz, Corporate Social Responsibility in the Global Community: A View From The Ground: Building Partnerships ForDevelopment, 2000.40
  40. 40. EBCR Philippine Country ReportWhere corporations are more developmental, government not only provides the enabling policyenvironment but also the capability for both business and community to engage. In these casesgovernment provides the environment for companies to seek on their own the means to deepen theirrelationship with communities.The government promotes CSR because it is mandated to improve the living conditions of theconstituents. The government taps or partners with businesses to deliver development programs thataddress community needs. The government issues policies and regulations to encourage businessesto do CSR activities and also to compel them to protect communities (i.e., environmental laws).Incentives have been used by the government to influence business behavior toward activities thatare deemed to have positive economic benefits. Government initiatives are directed at incomegeneration, enterprise development, or environmental protection.In summary, the government’s major driver for facilitating or supporting these CSR engagements is itsmandate to serve the primary constituency, the community, and raise them out of poverty. The additionalresources obtained from the private sector allow the government to more effectively carry out its mandate.Additional revenue and economic activity are a greater driver for the provincial, regional and nationalgovernments.c. Societal Demand as Articulated by Civil Society as Driver of BCRCivil society started as a watchdog of government performance in public service. As local, regional,and national governments failed to deliver appropriate services in certain areas, many civil societyorganizations launched programs as alternative solutions. Today, many NGOs in the Philippines areinvolved in a wide range of public service delivery — health, education, micro-enterprises, cooperativesdevelopment, etc. As civil society organizations have institutionalized themselves into non-profitorganizations, companies have recognized that they too can be involved in similar areas where theycan share not only their financial resources but also their managerial expertise. Thus evolved theirhigher level of engagement in CSR.A major consideration for communities in engaging in CSR is how drastically the activities willchange their way of lives. Community people easily buy into activities that will improve theirsocial conditions and their communities such as the establishment of education and health centers.Businesses are moved to engage with communities as an aspect of reputation management andcorporate citizenship. As communities become more self-reliant, the cost of further engagementdecreases over time. This means that as communities become more empowered, businesseswould be able to minimize costly philanthropic activities and engage with communities on morebusiness-oriented terms. 41
  41. 41. d. Corporate Interests as DriversAccording to Luz, BCR is internally driven by individual managerial behavior — that BCR is an expressionof an “enlightened self interest.” Increasingly, however, leadership companies have seen the importance ofoperational efficiencies as the driver for BCR and very few have taken this further to the level of strategy.Luz added that an understanding of what drives change in BCR behavior can be derived on at least threelevels: • If regulation were the primary driver, then the BCR effort is significant only up to the level of compliance – paying the mandated minimum wages, paying the right taxes, complying with the letter of the law. • If individual behavior were the driver, then BCR conforms with the individual’s view of what constitutes integrity as far as responsible management is concerned. • In most cases and in most companies, external demands are the driver. Reaction or response about this aspect has been limited. Over time, however, prescient business leaders have looked to the internal drivers as a way to take control over such external factors and to be proactive in their approach to BCR.1212 Ibid.42
  42. 42. EBCR Philippine Country Report3. Emerging Models of BCRThere are three emerging models of BCR in the Philippines: Systems Thinking Model, Business ExcellenceModel and Business Case Model.a. Systems Thinking ModelAs an expression of corporate social responsibility, business-community relations has been a “professional”practice in the Philippines since the mid-1980s (although some companies with company towns havebeen known to do it since the turn of the 20th century mostly to take care of its personnel).In the early 1990s, a call for industry community relations standards led to the formation of theNational League of Community Relations Practitioners (NLCRP).13 In 1997, PBSP and NLCRP produceda systematic framework of “comrel” practice that takes into account the unique role of “comrel”practitioners as mediators between their companies and communities. It was the first attempt toprofessionalize the practice through the installation of systems thinking. The developed framework(see Figure 4) takes both inward (i.e., management) and outward (i.e. community) perspectives. Theentries located within the diamond denote the higher option that “comrel” practitioners can take andthose pointing outward as the minor options that can be taken.The major limitation of this model is the implication that only management can decide how it canvalue a community, and that “comrel” practitioners must find a way for their activities to be alignedto business in order to ensure sustainable support. It does not seek to explain how a community isvalued by a company, or what influences business strategy. More importantly, it fails to show what,how and who influences business strategy, such as how external players can stipulate necessaryelements of an operation, thereby directly influencing business strategy.13 Juan Miguel Luz, A Handbook for Community Relations Managers, Philippine Business for Social Progress, 1997. 43
  43. 43. Figure 4: Framework of Community Relations vs. Communities and Company Management14 PART of Business Strategy NOT Part of Business Strategy Comrel unit as an “Agent” “Personal emissary”Relatively Autonomous Strongly Aligned for the company Comrel unit serves to carry out management’s Organizational Relationship wishes Creates new Comrel vehicle role for comrel for a new vision for within mainline business the company Innovator Comrel to be Pathfinder/ (New assumptions Breaking new ground to the business) (New models, new Comrel theories) stretches Business so far from mainline Ad hoc/ (potential conflicts with Reactionary comrel mainliners) PART of Business Strategy NOT Part of Business Strategy Business considerations Treated as a special overshadow Comrel project (could be Stakeholder Relationship with the Community considerations isolated from Major mainstream) Non-business Access to considerations important resources + mutual benefit for company as a whole Stakeholder/Public Favorable results make community a major Ad hoc program/projects NOT Major public (maybe important to individuals but not to company as Business an organization) overrides community-relations 14 Juan Miguel Luz, A Handbook for Community Relations Managers, Philippine Business for Social Progress, 1997. 44
  44. 44. EBCR Philippine Country Reportb. Business Excellence ModelRealizing that “comrel” is actually part of a larger stakeholder engagement practice by business, severalmodels have surfaced that attempt to put a systematic face on this aspect. The European Foundation forQuality Management (EFQM) and British Quality Foundation (BQF) Business Excellence Model (See Figure5: The Business Excellence Model) integrates a company’s impact on society as a key element of businessprocess, and it is a widely recognized quality standard. It is consistent with quality principles ofenvironmental and social performance - criteria springing from the concept of Triple Bottom Line.15 Figure 5: The Business Excellence Model Leadership People Processes People Business Management Satisfaction Results Policy & Customer Strategy Satisfaction Impact on Resources Society 3 Enablers 43 Results 4Business ResultsThe Business Excellence Model is a tangible framework for assessing the degree of excellence in anorganization. It contains nine elements (referents) identified as key components of business excellenceand served as basis for giving quality awards in Europe. In the Philippines, such model is used to awardthose who comply with industry standards such as environmental standards, ISO 9001, etc.15 Triple Bottom Line is the sustainability concept (i.e., economic profitability, social equity and environmental sustainability)promoted by SustainAbility and John Elkington. 45
  45. 45. Business Excellence Model Process Stage Quality Principles referentsEnablers Leadership Policy & Issue Identification Core corporate values & Strategy policies Completeness People Management Stakeholder Resources consultation Inclusiveness Dialogue Processes Management & Information systems Integration & Embeddedness EvolutionResults People Satisfaction Measurement Customer Satisfaction Quantitative & qualitative Impact on Society Comparability Business results Differentiation Innovation & Developing action Learning plans Continuous improvement Business Results Reporting External verificationThe limitation of the model is that it encourages compartmentalized thinking,16 even though themodel was meant to be integrative. “Compartmentalization” is still a prevalent practice where structuredorganizations are necessary in order for business to actually function. As more and more aspects of businesseither are sourced from or become exposed to communities, it becomes apparent that stakeholderengagement is something that must be integrated into several aspects of business. This means that as abusiness function, community relations can be a tool in various aspects of business operations, regardlessof sector or industry.16 Business in the Community, Business in Society: Assessing the Impact, 1998. p. 2246
  46. 46. EBCR Philippine Country Reportc. The Business Case ModelBusinesses in post-World War II Philippines operated under the vacillating influence of both laissez-faire market-capitalism and the welfare state.17 Social responsibility was heavily influenced by otherinstitutions as well, such as the Roman Catholic Church and the extended family. As such, the BCRorientation of businesses and governments were in line with capitalist and welfare state paradigms.These CSR paradigms placed greater emphasis on impacts to society and placed little relevance to impactson business or the business case. Surprisingly, the actual improvements of these activities to society hadnot been fully explored. This deficiency of strategy and accountability of all stakeholders involved hasentrenched a view in business that social responsibility is, at times, an expendable cost center. Theimpetus for business activity is results, whereas most other stakeholders such as government and civilsociety are more driven by the motivation behind those results. Strategies that accommodate both driverscould be more effective in defining social responsibility roles.As the margins of engagement move from mere regulatory compliance to a highly proactive developmentalstance, business is also in a position to demand from other sectors delineation in roles. One of the keyfactors in community development that meshes well with the benefits-orientation of business is theasset-based community development (ABCD) approach. The key feature of the ABCD approach is thatcommunities drive the process of development through the identification and mobilization of often-unrecognized social assets. The objection its developers have over needs-based development (which is theprevalent practice of governments, civil society and business) is that needs-based development createsdependency — a donor-benefactor relationship — between developers and impoverished communities. Inessence, the ABCD approach inherently looks at communities as stakeholders and partners for their owndevelopment where corporate-community partnerships can be forged. With this approach, resource-strapped government and dependency-wary business can engage communities knowing that it would bebeneficial to all involved.The integral power of government lies in its ability to wield prescriptive policies that no business cansuccessfully ignore in the long term. These prescriptions provide an environmental framework for businessesto act in a community, for socially responsible corporate behavior. Many contest these regulatory optionsas contrary to the voluntary nature of corporate citizenship, thus minimizing the effectiveness of corporatecitizenship as a competitive strategy. However, regulation is still one of the most effective options grantedto communities and civil society in the developing world for the universal implementation of appropriatedevelopment practices.17 David Logan, Global Corporate Citizenship-Rationale and Strategies, 1997. 47
  47. 47. Previously such regulatory sanctions were considered as additional costs to business in developingcountries. However, as corporate citizenship becomes a standard for competitiveness in developedcountries, it becomes clear that it is also within the government’s mandate to promote and ensureresponsible business behavior in the country (ergo, citizenship). For example, the United Kingdom isthe first country in the world that has a Department of Corporate Social Responsibility lodged in itsMinistry of Trade & Industry.As the world of business grapples with issues of sustainability and how it could possibly impact thebottom line, government and civil society are developing means of quantifying impacts that previouslyhad only been noted as “smiles in glossy pictures.” SustainAbility has pioneered the concept of the TripleBottom Line, where business does not only have an economic bottom line, but also social and environmentalbottom lines. This has precipitated the concept of the “business case” for social involvement and as amovement it is gaining momentum worldwide, as exemplified by the UN’s Global Compact. This trendprovides the direction for governments and civil society to work with the private sector. (It is not thepurpose of this section to provide a comprehensive guide for developments in corporate citizenship, butonly to highlight specific developments that directly relate with and affect the cases in focus.)As the corporate citizenship movement progresses alongside enhanced community development andglobalization, it is safe to assume that business-community relations can become equitable partnershipsthrough changes not only within business, but also within the community, government and civil society.4. Quality of Stakeholders EngagementBesides the emerging models of BCR, there are two other models of engaging with BCR stakeholders.These two models are the partnership strategy model and the stakeholders relations model.a. Partnership Strategy ModelThe partnership strategy is considered the most “evolved” paradigm for engagement as it is founded onmutual respect, understanding and agreement as well as equitable (as opposed to equal) sharing of benefitsand risks among all players, including business. It stands as the most effective means of ensuringdevelopment since it encourages ownership and commitment among all partners. In an environmentwhere these aspects are not present and cannot be introduced (for instance, where there are unresolvedideological conflicts), a partnership may not immediately ensue but can develop and emerge once conflicts48
  48. 48. EBCR Philippine Country Reportare resolved. In an environment where these aspects are lacking but can be acquired, building thecapacities of all potential partners to equitably share risks becomes part of the partnership strategy.Institutional partnerships claim broad gains. However, specific gains that would serve as impetus forbusiness to be involved are often identified as merely “the potential to earn alternative attractivereturns on their investment.”18 It is left solely to business to identify gains from the partnership,but, more often than not, business is not expected to seek returns in the quantifiable manner that itis used to.Multi-sectoral, also known as tri-sectoral, partnerships in development often refer to the confluencebetween business, the public sector and civil society, and are designed to solve particular problems. Thisis also known as a convergence of primary stakes. The chart below (Figure 6: Tripartite Partnership) showsa non-exhaustive list of specific kinds of stakeholders within these groupings.19 Figure 6: Tripartite Partnership Tripartite Partnerships* * Symbol taken from the PPPUE diagram on partnerships, stakeholder types from Guiding Hand Government Business National Government, Federal States, National and International Formal & Municipalities, Educational/ Informal Enterprises, Business Academic Institutions, International Associations, Enterprise Dev’t. agencies, National & Local Agencies, Financial Institutions, Governments, Public Sector services, International companies, Joint stock QUANGOS (quasi-autonomous non- companies, National Companies, governmental organizations SMMEs (Small, Medium & Micro Enterprises) Civil Society Communities, Research Centres, Educational/ Academic Institutions, Campaign groups, Community- based organizations, Donor agencies, Labor organizations, NGOs, Private voluntary organizations, Religious institutions18 Public-Private Partnerships for the Urban Environment (PPPUE) Facility Brochure, 200019 Tennyson, R. and Wilde, L. THE GUIDING HAND: Brokering partnerships for sustainable development. United Nations StaffCollege and The Prince of Wales Business Leaders Forum, 2000. Symbol from the PPPUE Facility. 49