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  • 1. CCCD Centrum für Corporate Citizenship Deutschland Corporate Citizenship in Germany and a Transatlantic Comparison with the USA Results of a CCCD Survey ata
  • 2. 2 CCCD – the Center for Corporate Citizenship Ger many is a non-profit organisation at the inter face between business, academia, and politics. In cooperation with leading companies, both domestic and foreign, acade- mic institutions and civil society organisations, CCCD acts as a think tank and competence centre, providing a platform for dialogue; acting as cata- lyst and host. In this capacity, the CCCD arranges forums for exchange between corpo- rate citizens, business, academia, politics and civil society, supplies and carries out applied research, facilitates learning processes through deba- te and skilling opportunities, and supports cooperation between businesses and partners from civil society, academia, and/or politics. Using workshops, publications and public events, CCCD also acts as a dri- ving force for the corporate citizenship debate in Germany and for the practical efforts by businesses taking an active role in society. CCCD is the German partner of the Center for Corporate Citizenship at Boston College, USA, as well as a partner of Business in the Community, UK. www.cccdeutschland.org
  • 3. 3 Inhalt I. Preliminar y remarks 5 II. Key Findings 7 III. Introduction 9 • Key issues and objective of the sur vey IV. Methodology approach, specifics of random sampling, execution of the sur vey 11 V. Empirical findings from the German sur vey and transatlantic comparison of selected issues 14 • An unequivocal “ Yes” to corporate citizenship 14 • Types of corporate citizenship 15 • Deploying companies’ material and human resources for corporate volunteering 16 • Preferred areas for corporate citizenship 17 • Involving partners in corporate citizenship 18 • Corporate Citizenship with a clear local emphasis 20 • Investment in corporate citizenship 21 • Corporate and community objectives at the focus of commitment 22 • Happening by chance or strategic business planning of corporate citizenship measures 25 Corporate culture as a guideline Responsibility for corporate citizenship in the company Corporate Citizenship no PR-tool • Socio-political attitudes of companies with regard to corporate citizenship 28 Positive reinforcement factors for corporate citizenship Factors with a limiting effect on corporate citizenship • Issues and areas for corporate citizenship 34 • Investing in the future of corporate citizenship 36 VI. Summar y of results 37
  • 4. 4 Views and Comments: “This is exactly what we were hoping for when we talked about the idea of doing a sur vey on corporate citizenship on an international level: interesting comparative findings on the differences and similarities. Both understanding and practice var y considerably in different national settings. Therefore the global idea of corporate citizenship needs differentiated, culture sensitive grounding. We hope CCCD’s survey on corporate citizenship in Germany to be the first one of a whole series, to be conducted in different parts of the world which will enable us to develop a truly global understanding of the why and the how of corporate citi- zenship.” (Prof. Bradley K. Googins, Executive Director, The Center for Corporate Citizenship at Boston College) “Responsible activities by businesses need to be geared towards meeting both the society ’s needs and shareholder interests, which implies following the business strategy. This makes the key question for issues and projects: what benefits the business? What benefits society? Changing over from philanthropic individual measures to a strategic overall concept for corporate citizenship is a learning cur ve we have gone through as well. On the basis of our corporate values and business strategy we have revised previous activities and put in place new long-term projects, based on our core competences and the needs of society ”. (Jürgen W. Cuno, Director, Government & External Affairs, Deutsche BP) “ Whenever politics expects companies to show social involvement, there is a suspicion that companies are supposed to act as stopgaps for a state retreating from welfare state respon- sibilities. This is not the case. Corporate citizenship brings a specific value of its own to both the community and the economy. In addition, it is a cornerstone for a new social compact between citizens, the state and business, resting primarily on cooperation and increased participation. (Dr. Michael Bürsch, Member of the German Parliament) “A global and committed company always encounters special circumstances in different countries. To be successful, in business as in civic engagement, one has to forge links bet- ween different corporate cultures as well as cultures of involvement. A US business active in Germany will always build bridges between different economic and community commit- ment approaches. A comparative study, revealing both the common ground and the diffe- rences, is most helpful in this respect.” (Hans-Peter Teufers, Director Public Affairs Central & Eastern Europe UPS) “Corporate citizenship and corporate social responsibility have become important issues for the future. But in Germany and elsewhere, an empirical analysis based on sound methodo- logy is only just beginning. And yet, decision-makers in business, politics and society need this knowledge… and the present study will provide a useful source of information to all of the above – and will hopefully be followed by responsible action”. (Prof. Manfred Güllner, Managing Director, forsa. Gesellschaft für Sozialforschung und sta- tistische Analysen)
  • 5. 5 I. Preliminary Remarks The study on hand “Corporate Citizenship in Ger- poll, which are relevant for the German con- many and a Transatlantic Comparison with the text, have been put into German and integra- USA” surveys corporate citizenship involving com- ted into the German sur vey, paying particular panies in Germany. For the first time, the data attention to the specifics of the German situa- collected will be compared with similar findings tion. Taking into account the diverse political, from the US. Accordingly, some of the points economic, and cultural characteristics of com- these two cultures of social involvement share p a n i e s i n b o t h c o u n t r i e s, t h e d a t a p e r m i t s - and some of their differences - can be iden- instructive interpretation of selected dimensi- tified and analysed, which gives German busi- ons of corporate citizenship in Germany and nesses an opportunity to place their own prac- the US. tice of community commitment in an interna- tional context and, if necessar y, readjust it. The Germany-related results of the final report as submitted are based in part on comments The Study contains fundamental results from an on the report made by Professor Dr. Dr. Seba- empirical sur vey on the issue of “ Corporate Citi- stian Braun and Mark Kukuk of the Paderborn zenship in Germany ”, conducted between Sep- University research centre on social involvement. tember and November 2006. The poll formed The sections focusing on the transatlantic com- part of a research project involving several of parison are based in part on the results elabo- the cooperation partners of CCCD, to whom we rated by Dr. Karin Lenhart. would like to express our thanks for their sup- port and participation. Dr. Frank W. Heuberger CCCD Deutsche BP AG acted as a generous principal sponsor, and UPS supported the evaluation and publication of the study results. The preparato- r y work, including drawing up the German que- stionnaire, was done by CCCD in cooperation with the Paderborn University research centre on social involvement. Forsa undertook nation- wide and cross-sector polling of businesses, u s i n g c o m p u t e r- a i d e d t e l e - i n t e r v i e w s ( C AT I system). For the first time, thanks to the partnership bet- ween CCCD and the Center for Corporate Citi- zenship at Boston College, USA, reference could be made in individual subject areas, to the study 1 The State of Corporate Citizenship in the U.S. Business Per- “The State of Corporate Citizenship in the US ”, spectives in 2005. The Center for Corporate Citizenship at conducted in 2005 by the Center and the US Boston College. Boston. 2005. Note: The German text uses the gender-specific masculine pronoun. This is simply to facilitate Chamber of Commerce, allowing a direct com- legibility and reading comprehension; the content addresses parison of results. Those item batteries of the both men and women equally.
  • 6. 6 Introductor y remarks for the English more attractive for the US-American reader to com- pare individual results and interpretations from edition both countries and to contrast these with his or The English-language edition of the sur vey on Cor- her own experience in this area. porate Citizenship in Germany and the USA is a first attempt at a quantity-based identification and Despite the many similarities in some areas of Cor- analysis of central elements of the social commit- porate Citizenship in Germany and the US, there ment shown by companies which are either based are also amazing differences in others. In part, in Germany or which are transnational companies, these are due to different entrepreneurial traditi- either manufacturing or selling their goods or ser- ons in the two countries, but primarily they reflect vices in Germany. a historical and cultural development which made them set different priorities in fields such as health The results of the sur vey afford the English-langua- care, combating poverty, disaster relief, or exten- ge reader unparalleled insight into the communi- ding global trade. For both countries these data ty commitment of businesses operating in the Ger- will ask in the medium-term whether more inten- man economic environment. The CCCD had the sive Corporate Citizenship will mean that the rules opportunity to refer to comparative material from of business as a whole will be rewritten. the 2005 study “ The State of Corporate Citizen- ship” conducted by the Center for Corporate Citi- Dr. Frank W. Heuberger zenship at Boston College, which makes it even CCCD
  • 7. 7 II. Key Findings Irrespective of their size, companies in In Germany, only 40 per cent of businesses, irre- Ger many profess their social responsibility. spective of company size, expect their com- Almost all the companies polled, 96 per cent mitment to yield any positive economic result. exhibit some kind of corporate citizenship. In the US, 63 per cent of all enterprises and 84 per cent of large enterprises, are convinced that their civic involvement will have an imme- In a regional context, gif ts of both money diate and positive effect on their business acti- and in kind are typical of the corporate citi- vities zenship displayed by Ger man companies. There is also widespread support among the staff for voluntar y activities and the provision of Only 16 per cent of large-scale German such ser vices typifies German corporate volun- companies interlink corporate citizenship with teering. The larger the company, and the more marketing and sales activities. internationally active it is, the broader the range Instead, traditional PR tools such as press state- of its commitment. ments, homepages, or customer newsletters are widely used to inform about the compa- nies ’ role in public life. More than three businesses out of four consider corporate citizenship par t of the image they have of themselves, and par t of In both Ger many and the US, enterprises their corporate culture. Still, the majority of are strongly opposed in equal measure to Ger man businesses have not chosen to be any regulator y inter ference in their enga- corporate citizens on their own initiative. gement. Fewer than 40 per cent of the companies que- Only 3 per cent of businesses regard legal pro- stioned are actively searching for areas in which visions in Germany as positive reinforcement, to become active and engaged. Even fewer whereas in the US 14 per cent see their com- businesses set measurable targets. mitment influenced by such provisions. Most Ger man companies are still – unli- Where the quality of corporate citizenship ke those in the US – far removed from an inclu- measures adopted is concerned, German sive concept which would make corporate companies are clearly more self-critical than citizenship an integral par t of the corpora- their American counterpar ts. te strategy, integrated into the companies’ Two-thirds of respondents (66 per cent) in Ger- core business and competencies. many state that corporate citizenship is con- This is particularly true for small and medium- sidered important in principle though it is not sized enterprises. actually implemented consistently, but only 47 per cent of American businesses share this view. Unlike US American companies, the majo- rity of German businesses are not convin- More than one third (39 per cent) of com- ced that corporate citizenship can make any panies in Ger many assume their corporate measurable contribution to their economic citizenship has no relevance to customer satis- success. faction.
  • 8. 8 Among American companies, this figure is just Surprisingly, exactly the opposite occurs when 11 per cent. Virtually half the German com- company size is taken into account. The lar- panies (48 per cent) consider that corporate ger the company in Germany, the more fre- citizenship is not a factor in attracting and retai- quently lack of resources is cited, while in the ning staff, while only 15 per cent of US com- US it is the opposite case. panies dispute this. More than 41 per cent of Ger man com- According to the majority of businesses panies do not work with a par tner in their cor- on both sides of the Atlantic by far the most porate citizenship. serious obstacle to stronger civic involvement That means they forgo the chance of benefi- is a lack of resources (US: 54 per cent; Ger- ting from experience made in other sectors of many: 48 per cent). society for their corporate citizenship measures.
  • 9. 9 III. Introduction The debate on corporate citizenship is driven t i c a l o b j e c t i v e s. A g a i n s t t h i s b a c k d r o p, t h e by a view of the company as a good corpora- “altruistic motivation” of well-off individual entre- te citizen, who is or should be, actively invol- p r e n e u r s d o e s n o t m a t t e r v e r y m u c h, u n l i ke ved in resolving social issues. achieving a win-win strategy. Expectations cen- tre on a congruence of social and entrepre- This involves exclusively those corporate activi- neurial interests, requiring a readjustment in the ties which might contribute to the common relationship between business, the state, and good, irrespective of any assessment of inter- civil society to provide the launch pad for a nal company processes. These activities inclu- new social compact. de all one-off or permanent volunteer ser vices intended to benefit society at the local, regio- nal, national, or global level, which are outsi- Key Issues and Objectives of the Sur vey de the genuine business activities of the com- pany. Basically, therefore, corporate citizenship The object of the sur vey is an empirical analy- means company investment in the social or sis of entrepreneurially and socially-oriented cor- natural environment which exceeds its normal porate citizenship in Germany. The main que- business sphere. stion asked is: how and to what extent do Ger- man companies commit to public concerns, Corporate community commitment is recogni- going beyond their immediate business activi- zed as benefiting the various ways in which ties. Within a company ’s corporate citizenship entrepreneurial resources can be employed. measures, which objectives are business-rela- But increasing attention is being paid to how a t e d a n d w h i c h a r e s o c i e t y- r e l a t e d ? To w h a t business can profit from its corporate citizen- extent are corporate citizenship measures plan- ship activities. The benefits accruing to com- ned and implemented as part of the business panies from their engagement lie in creating strategy? What are the socio-political attitudes prerequisites for improving economic per for- which companies associate with the issue of mance. Competitiveness and economic per- corporate citizenship? Which are the social areas formance, for instance, can be raised by tar- and issues of interest to companies? What is geting improvements of the corporate image, happening concerning investments in the futu- infrastructure improvements on production sites, re of corporate citizenship? a t t r a c t i n g n e w c u s t o m e r s, n e t w o r k i n g i n t h e company ’s local and regional environment, or Researchers Maaß/Clemens (2002), Heuberger/ positive effects in the area of HR development O p p e n / Re i m e r ( 2 0 0 4 ) , H a b i s c h ( 2 0 0 3 ) , a n d and external communication. Fabisch (2004) provided initial empirical studies on corporate citizenship activities undertaken Linking civic involvement and corporate busi- by companies in Germany. The explorative study ness objectives provides a new impetus in Ger- of Heuberger/ Oppen/Reimer focuses on selec- many where so far the debate on community ted corporate citizenship measures taken by commitment has been ver y much dominated individual companies, while the IfM Bonn study by a socio-political focus addressing compa- of Maaß/Clemens targets exclusively medium- nies from, as it were, “outside”. This new direc- sized enterprises, on the basis of a quantitati- tion ties in closely with the communication-poli- ve sur vey. Habisch (2003) presents “ best prac-
  • 10. 10 tice examples”, using the applications compa- Germany are volunteers in state and/or socie- nies had submitted for the “ freedom and respon- ty. The current sur vey “ Corporate Citizenship - sibility ” award. By contrast, the sur vey conduc- Unternehmerisches bürgerschaftliches Engage- ted by Fabisch (2004) looks into the social invol- ment in Baden-Württemberg ” (entrepreneurial vement of banks, concentrating its sophistica- community commitment in the state of Baden- ted empirical and theoretical work on one spe- Württemberg), conducted by the centre for civil cific industr y. society development (2007) is the most sophi- But both the so far most influential of all these sticated attempt to date at analysing civic cor- studies, by the Bertelsmann Foundation (2005) porate involvement at the regional level. and the “Initiative Neue Marktwirtschaft ” (New Social Market Initiative), adopted a ver y diffe- The sur vey described follows these other studies rent approach. Both studies sur vey companies in certain respects, but it also diverges from them active in Germany on a cross-sectoral basis. by having a different content-focus. This is shown However, the Bertelsmann sur vey focus is on particularly clearly in the attempt to provide an “Die gesellschaftliche Verantwortung von Unter- international comparison with the US and inve- nehmen” (The Social Responsibility of Busines- stigate how corporate citizenship is anchored in ses) and studies not only external public invol- corporate structures, and linked with flanking vement, but also internal commitment (e.g. staff socio-political attitudes within. Any insight gai- equal opportunities, staff social benefits), the ned can give indications to German companies New Social Market Initiative pays special atten- concerning a strategic (re-) adjustment of their tion to the extent to which company owners in own corporate citizenship commitment. 2 Maaß F., Clemens, R. (2002). Corporate Citizenship. Das Unternehmen als guter Bürger. Schriften zur Mittelstandsforschung Nr. 94 NF. Wiesbaden: Deutscher Universitäts-Verlag. (Corporate Citizenship. Business as a good citizen. Essays on researching medium-sized enterprises. Pub. German University Press) Heuberger, F., Oppen, M., Reimer, S. (2004). Der deutsche Weg zum bürgerschaftlichen Engagement von Unternehmen. 10 The- sen zu quot;Corporate Citizenshipquot; in Deutschland. betrifft: Bürgergesellschaft, Nr. 12. Koschützke, Albrecht (Hrsg.). Bonn. Fried- rich-Ebert-Stiftung. (The German Road to Corporate Social Responsibility. 10 theses on Corporate Citizenship in Germany. Regarding: Civil Society, No 12, Koschützke, Albrecht (pub.), Bonn.) Habisch, A. (2003). Corporate Citizenship. Gesellschaftliches Engagement von Unternehmen in Deutschland. Berlin u.a.: Sprin- ger.(Corporate Citizenship. Corporate Community commitment by companies in Germany, inter alia Springer.) Fabisch, N. (2004). Soziales Engagement von Banken. Entwicklung eines adaptiven und innovativen Konzeptansatzes im Sinne des Corporate Citizenships von Banken in Deutschland. München: Rainer Hampp. (Social Commitment by Banks. Develo- ping ideas for an adaptive and innovative concept concerning corporate citizenship shown by banks in Germany.) Bertelsmann Stiftung (Hrsg.) (2005). Die gesellschaftliche Verantwortung von Unternehmen. Dokumentation der Ergebnisse einer Unternehmensbefragung der Bertelsmann Stiftung. Gütersloh. Verlag Bertelsmann-Stiftung. (Bertelsmann Foundation (Pub.) (2005) the Social Responsibility of companies. Documenting the results of a corporate sur vey conducted by Bertelsmann Foundation, Gütersloh. Bertelsmann Publishing.) Initiative Neue Soziale Marktwirtschaft (Hrsg.) (2005). “ Corporate Social Responsibility ” in Deutschland. Textmanuskript zu den Stu- dienergebnissen. www.insm.de (New Social Market Economy Initiative (Pub.) (2005) “Corporate Social Responsibility in Germany ”. Full text version of the study results. www.insm.de.) Zentrum für zivilgesellschaftliche Entwicklung (Hrsg.) (2007).Corporate Citizenship/Unternehmerisches bürgerschaftliches Engage- ment in Baden-Württemberg. Ergebnisse der repräsentativen Unternehmensstudie. Evangelische Fachhochschule. Freiburg. (Centre for civil society development (Pub.) (2007) Corporate Citizenship /entrepreneurial civic involvement in Baden Württemberg. Results of a representative business sur vey.
  • 11. 11 IV. Methodology Approach, Specifics of Random Sampling, Execution of the Survey The sampling frame covered private commer- companies as well, based on a statistically ade- cial undertakings in Germany with an annual quate number of cases and also to highlight turnover of at least one million Euros and a mini- distinctions between differently-sized compa- mum of 20 staff. This approach was chosen deli- nies. In the actual evaluation, this disproportio- berately in order to include a wide range of nal element was removed by means of a companies in the sur vey, thereby possibly high- weighting process; i.e. in the sample, large busi- lighting differences between small, medium, nesses are weighted less than small and medi- and large companies. um-sized companies, which receive a higher weighting factor. Businesses were selected on Because the number of large businesses in Ger- a random basis. The sampling frame was the many is proportionally smaller than the number “ Fi r m e n d a t e n b a n k D e u t s c h l a n d ” ( c o m p a n y of small and medium-sized enterprises, the sam- database Germany) of Hoppenstedt informati- ples were taken to reflect this difference: com- on ser vice. This director y lists the most impor- panies with a minimum of 250 staff and an annu- tant companies from one million Euros turnover al turnover of at least 50 million Euros were con- and with at least 20 staff upwards. The 225,000 s i d e r e d a b o v e a v e r a g e. T h i s d i s p r o p o r t i o n a l businesses of the database in question repre- approach makes it possible to evaluate large sent approximately eighty per cent of German Fig. 1: Businesses per number of staff, annual turnover, and sector of industr y in Germany Structural Data Businesses in Germany Number of employees Annual turnover in millions Sector of industr y 25,9 26,4 33,5 36,7 62,4 6,4 64,1 14,7 3,9 4,5 7,2 10,6 < 50 staff < 10 Mio. Euro annual turnover Ser vices > 50 – 499 staff > 10 up to 50 Mio. Euro annual Manufacturing sector > 500 staff turnover Construction sector > 50 Mio. Euro annual turnover Other 0,2 no statement © CCCD 2007 3,7 no statement Wholesalers Retailers In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany
  • 12. 12 Structural Data US Businesses Number of employees Annual turnover in millions Sector of industr y 13 26,4 21 28,3 13,1 28 59 17 57 12,6 10,5 9,2 < 50 staff < 10 Mio. $ annual turnover Ser vices > 50 – 499 staff > 10 bis 50 Mio. $ annual turnover Manufacturing sector > 500 staff > 50 Mio. $ annual turnover Construction sector 2,0 no statement 3,0 no statement Other © CCCD 2007 Wholesalers Retailers In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany Fig. 2: Businesses per number of employees, annual turnover, and sector of industr y in the USA real net output, meaning it is ver y comprehen- part of the sur vey process, 58,3 per cent of sive, so the results gained from it can by and attempted inter views had to be counted as large be applied to the all private businesses systematic failures: 29,7 per cent refused to in Germany. take part, in 28,6 per cent of the cases the tar- get person could not be interviewed in the requi- As far as the evaluation of the American sur vey site time. The coverage rate of the sample was “The State of Corporate Citizenship in the US ” 41,7 per cent. This coverage rate would be con- (2005) is concerned, there are 1189 comple- sidered fairly good in telephone poll terms, and ted polls of companies but, for evaluation pur- is significantly above the success rate of writ- poses, it is important to bear in mind that the ten sur veys. Altogether, we obtained comple- authors of the American study have a different ted inter views from 501 companies. approach to the Germans in the way they defi- ne company size. The definition for small com- There is no consensus to date about a standard panies is 99 staff, medium companies up to German translation of the Anglo-American term 999 staff, and large companies over 1000 staff. “corporate citizenship” which is why the English In addition, the sales figures for the US com- term appears to be becoming the usual word panies are given in US Dollars rather than in used in politics, business, and academia. Despi- Euros. te this, it cannot be assumed that ever yone inter viewed is familiar with the term. That is why In Germany, board members or members of in the sur vey, the term (voluntar y) corporate corporate PR departments were inter viewed. As community commitment was used.
  • 13. 13 Given this background, a comprehensive intro- für Mittelstandsforschung Bonn (Bonn Institute duction was used to assess whether a compa- for Medium-sized Enterprise Research), for rea- ny had any involvement at all in the communi- sons of better legibility of results, a distinction ty: on the one hand, initially, corporate citizen- is made between 5 : ship was defined as “all measures and activi- ties the company in question employs to affect its social environment, thereby voluntarily assu- small businesses with up to 49 staff or less ming social responsibility ”. On the other hand, than 10 million Euros annual turnover, the issue of whether a company shows active public commitment was analysed with the help medium-sized businesses with between 40 of a list of possible types of public commitment; and a maximum of 499 staff or an annual in other words, it was defined by way of con- turnover of between 10 million to below 50 crete activities. million Euros, Following the EU threshold values of 1st Janua- large businesses with a minimum of 500 staff r y 2005, as well as the definition of the Institut or 50 million Euros annual turnover 3 The term Corporate Citizenship can be incorporated into a comprehensive debate on Corporate Social Responsibility (CSR) with the two terms overlapping slightly even in literature. CSF also comprises improvements in staff working conditions, whereas Corpo- rate Citizenship focuses more on the socio-political dimension linked with community commitment by companies. Even terms such as Corporate Responsibility, sustainability or triple bottom line are not truly helpful in drawing the dividing lines; the interna- tional debate continues to rage. Compare Bradley Googins, Corporate Citizenship: Lost in Translation, CCC News 07, June, www.bcccc.net. 4 The following types of commitment were included: Cash donations, gifts in kind, free of charge provision of ser vices, free of charge permission to use company facilities, equipment or premises, releasing staff members for community activities, support for staff volunteering, cooperation with non-profit organisations, organisation of fundraisers and charity collections, establishment/fun- ding of a foundation, miscellaneous (an open categor y).The list of commitment types carefully excludes the instrument of sponso- ring, as this is seen as a strategic tool for image promotion, i.e. business practice, based on a contractual obligation the reci- pient of sponsoring has to fulfil in return. 5 This organisation differs from the EU definition concerning distinctions between medium and large-sized enterprises to the extent that the large business categor y is defined as having 500 and not 250 staff. This corresponds to the rule adopted by the Bonn Institute for Medium and Large Enterprise Research. Both approaches use 50 million Euros annual turnover as the yardstick defining a large business.
  • 14. 14 V. Empirical Findings from the German Survey and Transatlantic Comparison of Selected Issues An unequivocal “ Yes” to Corporate Retail companies appear to consider corpora- Citizenship te citizenship as particularly important. The fact that ever y one of the companies polled is inve- The findings show that 96 per cent, or virtually sting in its social environment, is probably due all the German businesses sur veyed, participa- to the fact that, unlike wholesalers for instance, te actively in some form of corporate citizen- retailers are typically in direct contact with their ship. Among businesses with at least 500 staff end consumers. Social commitment could con- participation is 100%. Even the commitment tribute to improved customer contact through level of small and medium-sized enterprises, the targeted measures tying the consumer to the predominant size of businesses in Germany ’s company. corporate landscape, is on a markedly high level. Fig. 3: Committed businesses, broken down into number of staff and sector of industr y Businesses with Corporate Citizenship total 95,6 staff up to 49 95,2 50 to 499 95,8 500 and more 100 sector Manufacturing Sector 97,0 Construction Sector 97,3 Wholesalers 97,2 Retailers 100 Ser vices 93,4 Other 96,2 © CCCD 2007 In percentage ter ms 50 100 Source: Opinion poll on corporate citizenship of companies in Germany
  • 15. 15 Types and Tools Corporate Giving 91,0 among others Cash donations 83,4 Donations in kind 59,7 Organise fundraisers and collections 19,7 Establishment and maintenance 3,8 of foundations Corporate Volunteering 60,5 among others Support for corporate volunteering 47,9 Release of staff for Corporate 32,3 Citizenship Ser vices free of charge 54,1 among others Provision of ser vices 41,3 Permission to use company facilities, 31,4 equipment, or rooms Cooperation with non-profit par tners 47,0 Other types of commitment 2,6 © CCCD 2007 50 100 In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany Fig. 4: Types and tools of corporate citizenship Types of Corporate Citizenship by comparison, despite the current nationwide Corporate Giving – referring to donations of boom in new foundations, including corporate money and in kind – is the preferred type of foundations. corporate citizenship. Virtually ever y company showing social commitment uses this traditio- A modern form of donation has also evolved; nal type of commitment to support the com- with managerial staff and executives donating mon good. Cash donations are the most fre- time and know-how, commonly grouped under quent form, the type of commitment used by the buzzword corporate volunteering. The cor- 83 per cent of companies. Three out of five porate volunteering tool, which the survey revea- respondent undertakings make donations in kind led is being used in significantly more than half or give products or goods to organisations or the companies analysed, can be employed in individuals. In addition to which, one business different ways. At least two aspects play a role: in five organises fundraisers or collections for the first covering support for those employees, charitable purposes. Instances of companies who are already engaged in society at large choosing to set up foundations are quite rare outside working hours. Forty-eight per cent of
  • 16. 16 businesses support such types of civic involve- Deploying Companies’ Material and Human ment. The second aspect goes beyond accep- Resources for Corporate Volunteering ting private staff engagement in the company by allotting working hours to this external civic A nuanced analysis of those businesses (48 per engagement. Among the respondent compa- cent) which state they promote community com- nies, 32 per cent release their employees for mitment by their staff, concluded as follows: such activities, putting in time with the volunta- r y fire brigade for example. Releasing employe- Eighty-one per cent of these businesses allow es for civic involvement can also mean using the staff to use business resources (i.e. PC, such people for selected projects of a non-pro- copier, company phone, company car) for fit type. What comes to mind are one-off acti- their civic involvement. vities by all members of the staff, or individual departments (so-called activity days, e.g. a Seventy-eight per cent of these businesses manual work day), or sitting in on classes or allow their staff to engage in civic involve- courses for several days, or a longer-term len- ment during working hours. ding of staff to ser ve charities in a managerial function. In addition to a company providing mate- rial and human resources for civic engage- Entrepreneurial resources of a different kind, ment, one in four of these businesses also involving neither cash nor people, can also be makes money available, by supplementing used, as is shown by at least 54 per cent of cash donations made by members of the businesses which make such corporate resour- staff (matching funds). ces as ser vices (41 per cent) or infrastructure (e.g. premises and equipment) available to soci- Less than one in ten (9 per cent) of this group al concerns free of charge (31 per cent). of companies actively encourages employe- es to engage in civic involvement in certain Moreover, the companies sur veyed frequently projects and areas. opt for corporate citizenship in conjunction with non-profit partners. Cooperation with charita- ble organisations is practised by 47 per cent of the businesses in the sur vey. As a rule, such a partnership with a non-profit organisation tack- les projects aimed at resolving social problems, bundling corporate resources and non-profit know-how, which are then used jointly to achie- ve a specific objective.
  • 17. 17 Preferred areas for Corporate Citizenship The foremost benefactor of Corporate Volun- teering is the area of “ neighbourhood and In choosing areas for commitment, the busines- community ”, followed by “sports and leisu- ses involved concentrate largely on “sports and re time” and “social affairs” leisure time”, primarily through funding sports and leisure time clubs. Other areas of commit- The ranking of subject areas for cooperati- ment, namely “education and training” also play on with non-profit partner organisations is a role, as do “ neighbourhood and communi- led by the sector “social affairs”, with “sports ty ”, or “social affairs”, which are also important and leisure time” in second place, followed for many of the companies participating in the by “education and training”. sur vey. Adopting different policies, companies commit in a variety of ways. All in all, companies presumably prefer those areas which can contribute to creating an If cash or donations in kind are involved, the attractive environment for their business loca- most frequently quoted recipient is the sports tion. There appears to be a clear focus on crea- and leisure time sector. The available data ting a well-functioning public life with a working does not, however, allow conclusions to be infrastructure, promoting the education of the drawn concerning the scale of support given local people and mitigating social problems in to this or other areas of involvement. the vicinity. Fig. 5: Cooperation between businesses committed to the community and other organisations and institutions Cooperation with a Par tner with partner without partner 41,1 58,9 © CCCD 2007 In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany
  • 18. 18 Involving par tners in Corporate Citizen- social networks to resolve a specific task in a ship sustainable way. Corporate citizenship often occurs in the form The majority of the companies involved (59 per of cooperation with other organisations and insti- cent) operate their corporate citizenship acti- tutions. This frequently has the advantage of vities in conjunction with at least one partner, providing a local partner for concrete corpo- not necessarily a non-profit organisation. rate citizenship projects who is familiar with the partnership between a company and a local Whether or not a partnership is sought with pressure group, a kindergarten, a charitable another organisation varies according to com- organisation, or part of a local administration. pany size. Three out of four medium-sized enter- prises, and four out of five large companies, In such cases, businesses support the work of declared having entered into partnerships for the external partner by using resources such as their corporate citizenship activities, while smal- cash, gifts in kind or human resources, while the ler companies only rarely cooperate with a partner provides know-how, competence, and partner. Fig. 6: Partner specification Par tner Specification Local volunteer organisations (e.g. sports clubs) 41 Nurser y schools, schools, hospitals, etc. 25 Charitable organisations 22 Local authorities 21 Other businesses 13 Employers’ Organisations, Confederations of Industr y 12 Churches 12 International Aid Organisations 11 Lobby groups 11 Government at county and regional level 6 Political parties 4 Trade Unions 2 Other partners 5 © CCCD 2007 25 50 In percentage ter ms Source: Opinion poll on corporate citizenship of companies in Germany
  • 19. 19 Approximately half the smaller businesses enga- nisations as clubs, projects, and initiatives. ge in the community without having a coope- ration partner. The presumed reason is that small On the following ranks are public institutions companies often show their social commitment such as education facilities and hospitals (25 by donating smaller amounts and adopting per cent), national charitable organisations (22 measures which do not need the support of an per cent), international aid organisations and external partner. Broken down into sectors, only lobby groups (11 per cent each) as well as chur- retail companies stand out by having at least ches (12 per cent) are found. one partner in seventy-one per cent of their commitment, all the others are the average On the other hand, businesses turn increasing- level. ly to governmental and political bodies: at least 21 percent cooperate with local authority In principle, partners are not essential for cor- departments, 6 per cent with borough or regio- porate citizenship; after all, 41 per cent of busi- nal governments and 4 per cent with political nesses have so far dispensed with this type of parties. cooperation. Still, it could be argued that irre- spective of company size, this implies a loss of In this context, cooperation with industr y play- benefit from valuable experience, together with ers, specifically other businesses (13 per cent), possible efficiency increases for corporate citi- or employer organisations or trade unions enjoy zenship. relatively high popularity (12 per cent). Scrutinising the partners of companies with The variety of different cooperation partners community commitment in greater detail indicates that a considerable number of busi- shows that local organisations such as clubs nesses actively collaborate with representatives a n d l o c a l i n i t i a t i v e s c o m e f i r s t. A m o n g t h e from the three sectors: state, market and, espe- undertakings cooperating with a partner, 41 cially, the tertiar y sector, when implementing per cent work with such types of voluntar y orga- corporate citizenship.
  • 20. 20 Corporate Citizenship with a clear local mitment of almost one in ten small companies Emphasis exceeds the regional sphere. The great importance given to local volunteer The range covered by individual corporate citi- associations as cooperation partners, indicates zenship measures therefore hinges on the con- that corporate citizenship concentrates predo- text in which the business concerned operates. minantly on a company ’s immediate vicinity. Companies with a geographically limited mar- ke t a n d s u p p l i e r s, s t a f f, c u s t o m e r s e t c. , a l l Among the committed companies, three quar- coming from the immediate neighbourhood, ters state they operate within their region and also tend to limit their engagement to this area. in the local environment around their sites. By Assuming that large companies tend to opera- contrast, companies rarely become involved in te on a national and global scale, the data sug- a national (15 per cent) or international con- gest a geographical overlap between the envi- text (14 per cent). Therefore, businesses tend to ronment in which a company conducts its busi- focus primarily on an intact environment for their ness, where it also focuses its social commit- company HQ, or their production site/s. Given ment. how important a functioning corporate environ- ment is for a successful business, this result does This assumption is supported by studying the not come as a surprise. extent of corporate citizenship efforts in indivi- dual sectors of industr y: primarily ser vice-cen- Higher staff levels and higher sales also mean tred businesses (17 per cent) and the proces- a geographical extension of corporate citizen- sing industr y (15 per cent) are running corpo- ship measures. At the same time, the kind of rate citizenship programmes with an internatio- corporate citizenship which reaches out to a nal focus. Whereas the commitment of retailers national or even international arena emerges deeply anchored in their local communities only as an activity not left exclusively to medium and rarely reach national (1 per cent) or even inter- large-sized enterprises. After all, the social com- national (5 per cent) level. Fig. 7: Range of corporate citizenship Range of Corporate Citizenship total ▲ ▲ ▲ Local/ regional, in the vicinity of the business HQ 73,8 79,5 64,4 57,9 Local/ regional, in the vicinity of business sites 24,3 17,8 32,5 57,9 National 14,5 11,4 19,4 26,3 © CCCD 2007 International 13,6 8,4 22,0 21,1 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany
  • 21. 21 Amount in Euros for 2005 total ▲ ▲ ▲ Up to 5,000 max 29,1 37,9 15,6 5,3 From 5,000 to 10,000 max 17,2 19,5 13,8 10,5 From 10,000 to 50,000 max 30,5 28,9 36,3 10,5 From 50,000 to 100,000 max 5,2 4,0 6,9 10,5 100,000 plus 6,5 1,7 12,5 31,6 © CCCD 2007 no statement/don’t know 11,5 8,1 15,0 31,6 In percentage terms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany Fig. 8: Corporate citizenship expenditure in 2005 Investment in Corporate Citizenship and cost intensive corporate citizenship mea- sures remain the province of big business. Invest- Adding up the costs involved or investment ments exceeding one million Euros are compa- required for corporate citizenship measures, ratively rare. including project and HR costs, donations and PR expenses, yields a ver y diverse picture. In this context, it is extraordinar y how many busi- nesses did not answer this question or claimed In 2005, 38 per cent of the companies with up not to know the amount spent on corporate citi- to 49 employees spent less than 5,000 Euros on zenship measures, because the overriding majo- corporate citizenship. By contrast, 32 per cent rity of those which did not provide information of companies with 500 or more staff invest more about the financial cost of their commitment than 100,000 Euros in this field. are large companies (5 per cent “ no answer ”, 26 per cent “don’t know ”). The fact that a majo- Adding these figures up shows that three quar- rity of these proved unable even to estimate ters of businesses spend below 50,000 Euros. the amounts involved either points to insuffi- Small companies in particular, but even medi- cient controlling of their civic engagement or u m - s i z e d o n e s t o o, v e r y r a r e l y e x c e e d t h e indicates few such funds are available within 50,000 Euro limit. Thus far-reaching, large-scale, the company in question.
  • 22. 22 Corporate and Community Objectives there are discrepancies, occasionally ver y large at the Focus of Commitment ones, between big business and other underta- kings. Large companies assess virtually ever y one of the objectives as more important than The central issue for committed companies is s m a l l a n d m e d i u m - s i z e d o p e r a t i o n s d o. T h e an awareness of corporate citizenship and obvious conclusion is that the concept of cor- efforts to create a “healthy ” environment around porate citizenship, an Anglo-American import commercial or production sites. Just about half after all, is recognised more clearly by large of businesses involved consider these objecti- German companies because their manage- ves important or ver y important. This means that ment is more familiar with corporate citizenship unequivocally society-related objectives are at and its terminology in terms of socio-political the focus of the corporate citizenship efforts of issues. businesses, whereas strategic considerations relating to the economic success of the com- As shown in figure 9, a proportionally larger num- pany play a less important role. ber of respondents rate society-related objec- tives highly for their business: 95 per cent cite Yet there are also striking differences in how the applied social responsibility as important; 74 different categories of businesses, depending per cent consider maintaining and improving on their size, assess these objectives. After all, the local environment around the company site Fig. 9: Corporate citizenship objectives – top two findings (critical and high importance) Objectives total ▲ ▲ ▲ Being aware of social responsibility 58,1 51,5 66,7 94,5 Maintaining and improving the environment 49,1 46,3 52,2 73,7 at business HQ/sites Improving own competitive position 24,1 24,9 22,7 21,1 Investing in society as a prerequisite for 22,5 20,5 23,8 47,3 corporate economic success Promoting corporate volunteering 22,4 22,5 22,2 16,7 Allowing society to participate in business suc- 22,1 17,8 28,9 27,8 cess Communicating on a political level with lobbies 19,9 17,5 23,3 31,6 and committed citizens. © CCCD 2007 Improving the bottom line 11,9 12,9 8,7 20,0 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale from 1 = critical, up to 5 = no impor tance Source: Opinion poll on corporate citizenship of companies in Germany
  • 23. 23 Comparing Corporate Citizenship Objectives in Germany/the US Importance of objective corporate citizenship engage- ...improving conditi- ...supporting ...responding to ment within the business com- ons in your communi- employee volunteer- community/ interest munity ty ism groups regarding issu- es they care about How about... D 18,0 26,0 37,0 Not at all important USA 0,7 7,1 6,3 D 8,0 22,0 22,0 Somewhat important USA 9,5 22,7 26,5 D 25,0 29,0 21,0 Important USA 34,5 39,6 41,8 D 37,0 20,0 15,0 Ver y Important USA 45,3 25,5 21,8 D 12,0 2,0 5,0 Critical USA 9,6 4,3 3,4 D 0,0 0,0 0,0 don’t know USA 0,0 0,0 0,0 D 478 478 478 © CCCD 2007 Total USA 1158* 1158* 1158* In percentage terms *no statement 0,4 *no statement 0,9 *no statement 0,3 Source: Opinion poll on corporate citizenship of companies in Germany Fig. 10: Comparing corporate citizenship objectives in Germany/the US to be important, and 47 per cent believe cor- pursued in a diffuse way becomes even more porate citizenship a prerequisite for economic clear when we relate this to comparable results success. from the 2005 sur vey “The State of corporate citizenship in the US ”. Data is available for three This is a relatively high result. But at the same of the objectives cited in illustration no. 9. Com- time it is clear that market and customer-rela- paring the top two results of US businesses with ted objectives are not the main focus, becau- those of German businesses on the issue of se only 20 per cent of companies relate their “ maintaining and improving the environment public involvement to improvements in the bot- around a business or production location”, shows tom line. that businesses on both sides of the Atlantic rate this question equally highly in relative terms The picture which emerges of objectives being (US 55 per cent, Germany 49 per cent). Strikin-
  • 24. 24 gly different is the fact that 18 per cent of Ger- engagement ”. In Germany 22 per cent rate this man businesses but only 0,7 per cent of Ame- objective highly and in the US the figure is 30 rican businesses state this objective bears no per cent rate. It is hardly surprising that this so- relation to their own corporate citizenship acti- called “corporate volunteering” is not yet wide- vities. ly known in Germany, what is surprising is the fact that 26 per cent of German companies, There is a similar result for “Political communi- as opposed to just 7 per cent of US companies, cation with lobby groups and engaged citizens”. consider this issue to be of no importance wha- Here again, there is not much difference bet- tever. ween the top two results (US 25 per cent, Ger- many 20 per cent). And a striking feature in this Obviously, German companies still have diffi- context is the number of German businesses culties in consistently determining the objecti- which do not assess communication with sta- ves linked to their corporate citizenship activi- keholders having any importance (Germany 37 ties. Their perception of social responsibility alt- per cent, US 6,3 per cent). hough highly rated, does not yet follow a stra- t e g y o f c o r p o r a t e a n d c o m m u n i t y- f o c u s e d The same differences come up in the third area engagement together with a corresponding o f c o m p a r i s o n “ Pr o m o t i o n o f s t a f f v o l u n t e e r communication concept.
  • 25. 25 Happening by Chance or Business Stra- nesses as a whole tend to shape their involve- tegy Planning of Corporate Citizenship ment in a reactive way. The majority of respon- dent businesses only become involved in the Measures community when appropriate charitable or soci- al concerns are suggested from outside. The- Corporate Culture as Orientation refore, only a minority of 38 per cent is active- In more than three quarters of all cases corpo- ly looking for a way to show societal steward- rate citizenship is part of the way a company ship and invest in the common weal with con- sees and defines itself. Just as many busines- cepts and projects initiated in-house. Having ses take care to ensure that any outside sug- corporate citizenship deeply anchored in cor- gestions for involvement in issues fit the busi- porate culture, while at the same time having ness, and that the business model plays a vital a more reactive approach to it, reveals a discre- role in determining the planning and implemen- pancy which does not match the clear strate- tation of societal stewardship activities, corpo- gic positioning of the idea of corporate citizen- rate citizenship in most German businesses can ship in the company. But here again, compa- be counted an integral part of the corporate ny size plays a role which should not be over- culture. looked: the larger a business, the more strate- gic and active the planning and implementa- At the same time, the data suggest that busi- tion processes for corporate citizenship appe- Fig. 11: Strategic anchoring of corporate citizenship measures Strategic Approach to Corporate Citizenship Corporate citizenship is part of our self-image and we total ▲ ▲ ▲ provide money, working hours, gifts in kind especially 78,2 78,5 76,7 84,2 for this. We take care that any request is fitting for our compa- ny. 77,2 75,2 78,6 75,2 We follow our company model in planning and imple- menting our social involvement. 68,5 64,1 74,4 84,2 We are, ourselves, actively looking for ways to com- mit. 37,5 33,3 42,1 63,2 Our community commitment follows clear, measura- ble targets. 31,5 33,2 27,7 31,6 There is a predetermined action plan for our commu- nity commitment. 12,9 11,4 14,5 21,1 We have evaluation tools for our commitment measu- 13,1 9,4 26,3 © CCCD 2007 12,3 res. In percentage terms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany
  • 26. 26 ar to be. Another finding also comes into play Corporate Citizenship no PR-tool in this context – large enterprises tend to put greater emphasis on evaluation, i.e. employ- Among engaged businesses it is the large com- ing tools to evaluate corporate citizenship mea- panies with large turnovers in particular (89 per sures. cent) which make their corporate citizenship engagement clear to the public. Usually, this is done via press notices and press reports (79 per Responsibility for Corporate Citizenship in the cent of large companies), via the company Company homepage (58 per cent) or via customer maga- zines (32 per cent), all of which provide written Responsibility for societal stewardship rests pri- information about corporate citizenship. In addi- marily with company executives. In larger busi- tion, all sorts of events are used to draw people’s nesses, management and organisation of cor- attention to this engagement. Also, 21 per cent porate citizenship measures are also delega- of companies with high staff levels mention their ted to more than one person. As a rule, the cor- corporate citizenship activities in their annual porate citizenship theme is then part of the reports. Fig. 12: Responsibilities for corporate citizenship within the business Responsibilities total ▲ ▲ ▲ Owner/manager 90,2 93,6 86,9 65,0 Board 7,7 5,0 11,3 21,1 Press/PR department 6,9 3,7 10,0 31,6 No particular responsibility/ever yone is responsi- 1,9 0,7 3,8 5,3 ble Cross-sectional unit from different departments 1,9 0,7 3,1 10,5 Specially established department/body for cor- 1,5 0,7 2,5 5,3 porate citizenship © CCCD 2007 Other departments/staff 6,9 5,0 8,8 21,1 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany responsibility of both the press and PR depart- A mere 16 per cent of large-sized enterprises ments, as well as being addressed as a cross- use their image as corporate citizens in active sectional task by a variety of other concerned self-promotion in the print and electronic media. areas. But it is rare to find a dedicated depart- This means that only a tiny group of companies ment for corporate citizenship established wit- tie their community commitment in with promo- hin the company; though where such depart- ting their marketing and sales activities. The fact ments do exist, they are not exclusively the pro- the German public might take a rather scepti- vince of large-scale businesses. cal view of a link between civic engagement
  • 27. 27 and business self-interest, may explain this atti- as a PR tool. Unlike large companies, SMEs do tude. Companies have no wish to expose them- expend much effort on publicising their com- selves to complaints of having abused corpo- munity commitment. Half the small businesses rate citizenship as a PR tool, which might put and 43 per cent of medium-sized enterprises their credibility at risk. It seems equally likely, even state they do not report their activities in though, that companies simply do not expect the community at all. The motto “do good and sufficient benefit from extensive communicati- talk about it ” therefore seems to apply much on of corporate citizenship activities. more to large-sized companies. They use diffe- rent ways in which to communicate their civic For small and medium-sized businesses corpo- engagement and tr y to publicise this in a cre- rate citizenship hardly appears to matter at all dible and responsible manner.
  • 28. 28 Socio-political Attitudes of Companies porate citizenship than is perceived by the with Regard to Corporate Citizenship public. Among the companies inter viewed in the US, 92 per cent agree with this statement. In Germany, the view is held predominantly by The sur vey “The State of corporate citizenship small and medium-sized companies, (83 per i n t h e U. S. ” h a s p r o v i d e d c o m p a r a t i v e d a t a cent each), in other words, by those which do regarding the complex issue-related attitudes least to publicise their civic engagement, whe- which companies have vis-à-vis corporate citi- reas in the US, mainly large businesses subscri- zenship, the effect of factors with both positive be to this opinion (98 per cent). and negative influence, as well as a selection of core areas for corporate citizenship. In Ger- Similar views are expressed by German and many, just 83 per cent of companies sur veyed American businesses when asked whether cor- assumed that many companies have more cor- porate citizenship should be regulated by the Fig. 13: Comparative findings of socio-political attitudes, Top two findings (fully agree, agree) Attitudes total ▲ ▲ ▲ D 82,8 83,0 83,2 73,6 Many companies do a great deal more for their communities than is talked about or known USA 92 91 90 98 D 80,5 80,4 81,5 73,7 Corporate citizenship should be completely voluntar y - no laws / regulations should govern it USA 80 81 78 75 D 66,2 64,1 69,2 66,7 Many companies promote corporate citizenship, but are not truly committed to it USA 47 49 48 42 D 60,6 61,6 57,7 66,7 Corporate citizenship needs to be a priority for companies USA 81 77 87 98 D 46,1 41,5 52,9 63,1 The public has a right to expect good corporate citizenship from companies USA 69 66 69 91 D 40,4 40,7 40,1 42,1 Corporate citizenship makes a tangible contribution to business' bottom line USA 64 61 65 84 © CCCD 2007 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale: from 1 = agree completely, to 5 = do not agree at all Source: Opinion poll on corporate citizenship of companies in Germany
  • 29. 29 state. On this, there is agreement across the German companies are far more self-critical border: 81 per cent of German and 80 per cent and therefore also fairly realistic when asses- of American companies reject this. In Germa- sing how well they implement corporate citizen- ny, though, this opposition is clearly more pro- ship in practice. 66 per cent of German respon- nounced (68 per cent of German businesses dents are of the opinion that civic engagement reject this totally compared to 40 per cent of may well be highly rated within the company, US businesses). This has to be considered against but is not implemented sufficiently well. 67 per the backdrop of histor y, where in Germany there cent of large-scale businesses agreed with that. is already an institutional system which has evol- I n t h e U S, o n l y 4 7 p e r c e n t o f r e s p o n d e n t s v e d o v e r t i m e, t h e s o c i a l m a r ke t e c o n o m y, agreed. which institutionally integrates businesses into society at large; e.g. the dual vocational trai- The huge gap which exists in both countries con- ning system, sustainability strategies, or clima- cerning their assessment of a tangible contri- te protection programmes. Still, businesses are bution of corporate citizenship to business suc- interested in being independent in selecting cess is remarkable. The American response is a whether and which type of corporate citizen- good 63 per cent, clearly above the German ship practices to choose, and to use their resour- response by 23 per cent. Irrespective of com- ces freely without restrictions imposed by the pany size, only about 40 percent of German state. In both countries, it is above all the small businesses admitted to deriving a positive busi- and medium-sized enterprises which are the ness effect from corporate citizenship, where- ones to reject state inter vention. In principle, as in the US, the response differs more clearly the type and scale of corporate citizenship is according to company size. 84 per cent of Ame- something they believe should be decided on rican large-scale businesses give a positive ans- a voluntar y basis. wer. This last comparison in particular shows how different companies see and define themsel- As far as questions of attitude are concerned, ves in this respect, which is the key point for cor- clear distinctions can be made between Ger- porate citizenship on both sides of the Atlantic. man and American companies, indicating how deeply anchored corporate citizenship is in the Positive Reinforcement Factors for Corpora- way American companies see themselves as te Citizenship coming from the tradition of “ welfare capita- lism”. The postulated statement that society has When asked which factors reinforce corporate a right to expect companies to be societal ste- citizenship, a similar picture emerges, indica- wards meets with the full or partial approval of ting that corporate citizenship is anchored to a 69 per cent of American businesses sur veyed, different extent in the two countries’ businesses. with large-scale enterprises by far the ones most in favour. Only 46 per cent of German busines- Here again, there are clear differences between ses share this view but here, too, 63 per cent Germany and the US, regarding the attitudes of of large-scale companies are in favour; putting small and medium-sized enterprises as well as them clearly above the average. Just about 61 large businesses. On average, 62 per cent of per cent of the German companies asked con- all German companies agree that corporate sider societal stewardship a corporate priority, citizenship fits in well with the tradition and the while in the US this amounts to as much as 81 values of the company, but for large-scale busi- per cent. nesses the figure is 83 per cent. About 73 per
  • 30. 30 Factors of Positive Reinforcement of Corporate Citizenship total ▲ ▲ ▲ Internal factors D 61,8 60,1 62,9 83,3 It fits our company traditions and values USA 73 68 79 91 D 49,6 45,8 54,4 73,7 It improves our reputation/image USA 56 54 57 76 D 30,1 30,8 28,3 36,9 It is part of our business strategy USA 44 41 45 64 D 14,7 12,4 14,0 50,0 It helps to recruit and retain employees USA 30 25 34 55 External factors D 38,3 36,7 38,2 70,0 It is expected in our community USA 24 20 24 50 D 24,2 21,1 28,3 36,8 It is important to our customers/consumers USA 36 33 36 53 D 3,1 3,7 1,2 5,3 It responds to laws and political pressures USA 14 14 12 18 © CCCD 2007 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale from 1 = ver y strong positive reinforcement effect, to 5 = no positive reinforcement effect at all Source: Opinion poll on corporate citizenship of companies in Germany Fig. 14: Comparative findings of factors with positive reinforcement on corporate citizenship in Germany/USA Top two findings (ver y strong positive reinforcement effect, strong positive reinforcement effect) cent of the American companies in the sur vey, are an important factor for one German busi- and 91 per cent of large businesses, confirm ness out of two, with three quarters of large- this reinforcing effect. scale business respondents making this clear. In the US too, image matters to 56 per cent of With regard to the second most important moti- all companies, in particular to 76 per cent of vation for corporate citizenship, image impro- large businesses. vement, we notice similar differences concer- ning company size in Germany and the US. On A major difference between American and Ger- average, opportunities for image improvement man companies emerges when asking whether
  • 31. 31 it should be taken for granted to exercise cor- however, is customer satisfaction (36%), which porate citizenship on the spot, as believed by clearly appears less important to German busi- about 38 per cent of all businesses and 70 per nesses (24%). This also applies to large busines- cent of large companies in Germany. This puts ses. Germany far ahead of US companies, where only 24 per cent agree, making this the second- What is most striking about these two factors is to-last item in the US ranking of reinforcing fac- the negative importance German companies tors. Against the backdrop of previous findings assign them. Thirty-nine per cent of German regarding the anchoring of corporate citizen- companies compared with only 11 per cent of ship in American corporate culture, this is a sur- American undertakings do not see corporate prising result, requiring further research. citizenship as a factor in customer satisfaction. And where attracting and retaining staff is con- Another remarkable result is that in Germany cerned, as many as 48 per cent of German about 30 per cent of total respondents and companies do not consider corporate citizen- approximately 37 per cent of large companies ship has any relevance at all, compared with regard corporate citizenship as part of their busi- just 15 percent in the USA. ness strategy; whereas 44 per cent of total US respondents directly link engagement and cor- Both German and American businesses feel least porate strategy. A clear 64 per cent of Ameri- motivated when reacting, or being obliged to can companies with 500 staff or more link enga- react, to legislative or political inter vention, alt- gement and business strategy, which emphasi- hough more US companies express agreement ses the potential of what is sometimes seen as than German. A mere 3 per cent of German “soft ” factor corporate citizenship as a factor companies find that regulations act as positi- in “ hard ” entrepreneurial strategy, especially in ve reinforcement for their corporate citizenship a US context. The extent of the difference bet- activities, which compares with just 14 per cent ween German and American businesses as to of US companies. whether corporate citizenship is, or is not, part of the business strategy becomes clear when All things considered, when assessing the poll comparing the negative values on the ranking results of the large-scale businesses in both scale. While just 9 per cent of all US companies countries, it is remarkable that the corporate do not recognize corporate citizenship as part citizenship efforts of German and American busi- of their business strategy, among German com- nesses are guided by company tradition and panies the figure is 32 per cent, i.e. this is the values, and that German companies are star- view of almost one German company in three; ting to agree more with American companies a remarkable finding. about the resulting image gain. But they lag far behind US businesses where the positive rein- But the factor ‘attracting staff ’ also reveals major forcement obtained through linking business differences, when company size is taken into strategy and corporate citizenship is concer- account. For small and medium-sized enterpri- ned. Recognizing the benefits of social enga- ses this factor has virtually no relevance (12 and gement for a positive current account balan- 14%), while it is a major issue for one out of two ce seems as yet to be insufficiently well deve- large businesses in Germany. More American loped among German companies. The under- companies than German express agreement to rated or negated aspects of attracting and retai- this factor. What matters to them even more, ning staff appear to underline this fact.
  • 32. 32 Factors with a limiting Effect on Corporate Why above-average financially strong large busi- Citizenship nesses do not feel able to provide additional resources requires further clarification. In this When asked about which obstacles influence a respect, another result is of interest. There is a stronger corporate citizenship, positive correlation between the lack of resour- German and American companies agree. Fifty- ces as an obstacle and the frequently by large four per cent of American and 48 per cent of companies expressed view that civic involve- German companies name a lack of resources ment is not being implemented with the neces- as the overriding obstacle. Looking at compa- sar y consistency. Many of the respondent large- Fig. 15: Comparatives findings of factors with a limiting effect on corporate citizenship Germany/USA Top Two findings (ver y strong limiting effect and ver y limiting effect) Factors with a limiting Effect total ▲ ▲ ▲ D 48,1 47,8 47,6 57,9 Lack of resources, e.g. time, staff, funds USA 54 59 48 38 D 12,3 7,1 13,2 10,5 No significant benefit to the business USA 13 13 13 8 Not sure what being a good quot;corporate citizenquot; D 10,1 9,3 11,9 10,0 means USA 10 11 8 9 D 7,5 8,0 7,2 2,0 Not of real interest to our employees USA 16 18 18 2 D 7,5 6,4 9,0 10,5 Top management does not support it USA 10 9 12 9 D 4,5 3,2 7,1 4,0 Middle management does not support it USA 8 7 11 6 © CCCD 2007 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale from1 = strongly limiting effect, to 5 = no limiting effect at all Source: Opinion poll on corporate citizenship of companies in Germany ny size the reverse results are impressive. In the scale businesses seem to be well aware of this US, this obstacle is cited ver y much by small discrepancy between general endorsement of companies, less so by medium-sized compa- the objective “awareness of social responsibili- nies and even less by large-sized businesses. In ty ” and the real-life activity of this type which Germany, it is exactly the other way round. The companies engage in. German large enterpri- larger the business, the more a lack of resour- ses are particularly well aware of a lack of resour- ces is seen as an obstacle to corporate citizen- ces as an obstacle because there is a great ship. divergence between the companies’ activities
  • 33. 33 and the required value in the perception of cor- te engagement. Looking at the argument that porate citizenship, which is also reflected – to corporate citizenship lacks relevance for the a somewhat lesser extent – in public involve- employees does, however, reveal a major and ment as part of the corporate self-image. This visible difference between the two countries. means there is not so much a problem of atti- This argument is advanced by 16 per cent of tude, more one of implementation. The assump- American, but by only just about 8 per cent of tion is that an integration of theor y and practi- German businesses. In both countries this is limi- ce in an evaluation context would cause more ted to small and medium-sized enterprises, while resources to be provided. it is virtually irrelevant for large businesses. What is amazing is how vehemently German compa- Far less important is the second respectively. nies reject this factor as an obstacle. Fifty-eight third ranking obstacle listed, saying that civic per cent of German businesses do not recog- engagement does not yield tangible economic nize this as constituting any kind of obstacle for benefit. This argument is put for ward by an ave- their commitment, compared with only 16 per rage of 12 per cent of German and 13 per cent cent of US firms. Since German staff involve- of American companies. Regarding US compa- ment in corporate citizenship is still clearly lag- nies, this finding is hardly surprising, because ging behind that of the US, the assumption is when commenting on their attitudes, 63 per that the importance of employee volunteerism cent assume corporate citizenship will contri- is simply not sufficiently recognized. bute demonstrably to their economic success, compared to just 40 per cent of German busi- According to the information the respondent nesses. At the opposite end of the scale, com- companies provided about themselves in both menting on their attitude vis-à-vis corporate citi- the US and Germany, the factor which least limits zenship, 42 per cent of German companies – further commitment is insufficient or inadequa- as compared with just over 5 per cent of Ame- te support by top management (8 and 10 per rican companies – state that corporate citizen- cent respectively) or middle management (4 ship will not will rather not make a contribution and 8 per cent respectively). On the contrar y, to the economic success of a company. This 70 per cent of German respondents state that rejection by the German companies could hard- lack of top or middle management support con- ly be stronger. That is why it is amazing that this stitutes no obstacle at all. Against the back- view is not considered to be a limiting factor ground of this self-image it can be concluded for, or impediment to, civic engagement. After that both groups provide strong support for com- all, 71 per cent of German companies hold that munity commitment. This is another amazing this fact has no or ver y little adverse effect on result because in many meetings with those their commitment. responsible for CC in German companies, there were repeated complaints that it is the ver y lack In both countries only one company in ten cites of any managerial support which prevents dyna- a lack of understanding about how to achieve mic corporate citizenship from taking hold in civic involvement as an obstacle to appropria- the company.
  • 34. 34 Issues and Areas for Corporate Citizen- large-scale companies and SMEs across natio- ship nal borders. In the US an average 25 per cent of all companies and 51 per cent of large-scale According to both German and US businesses companies commit to this area, compared to in the sur vey, improvement in product safety, 16 and 56 per cent respectively in Germany. product quality and safety precautions for the This testifies to the extraordinar y importance staff top the list of all preferred issues and areas companies on both sides of the Atlantic give of engagement. Four out of ten and five out of to the promotion of university education. ten companies respectively make such state- ments. This is increasingly true for large-sized A comparison between large-scale businesses businesses in both countries, where about six reveals: US-American large businesses commit out of ten say they are committed as mentio- above average, i.e. 39 per cent (US average: ned above. Twenty-five and 23 per cent, of Ger- 26%) to the environment, unlike German com- man and US companies respectively, show an panies, where 21 per cent show this type of almost similarly strong commitment to infrastruc- commitment. Thirty-three per cent of large Ame- ture maintenance and improvement. Commit- rican companies are involved in extending world ment in this area is irrespective of company trade, again an above average commitment, size. while German large businesses commit far less in this sector, with only about 14 per cent which There are three areas where differences bet- corresponds to the German average. In addi- ween the two countries emerge: in Germany tion, enterprises from both countries, particu- the third of these is support for social and care larly large-scale enterprises once again, differ facilities with on average 32 per cent, 41 per as far as their commitment for civic rights and cent among large businesses. By contrast this human rights is concerned. On average 7 per issue ranks in the bottom section of the list of cent of German firms answered accordingly, priorities for an average of 14 per cent US com- but 15 per cent of US ones. When comparing panies. Though, conversely, American busines- large businesses directly, the gap widens even ses are particularly keen on access to the health more. Twenty-one per cent of American busi- system via health insurance, which is not an nesses report their activities centre on this issue, issue for German companies. On average three as compared to only 3 per cent of large Ger- US firms out of ten commit in this area. Given man ones. Small companies, amazingly, are the comparatively good health care system in more active in this field. Germany, only 15 per cent of German compa- nies do likewise. Disaster relief is another area Convergence in the commitment activities of where there are major differences; on average companies in both countries also occurs in a 22 per cent of all US companies are involved, variety of different areas: both countries rate among the large companies the figure is as involvement in combating poverty, disease, ope- high as 48 per cent. Given the model state of ning up alternative sources of energy or com- disaster control in Germany, it is understanda- bating global climate change as low priority ble that only just about 12 per cent of all Ger- a r e a s. B u s i n e s s e s f r o m b o t h c o u n t r i e s a r e man companies and 15 per cent of large-scale moving on a fairly similar low level. companies opt for this area of engagement. To sum up: German and American companies Looking at engagement in academic educati- are primarily committed in areas where a strong on and universities reveals differences between link to their business interests can be presumed,
  • 35. 35 e.g. product quality assurance, safety and secu- countries companies are also heavily commit- rity at the workplace and infrastructure invest- ted to education. It can be assumed that Ger- ment. It is certainly no coincidence that Ame- man companies react to the educational plight rican companies increasingly turn towards pro- of their countr y in this way, and therefore com- viding access to the health system or to dis- mit to an area which is one of the core fields aster relief, given the sadly insufficient levels of of government responsibility and thus bears furt- state protection in both these fields. In both her obser vation. Fig. 16: Comparative findings on areas and issues involving corporate citizenship Germany/ USA Top two findings (ver y strong and strong) Issues total D 49,7 ▲ 47,5 ▲ 52,4 ▲ 63,1 Employee safety measures * - - - D 38,4 37,0 38,7 66,6 Improving the safety and efficiency of products USA 38 34 41 56 D 32,6 30,3 35,7 40,0 Helping to support dependent care USA 14 12 16 26 D 26,8 24,8 30,6 26,4 Social integration of the disabled * - - - D 24,4 23,3 26,4 31,6 Insuring infrastructure development USA 23 23 24 22 D 20,8 21,5 19,5 22,2 Improving the environment USA 26 23 23 39 D 16,4 9,6 24,4 57,9 Improving community college and higher education USA 25 19 32 51 D 14,9 11,9 19,8 25,0 Improving public health USA 12 11 11 23 D 13,0 12,5 13,2 10,6 Developing alternative energy sources USA 10 8 9 19 D 12,6 9,7 15,9 27,8 Illness (e.g. AIDS, cancer) * - - - D 11,8 10,0 14,4 10,5 Responding to disaster USA 22 16 26 48 D 10,8 10,0 12,5 5,3 Reducing poverty USA 13 11 14 19 D 7,2 7,4 7,7 3,0 Helping to safeguard civil or human rights USA 15 15 11 21 D 5,3 5,1 5,4 10,6 Addressing global climate change USA 6 5 3 15 D 4,8 2,9 6,6 15,0 Expending international trade USA 14 11 16 33 © CCCD 2007 In percentage terms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale from 1 = not at all, to 5 = ver y strong * there are no comparative data concer ning these items Source: Opinion poll on corporate citizenship of companies in Germany
  • 36. 36 Investing in the Future of Corporate Citi- In this context, illustration 17 indicates that those zenship companies which do not expect investments to remain at their present level tend, by and large, to incline towards investing more in corporate A majority of all the companies which replied, c i t i z e n s h i p m e a s u r e s, e s p e c i a l l y i n f i n a n c i a l more than 70 per cent overall, reports that their terms. While just 10 per cent of businesses begin future CC investment will stay roughly at current to limit their financial commitment, twice as levels. This assessment by the businesses pol- many expect to raise their budget for corpora- led refers to both cash gifts and donations in te citizenship. kind and the use of own staff for community commitment. Amazingly, a large number of small and medi- um-sized businesses expect to increase their This unequivocal result is either due to the expec- funds for civic involvement in the future. Large- tation that available resources for corporate scale businesses, by contrast, tend to focus citizenship will remain limited, or it may indica- more on using gifts in kind for their commitment t e a n o n g o i n g h e s i t a t i o n, a n d i n a d e q u a t e l y efforts. Development potential for corporate and/or insufficiently detailed assessment of the v o l u n t e e r i n g i s r e c o g n i z e d p r e d o m i n a n t l y, relevance of corporate citizenship and the though with few genuine differences, by medi- opportunities it opens up. um-sized enterprises. Fig. 17: Future investment into corporate citizenship Future Investment in Corporate Citizenship 0,8 increasing 9,6 unchanged Cash donations decreasing 70,2 don’t know 19,4 1,8 8,2 Donations in kind 78,4 11,6 1,6 9,0 Corporate volunteering 77,6 © CCCD 2007 11,8 In percentage ter ms 25 50 75 Source: Opinion poll on corporate citizenship of companies in Germany
  • 37. 37 VI. Summary of Results The sur vey of 500 German companies makes ty commitment can have a direct impact on one thing ver y clear: German companies are economic success, and only12 per cent of Ger- aware of their social responsibility. They com- man businesses associate corporate citizenship mit to society at large in a range of different with the objective of improving the bottom line. areas, using a wealth of measures and types of This attitude marks a vast gap when compared a c t i v i t y, t h e i r c o m m i t m e n t v a r y i n g w i d e l y i n to the answers given by the US companies sur- intensity and duration. Social responsibility is veyed, with 84 per cent of large enterprises rela- deeply embedded within German corporate ting corporate citizenship to their business suc- culture. Internal factors, such as relating their cess in a positive vein. It is possible the stated commitment to corporate culture and traditi- US belief in public involvement is at least par- ons, play a more vital role than external fac- tially more in tune with entrepreneurial interests tors, such as customer expectation or even state than is the case in Germany, because public regulation and political measures. expectations as well as those of potential cus- tomers have been factored in, so that business But the sur vey also shows ver y clearly that there relevance becomes apparent. By contrast, neit- is still a great deal of unexploited potential for her the German public nor German customers German companies to face up to their social have so far evinced any particular expectati- responsibility and use it inter alia for the bene- ons of corporate citizenship. Thus German com- f i t o f t h e e n t e r p r i s e. D e s p i t e 9 6 p e r c e n t o f panies as a whole have as yet only developed respondent companies reporting corporate citi- rudimentar y ideas of a win-win strategy. But a zenship activities, a closer look at their size and process of rethinking can be expected, becau- scale shows that in the main their activity is se consumer focus on matters such as the sustai- r e a c t i v e. T h a t m e a n s t h e y p r e d o m i n a n t l y nability of products and ser vices as well as the respond to applications; above all by providing integration of corporate social per formance is material or cash gifts, followed by supporting increasingly impacting decisions to purchase, staff members for volunteer work and providing even in Germany. ser vices. Less than 40 per cent of respondent companies are actively looking for areas and Social responsibility and economic performance issues, even fewer orient their engagement to need not be mutually exclusive, as the larger achieve measurable targets. This reveals an businesses in Germany in particular have begun even greater potential for development. Inste- to understand. They also adopt a more offen- ad of reacting to requests, companies can assu- sive approach to their engagement, in accor- me an active role, developing their own ideas, dance with the motto “do good and talk about concepts and perspectives which match their it ”. In this way they are taking the lead in brea- core business, and thus allow a more targeted king the established pattern under which cor- cooperation with external partners. porate citizenship is philanthropic behaviour and, best case, a decorative accessor y in suc- Most firms in Germany are still far removed from cessful business per formance. The occasional- making corporate citizenship an essential part ly voiced criticism that public involvement is of their corporate strategy and communicati- simply a tool used to obtain legitimacy vis-à- on within an integrated concept. Only 40 per vis an increasingly critical public, and as camou- cent of those polled recognise that communi- flage for ever tougher business practices, falls
  • 38. 38 flat. The really offensively corporate citizenship- te to the overall profit development of the com- focused businesses in particular can only enhan- panies - another indicator that corporate citi- ce their image if all their business strategy is zenship is not seen to be a calculated part of credible and if there is no loss of trust. Ever y the business activities. new glossy report, ever y award given amid the glare of cameras, puts executives on the spot Looking at the list of priorities in terms of areas and makes them more accountable. and issues for engagement shows that these are relatively close to “ hard ” business interests, Most companies put their corporate citizenship both in Germany and the US. While it would be commitment in a context of cooperation with premature to apply the motto “ the more com- one or more partners. This means primarily col- munity commitment benefits genuine business laboration with local volunteer organisations interests, the better ”, one can obser ve a gene- (clubs, projects, initiatives). But other sectors ral trend in this direction. Lasting corporate invol- can also act as partners in community involve- vement will happen only if and when corpora- ment, such as state (educational facilities, e.g. te citizenship can be made a “ business case”. nurser y schools and schools, administration, Such corporate commitment is more urgently government at county and regional level), the needed than ever before, in the face of major market (e.g. other companies), and the third social challenges accompanied by increasing- sector (e.g. charities, international aid organi- ly limited financial room for manoeuvre on the sations). corporate citizenship measures have part of the state. Perhaps politically-induced a strong focus on the local environment of a communication can help overcome the gap business. A significant finding concerns the fact between the positive attitudes towards corpo- that more than one German business in three rate citizenship held by German companies, (41 per cent), declines to cooperate with part- and the things they actually do. On the one ners from other sectors in society. This wastes hand, the funds available and the way in which the entrepreneurial efficiency increase oppor- these resources are employed for community tunity which civic involvement could yield. commitment are rather modest, while on the other hand large businesses in particular report In general investment for community commit- ver y positive balance sheet results – making ment amounts to sums which in Germany ave- optimisation of commitment desirable, last but raged less than 50,000 Euros per company in not least to close the credibility gap which 2005. Despite this, large-scale businesses do threatens to loom large. This gap might grow if invest significantly more than 100,000 Euros in the corporate citizenship claims, and the self- societal stewardship. Even given the fact that image propagated by businesses, correspond individual business investment clearly exceeds less and less with the ever yday business of enter- the one million Euro limit, the funds committed prises, and with the means and rules of their to corporate citizenship clearly do not correla- corporate citizenship programmes.
  • 39. Publisher CCCD – Centrum für Corporate Citizenship Deutschland e.V. Kollwitzstraße 73 10435 Berlin www.cccdeutschland.org Author Dr. Frank W. Heuberger Member of the Executive Board of the CCCD frank.heuberger@cccdeutschland.org Design Nepenthes Digital Media Ser vices www.nepenthes.biz Berlin, 2007 This sur vey was produced with the kind support of forsa. Gesellschaft für Sozialforschung und statistische Analysen mbH (Society for Social Research and Statistical Analysis), Deutsche BP AG, and UPS