Your SlideShare is downloading. ×
Globalisation and CSR - grounding of Norwegian companies in local context
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Globalisation and CSR - grounding of Norwegian companies in local context

155
views

Published on

Geo 324 - Master class in Globalisation and corporate strategies

Geo 324 - Master class in Globalisation and corporate strategies


0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
155
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Grounding of global business – the case of Norwegian companies in Indonesia Tarje I. Wanvik
  • 2. Background !  1990s: mobilisation within humanitarian student organisation !  2000s: Head of advocacy division: campaign activist with speciality within CSR and corporate conduct in poor countries: "  Coffee, water, sugar, agriculture "  Weapon production, export and marking/tracing "  Textile "  Trade rules and regulations, foreign debt, !  2008-2010: private business, focus på CSR consulting and strategy development communication and fund raising. !  2011-2013: Master in Geography: CSR and Norwegian companies in Indonesia
  • 3. Filling the gap Activism Consulting Research
  • 4. “Anything can be located anywhere”
  • 5. “Every firm, every economic function is – quite literally, grounded in specific locations”
  • 6. Motivation Access to (cheap) semi skilled / skilled labour Access to cheap unskilled labour Access to Indonesian / South East Asian consumer market Access to natural resources Profitable regulatory framework
  • 7. “Localised” risks 0% Corruption Bureaucracy Political instability Economic instability Regulatory issues Safety issues Environmental issues Workers rights' issues Competition issues Other 20% 40% 60% 80% 100% 120%
  • 8. “Localised” risks 0% Corruption Bureaucracy Political instability Economic instability Regulatory issues Safety issues Environmental issues Workers rights' issues Competition issues Other 20% 40% 60% 80% 100% 120%
  • 9. Presentation, part 1 !  Research questions !  Empirical and theoretical sources and definitions Part 2 !  What do I see? (CSR law, CSR practice) !  Why do I see this? (motivation, target groups, objectives) !  Discussion: attachment versus detachment forces and strategies and grounding effects.
  • 10. Research question Can Corporate Social Responsibility work as a catalyst for grounding foreign companies to local communities in Indonesia?
  • 11. Empirical sources 1.  CSR law of 2007, article 74 2.  9 Norwegian companies and their CSR activities 3.  Stakeholders and other relevant actors 4.  Documents: web pages, articles, internal presentations, strategy papers, evaluations etc.
  • 12. Theoretical entry points !  Theories of place and globalisation !  Network and power theory !  CSR and stakeholder theory
  • 13. What is place? !  Three-part definition of place (Agnew) "  Location (where; longitude, latitude, relative) "  Locale (what; material context of social life: buildings, roads, parks, fields, social relations) "  Sense of place: (how; the way in which place is given meaning) !  Place interweaves all three realms and cannot be reduced to any of them (Sack)
  • 14. Community = place !  Many spatial corresponding characteristics: "  Tolerance (Walzer 1997) "  Reciprocity (Putnam 2000) "  Trust (Grimen 2009) !  Closely linked to Social Capital (Bourdieu 1991): "  Networks, norms and trust facilitate cooperation
  • 15. Space vs Place !  Investing in a place (Tuan)
  • 16. Assemblages !  Assemblages (DeLanda 2006) "  Material, immaterial and representational "  Components brought together "  Product of historical process "  Unique and singular individuals (communities, organisations, atoms, species, ecosystems etc.) "  Own capacities and tendencies: new parts can enter, assemblage can constitute new relations
  • 17. Assemblages Connects material to expressive !  Connects territorialisation with deterritorialisation !  Places have !  "  Material aspects (topography, texture) "  Expressive aspects (sense of place) "  Territorial aspects (political boundaries, labelling, mapping, place promotion, naming etc.) "  De-territorial aspects (capital flight, communication tech, mobility)
  • 18. Harmony VS Conflict !  Putnam criticised !  Place is ”saturated with notions of power” (Cresswell 2011, Amin 2002) !  A zero sum-geography: centre-periphery (Ong, Massey)
  • 19. What is power? !  Reward power !  Coercive power !  Legitimate power "  Position "  Reciprocity "  Equity "  Responsibility !  Referent / Expert power
  • 20. Power as potential !  Possessed by virtue, by role or organisation (Norwegian companies by default in Indonesia) !  Zero-Sum games and spatial division of power (Massey, Allen) !  Scales (Global vs local) !  Not all places can be winners
  • 21. Power as mobilising of resources !  Power is a resource to achieving diverse ends (Allen, Giddens, Thrift) !  Power to, not power over !  Pooling of resources !  Power as a fluid medium !  Power as a networked concept (Amin and Thrift 1994)
  • 22. What is a stakeholder? !  critical to the company's goals, either directly or indirectly !  directly or indirectly affected by the company’s operations, and !  form the social and geographical framework that companies operate within. !  Critical issue: power relation between stakeholder and company
  • 23. An example Governments Local Community Organizations Owners Consumer Advocates Suppliers Firm Environmentalists Customers Competitors SIG Employees Media Figure 3 Stakeholder view of firm (Freeman 1984, p.25)
  • 24. Primary or secondary has been drawn according to Freeman to show that there are no possible linkages by arrows between external stakeholders and a “firm” (Fassin 2008). Governments Environmentalists Local Community Organizations Environmentalists Owners NGOs Suppliers Financiers Consumer Advocates Suppliers Suppliers Employees Financiers Governments NGOs Firm Firm Environmentalists Governments Employees Customers Company using CSR Customers Customers Competitors SIG Employees Media Figure 3 Stakeholder view of firm (Freeman 1984, p.25) Critics Communities Media Communities Critics Others Others Figure 4 Freemans adapted version of the stakeholder model from 2003 (Fassin 2008, p.115) According to Freeman (1984) the aim of the stakeholder theory is to improve the nderstanding and relationship between a company and its stakeholders. If aCarroll (Nygaard & Bengtsson 2002) among others (Grafstöm et al 2008) divide a compacompany’s stakeholders into primary and secondary groups, whereas the primary y is successful with satisfying their closest stakeholders, the company can gain ong-term economical benefit as well as competitive advantages. stakeholder can be seen as vital for a company’s survival, usually customers, employees, owners and suppliers. According to Carroll (Nygaard & Bengtsson 2002) .5.1 Refined Stakeholder Theory categorizing stakeholders into primary and secondary groups will make it possible takeholders making increasing demands on a company, and companies have differfor a company to aim its strategic actions towards the stakeholder and be able to fulnt kind of responsibilities towards its stakeholders and its action affects thefill that particular stakeholder’s demand. If a company fails to satisfy these demands, surounding environment. The theory is a useful guide when a company is to identify et al (2008) argue that the company will not survive. Grafström aluable stakeholders who might be of importance for a company’s CSR perfor- Media Figure 5 CSR-company and Stakeholders Model (authors own version 2009), based on Freemans adapted version of the stakeholder model from 2003 (Fassin 2008, p.115) 3.5.3 Primary stakeholders Communities Communities can be described as the surrounding society wherein a company performs its CSR activities. The community often expects something in return from the company in order to accept and give them legitimacy. Generally in developing countries companies give something back by employing local people in remote and rural areas (Carroll 1998; Garriga & Melé 2004; Porter & Kramer 2006).
  • 25. Stakeholder network relations Community Employ ees Media Owners Corp. Selskap Suppliers NGOs Customers Subcon tractors
  • 26. Stakeholder differenciation 1.  Dormant stakeholder POWER 2.  Discretionary stakeholder 1 5 URGENCY 3 7 6 3.  Demanding stakeholder 4.  Dormant stakeholder 4 5.  Dangerous stakeholder LEGITIMACY 2 6.  Dependent stakeholder 7.  Definitive stakeholder
  • 27. What is CSR? !  CSR is the commitment of businesses to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for business, the sustainable development agenda, and society at large
  • 28. Methodology 1.  Document analysis 2.  Interviews 3.  Key informants 4.  Field visits 5.  Survey 6.  Participatory observation
  • 29. Presentation, part 2 !  Research questions !  Empirical and theoretical sources and definitions Part 2 !  What do I see? (CSR law, CSR practice) !  Why do I see this? (motivation, target groups, objectives) !  Discussion: attachment versus detachment forces and strategies and grounding effects.
  • 30. Law 40 / 2007, article 74 1.  Limited liability companies in natural resource sectors (or connected with natural resources) are obliged to implement Corporate Social and Environmental Responsibility. 2.  Corporate Social and Environmental Responsibility, represents a responsibility of a limited liability company that is budgeted for and calculated as an expense of that company, 3.  Limited liability companies that do not implement their obligation will incur sanctions in accordance with the provisions of legislative regulation. 4.  Further provisions will be laid down in a Government Regulation (Peraturan Pemerintah).
  • 31. “The intention of the law is to create a relationship between companies and the environment, values, norms, and culture of local communities that is harmonious, balanced and appropriate” Elucidation to art. 74, law 40/2007
  • 32. CSR activities Do your company engage in CSR activities? (N=9) Yes No
  • 33. CSR activities 0% Rights promotion Labour union facilitation Environmental projects Educational projects Health projects Other social projects Other 10% 20% 30% 40% 50% 60% 70% 80% 90%
  • 34. “It is only the local people and the local communities that are the target groups of our CSR work. Local government is not a target”. “Concerning stakeholders, we are looking for the ones that are the needy” (CEO, Company B)
  • 35. Stakeholders 0% Owners Workers Shareholders Subsidiaries Under-subsidiaries Indonesian media International media Norwegian media Local NGOs International NGOs Norwegian NGOs Local government Regional government National government Norwegian authorities, including Customers Indonesian consumer market International consumermarket Norwegian consumer market Other 20% 40% 60% 80% 100% Primary stakeholders All stakeholders
  • 36. Stakeholders 0% Owners Workers Shareholders Subsidiaries Under-subsidiaries Indonesian media International media Norwegian media Local NGOs International NGOs Norwegian NGOs Local government Regional government National government Norwegian authorities, including Customers Indonesian consumer market International consumermarket Norwegian consumer market Other 20% 40% 60% 80% 100% Primary stakeholders All stakeholders Local communities
  • 37. Stakeholders 0% Owners Workers Shareholders Subsidiaries Under-subsidiaries Indonesian media International media Norwegian media Local NGOs International NGOs Norwegian NGOs Local government Regional government National government Norwegian authorities, including Customers Indonesian consumer market International consumermarket Norwegian consumer market Other 20% 40% 60% 80% 100% Government Primary stakeholders All stakeholders
  • 38. “It is not easy to do business in Indonesia now. Before, Suharto and his inner circles were the only real stakeholders. Today, there are so many more stakeholders, and they are not easy to please. But you need their signature”. (Publish What You Pay Indonesia)
  • 39. “We have very little contact with the Indonesian authorities, and quite frankly we try to avoid it as much as possible” (CEO, Company H)
  • 40. Stakeholder management CSR Company B Local Government Local Community BP Migas National government GLOBAL LOCAL
  • 41. “Sub district head and local government give positive feedback on projects, and refers to our company as “best practice” in meeting with both the local communities and other stakeholders in the area” (CSR adviser, Company B)
  • 42. Triangulation Company B Local Government BP Migas Local Local Community community National Government
  • 43. Stakeholder management C CSR Company C CSR Workers Local government Local Community
  • 44. “ Our workers are by far the most important stakeholder of this company, together with the surrounding communities. Our proactive relation to our workers and their communities gives us leverage in the re-occurring demonstrations towards this industrial estate. Protests have made us proactive” (CEO, Company C)
  • 45. “We do CSR projects, and we like to see our name on the project. This is documented in our tenders, and that is very important. CSR is part of the tender selection of the government” (CEO, Company A)
  • 46. “Local government bodies are very worried about community impact. Unrest is the last thing they want. There is a strong pressure that we conduct various levels of socialisation” (CEO, Company F)
  • 47. Eksternal and internal influence Attachment forces (external) Detachment forces (external) Attachment strategies (internal) Detachment strategies (internal)
  • 48. Eksternal and internal influence Attachment forces (external) Detachment forces (external) CSR Law Standard Operational Prosedure Tenders Competence transfer Attachment strategies (internal) Detachment strategies (internal)
  • 49. Eksternal and internal influence Attachment forces (external) Detachment forces (external) CSR Law Standard Operational Prosedure Tenders Competence transfer Attachment strategies (internal) Profile reports, CSRrecommendations Local staff handling CSR and Government relations** Local recruiting CSR reports Detachment strategies (internal)
  • 50. Eksternal and internal influence Attachment forces (external) Detachment forces (external) CSR Law Corruption* Standard Operational Prosedure (Protectionism) Tenders (Bureaucracy) Competence transfer Attachment strategies (internal) Profile reports, CSRrecommendations Local staff handling CSR and Government relations** Local recruiting CSR reports Detachment strategies (internal)
  • 51. Eksternal and internal influence Attachment forces (external) Detachment forces (external) CSR Law Corruption* Standard Operational Prosedure (Protectionism) Tenders (Bureaucracy) Competence transfer Attachment strategies (internal) Detachment strategies (internal) Profile reports, CSRrecommendations Lack of CSR strategies and plans Local staff handling CSR and Government relations** Weak ownership to CSR internally Local recruiting Absence of vital stakeholders CSR reports Negative sentiments towards locals Local staff handling CSR and Government relations**
  • 52. Eksternal and internal influence Attachment forces (external) Detachment forces (external) CSR Law Corruption* Standard Operational Prosedure (Protectionism) Tenders (Bureaucracy) Competence transfer Attachment strategies (internal) Detachment strategies (internal) Profile reports, CSRrecommendations Lack of CSR strategies and plans Local staff handling CSR and Government relations** Weak ownership to CSR internally Local recruiting Absence of vital stakeholders CSR reports Negative sentiments towards locals Local staff handling CSR and Government relations**
  • 53. Stages of Corporate Citizenship Elementary Engaged Innovative Integrated Transforming B C A E G H D I F (“The Paradoxes in Communicating Corporate Social Responsibility,” Sandra Waddock and Bradley K. Googins in “The Handbook of Communication and Corporate Social Responsibiliy” – Øivind Ihnen, Jennifer L. Bartlett and Steve May [eds.], 2011)
  • 54. Integrated Carefully selected programs in order to contribute in the most efficient way for the benefactors Carefully selected programs in line with core activities in order to manage relevant stakeholders Passive Altruism Active Selfinterest Randomly selected projects or partners to avoid attention, often international NGOs. Randomly selected projects in order to please close stakeholders Elementary
  • 55. Integrated Carefully selected programs in line with core activities in order to manage relevant stakeholders Carefully selected programs in order to contribute in the most efficient way for the benefactors B Passive Altruism A Randomly selected projects or partners to avoid attention, often international NGOs. C Randomly selected projects in order to please close stakeholders E Active Selfinterest G H F I Elementary D
  • 56. CSR law and its consequences Law Sanctions Stakeholder mapping Plan & budget Resource transfer Tenders Contact SOP Expectation CSR activity CSR reporting Corruption Grounding
  • 57. “To us, CSR is a social investment strategy” “I would claim that CSR curb inquiries of bribes and other forms of corrupt practices”. (CEO, Company B)
  • 58. Research questions Can Corporate Social Responsibility work as a catalyst for grounding foreign companies to local communities in Indonesia?
  • 59. “CSR ties our company to the local communities. And vice versa. We build common trust and tolerance of each other’s different roles and responsibilities. It is like with friends: you have to get to know them before you can do something together” (CEO, Company B)
  • 60. Thank you for your attention! Tarje I. Wanvik tarje.wanvik@geog.uib.no +47 970 70 987