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Ivan Tri Bramantyo / 2012 190652

Global corporate citizenship

The term corporate citizenship broadly refers to putting corporate social responsibility

into practice. It entails proactively building stakeholder partnerships, discovering business

opportunities in serving society, and transforming a concern for performance into a vsion of

integrated financial and social performance.

As companies expand their sphere of commercial activity around the world,

expectations grow that they will behave in ways that ingance the benefits and minimize the

risk to all stakeholders, whereever they are. Global corporate citizenship is the process of

identifying, analyzing, and responding to companys social, political, and economic

responsibilities as defined through law and public society, stakeholder expectation, and

voluntary acts flowing fromcorporate values and business strategies.

In order to become leading citizens of the world, companies must establish

management proccesses and structures to carry out their citizenship commitments. The goal

of CSR management system is to integrate corporate responsibility concern into a companys

values, culture, operations, and business decisions at all levels of the organizations.

Companies have broadened the job of the public affairs office to include a wider range of

tasks. Others have created a departement of corporate citizenahip to centralize under common

leadership wide-ranging corporate functions.

Companies dont become a good corporate citizen overnight. It takes what it called 5

stages. First is elementary stage, in this stage, managers are uninterested and uninvolved in

social issues. Second is engage stage, in this stage, companies typically become aware of

chaning public expectations and see the need to maintain their license to operate. Third is

innovative stage, organizations may become aware that they lack the capacity to carry out

new commitments, prompting a wave of structural innovation. Fourth is integrated stage, in

this point, companies see the need to build more coherent initiatives. The last stage (fifth) is

transforming stage, companies at this stage have visionary leaders and are motivated by a

higher sense of corporate purpose.

A social performance audit is a systemic evaluation of an organizations social,ethical,

and environtmental performance. Standards to judge corporate performance have been

developed by a number of organizations. These are include the ISO, the global reporting

initiative social accountability, and the institute of social and ethical accountabilitys, etc.

in addition to formal social responsibility reports, organizations have turned to other

social reporting methods to communicate with their stakeholders.

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The Challenges Of Globalizations

Globalizations refers to the increasing movement of goods, services, and capital across

national borders. Globalizations is a process, that is, an ongoing series of interrelated events.

Firms can enter and compete in the global marketplace in several ways. Many companies first

build a successful business in their home country, then export their product or services to

buyer in other countries.

Global commerce has taken place for hundreds of years, dating back to the exploration

and colonization of africa, asia,and the americans by europeans beginning in the 15th

century.

Global commerce is carried out in the context of a set of important international financial and

trade institutions.the world bank was set up in 1944 to provide economic development lian to

its member nations. Its main motivations at that time was to help rebuild the war-torn

economics to europe. World Trade Organization founded in 1995 as a successor to the

general agreement on tariffs and trade.

Globalizations is highly controversial. One need only look at television coverage of

angry protests at recent meetings of the WTO, World Bank, and internation monetary fund to

see that not all people and organizations believe that globalization holds tremendous potential

for pulling nations out of poverty, spreading technological innovations, and allowing pople

everywhere to enjoy the bounty generated by modern business.

The benefits of globalizations is that globalizations tends to increase economic

productivity. That means, simply, that more is produced with the same effort. Comparative

advantage can come from a number of possible sources, including natural resources, the

skills, educations, or experience of a critical mass ofpeople,or an existing production

infrastructure. Globalization also tends to reduce prices for consumers. For developing

world,globalization also brings benefits. It helps entrepreneues the wold over by giving all

countries access to foreign investment funds to support economic development.

One of the cost of globalization is job insecurity. As business move manufacturing

across national borders in search f cheaper labor, workers at home are laid off. Also, weakens

environmental and labor standards, prevents individual nations from adopting policies,

promoting environmental or social objectives, erodes regional and national cultures and

undermines culture, linguistic, and religious diversity.

The many nationsof the world differ greatly in their political, social, and economic

systems. One important dimension if this diversity is how power are exercised, that is,the

defree to which a nations people may freely exercise their democratic rights. Democracy

refers broadlu to the presence of political freedom.

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Business-Government Relations

It is difficult for Westerners, and perhaps for the Chinese themselves, to grasp the

changes in Chinas business sector in the brief time period of the last thirty to thirty-five

years. Since the death of Mao Zedong, the ascendancy to power of Deng Xiaoping, and the

opening up at an accelerating pace of the Chinese economy to global trade and investment

flows, not only has Chinas GDP grown at truly unprecedented rates for such a large

economy, but the structure of the economy has changed dramatically as well. It has long been

assumed that a free market system must go hand-in-hand with a political democracy. But

China is challenging that theory by allowing its economy to develop in what has many of the

appearances of a capitalistic economy, all the while maintaining a very authoritarian and

powerful Communist central government.

In the developed countries of North America and Western Europe advocacy groups

play a critical role in the interdependency of the business and civil society spheres. Across the

spectrum of corporate social responsibility issues consumer issues, environmental issues,

human rights, governance, etc. there are voluntarily-formed advocacy groups that serve as

unofficial watchdogs and, often, organizational whistle-blowers, ready to raise a red flag of

criticism if the corporation strays onto a path or into a policy deemed inappropriate by the

group. Whether large, powerful, and well-funded organizations like AARP or much smaller,

more tightly focused ones like the Rainforest Action Network, the thousands of advocacy

groups in the West are an established and important part of the dynamic between business

and the broader society.

As noted above, it is the opening up of the Chinese economy that has gained the

worlds attention in recent years. Direct foreign investment is not only allowed but

encouraged, albeit with plenty of bureaucratic conditions still attached. Now, it is not unusual

for businesses to be owned privately, ownership shares are publicly traded on functioning

exchanges, product, manufacturing, capital, and labor decisions are made without a mandate

from the government. Still, it is important to remember that Chinas brand of free-market

capitalism does not yet approximate capitalism in the West. Many businesses even now are

owned and controlled by the government, which may also hold significant ownership stakes

in many other businesses which are nominally privately owned. Such stakes may not be

obvious at first glance; they may be held by provincial or local governments or by

government controlled agencies.