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Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical
stakeholders?
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
Growing interest of NGOs for the business: attempt to
improve environmental and social context by influencing
the level of CSR
In the perspective of the stakeholder theory, are NGOs
able to be critical stakeholders?
Mitchell et al. (1997): legitimacy , urgency and power
NGOs often don’t have the power to directly influence the
firm’s financial and competitive performance
The indirect strategies (Frooman, 1999): NGOs acting
through an ally that can threaten to withhold its resources
Traditionally two main stakeholders targeted: the national
government and the consumers
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
a)
The government
Different objectives of the NGO’s lobbying activities:
Enforceable national and international legal obligation directly imposing social
standards or disclosure to the corporations
Regulation indirectly persuading the corporation to adopt higher CSR standards
strengthening or influencing other stakeholders (unions, consumers
associations, institutional investors, etc.)
In general NGOs are quite weak in influencing the public policies
Government’s action tend to be less effective because of globalization
b)
The MNCs escape both the international e the national law
The consumers
Documentation of abuses and moral shaming are useful only if they really
influence consumers behaviour
Consumers’ action has demonstrated to be often too weak
Consumers are in general not very interested and informed about CSR and have
a short memory
Only few successful boycotts
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
Emerging influencing strategies. In search of others
stakeholders-allies: shareholders and executives
a) The shareholders: they own an essential resource
and can choose the exit option
Different tactics used:
•
•
•
Shareholder activism (NGOs become shareholders)
Partnership whit SRI; collaboration in social and ethical
screening
Persuasion of traditional institutional investors to adopt a
social screening by emphasizing financial risks associated with
social and environmental poor performance
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
b)
The executives: from confrontational strategies to engaging
and collaborative strategies
Support in voluntary CSR and advocacy of social accounting and
independent verification schemes: versus self-compliance
From the CRM to the cooperation in dealing with firm’s specific
social and environmental issues
The collaboration between NGOs and business in defining higher
standard in case of absence or insufficient regulation of global
social issues: versus a “civil regulation” (the Forest Stewardship
Council)
Engagement NGOs need the confrontational ones demonstrating
to be able (even in a few cases) to damage the corporate
reputation and the brand name (CorpWatch)
•
The interaction with the mass-media: visibility only for few big NGOs
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
1)
The effectiveness of the NGOs strategies and the core resources: funds,
legitimacy and information
Fund rising and dimension’s growth: the ability to intervene on global issues
requires global dimensions
•
•
2)
Private and public donors
The risk of conflicting interests when engaging with the business (NGOs “selling” legitimacy
for subsidizing: greenwash and bluewash)
The public subsidizing and the autonomy in defining objectives and ways of intervention
Trade-off between dimensional growth and maintenance of independency?
In search of new instruments to protect independency (Charity SRI: donor and
partner screening)
The maintenance of the legitimacy
The legitimacy of the claims: a cost/benefit evaluation (i.e. child labor vs.
prostitution)
The cultural legitimacy: the ethical hegemony of the Northern NGOs
The internal legitimacy: the need for improving governance and democracy (which
accountability for the NGOs? Who is the “principal”?)
The legitimacy of the reputation: the violent no-global movement
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
3)
The information as strategic resource: the influence on the
stakeholders-allies depends on the ability to obtain, process and
diffuse information
Obtaining information
•
•
The ability to understand the corporate social disclosure
The ability to show “double standards” and to obtain information about the
MNCs operations in the developing countries: the role of the Southern NGOs
and the transnational networks
Processing information
•
•
The screening to verify information’s reliability
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–
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The NGOs reputation depends on the quality and the trustworthiness of the
information they provide
The reputation of the partners for the reliability of the information
The importance of the relationship with an international scientific network
Combining pieces of information to turn them in a global message
Diffusing information
•
•
Only few and well known NGOs can access the mass media to obtain a global
resonance
To carry information to the others stakeholders
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia
NGOs and CSR:
which strategies to become critical stakeholders?
The needs to develop new competences to engage with
shareholders, executives and others NGOs
Competences in processing accurate information in a global context
and in communicating with mass media and other stakeholders
• Competences in scientific fields to engage with scientists
Competences in finance and in CSP measurement to engage with
shareholders
Competences in management to engage with executives
Competences to improve NGOs governance and accountability
Competences in promoting and managing transnational networks
between NGOs (specially Northern and Southern) and with other
private and public actors
How to develop new competences without loosing ethical value
(professionals or volunteers?)
Corporate and Stakeholder Responsibility. Theory and Practice
Milan, 22-23 May 2008
Cecilia Chirieleison
University of Perugia