Cecilia Chirieleison University of Perugia

1
Cecilia ChirieleisonUniversity of Perugia

• NGOs and CSR
• which strategies to become critical stakeholders?

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
2
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 dont have the power to directly
  influence the firms 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

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
3
NGOs and CSR which strategies to become
critical stakeholders?

• The government
• Different objectives of the NGOs 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
• Governments action tend to be less effective
  because of globalization
• 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

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
4
NGOs and CSR which strategies to become
critical stakeholders?

• Emerging influencing strategies. In search of
  others stakeholders-allies shareholders and
  executives
• 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

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
5
NGOs and CSR which strategies to become
critical stakeholders?

• 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
  firms 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

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
6
NGOs and CSR which strategies to become
critical stakeholders?

• The effectiveness of the NGOs strategies and the
  core resources funds, legitimacy and information
• Fund rising and dimensions growth the ability
  to intervene on global issues requires global
  dimensions
• 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

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
7
NGOs and CSR which strategies to become
critical stakeholders?

• 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 informations reliability
• 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

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008
8
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?)

Cecilia Chirieleison University of Perugia
Corporate and Stakeholder Responsibility. Theory
and Practice Milan, 22-23 May 2008