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Corporate Volunteering as Tool for Human Resource Development

An innovative Corporate Citizenship approach on the example of Erste Group

Master's Thesis 2011 100 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Table of Contents

I. INTRODUCTION
A. Relevance
B. Research question & methods
C. Outline

II. CORPORATE VOLUNTEERING - AN INNOVATIVE APPROACH OF CORPORATE CITIZENSHIP
A. Corporate Citizenship (CC) - The conceptual frame
1. The parameters ofthe 21st century
2. Whatis Corporate Citizenship?
3. Different conceptions of CC
B. Corporate Volunteering (CV)
1. Whatis Corporate Volunteering?
2. CV in the US and in German-speaking countries
3. Reasons and strategy for applying CV
4. Types
5. Benefits
6. Critique

III. HUMAN RESOURCE DEVELOPMENT
A. Foundations of Human Resource Development
B. Creating competitive advantage through HRD
1. Needs assessment
2. How to satisfy an organization’s developmental needs
3. Evaluation and Transfer
C. New DEMANDSON HRD
1. Changes in the work sphere underlying HRD
2. The significance of ‘softer’ skills & emotional intelligence
3. Learning in Organizations

IV. THE SIGNIFICANCE OF CV IN HUMAN RESOURCE DEVELOPMENT
A. Practical Examples

V. EMPIRICAL STUDY
A. The case
B. Research Method
1. Qualitative interviews
2. Qualitative content analysis
C. Findings
D. Discussion

VI. CONCLUSION AND OUTLOOK

REFERENCES

Table of Figures

Figure 1: Carroll's Pyramid of Corporate Social Responsibility

Figure 2: The Setting of Employee Volunteering Programs

Figure 3: The Human Resource Wheel

Figure 4: HRD as interaction of person, team and organizational development

Figure 5: The functional cycle of HRD

Figure 6: Kirkpatrick's Model

Figure 7: CV’s sphere of influence

Figure 8: Erste Group's strategy

Figure 9: Steps for structuring content analysis

Figure 10: Ethics in Erste Group

I. Introduction

Live and work to make a difference, to make things better, even the smallest things. Give full consideration to the rights and interests of others. No business is successful, even if it flourishes, in a society that does not care for or about its people.

(Eugene C. Dorsey)

Corporate Social Responsibility (CSR) related topics are perceptibly on the rise - in the media[1], in advertisements, in academic education and research as well as in political discourse. Reasons for this trend are globalization with the associated increased power of corporations as well as the current financial crisis - i.a. caused by unethical corporate behavior - which led to a changing consumer attitude and a modified public opinion regarding corporate responsibilities. All of this forces companies to act more sustainably and responsibly in order not to lose their ‘license to operate’.

The ways in which companies can perform CSR are manifold. Typically these activities are aimed at achieving social, economic and ecological sustainability via the corporation’s actions, which is also referred to as the triple-bottom-line or three P’s (profit, people, and planet) (Elkington 1998).

Corporate Citizenship is also a term which keeps turning up in this regard and is often used as a synonym to or a subtype of CSR, meaning the societal engagement of a company in order to create a win-win-situation - for society as well as for the company itself (Habisch et al 2008). The Philosopher Ralph Waldo Emerson elucidates this approach declaring: ‘No man can help another without helping himself.’

Instruments to accomplish such a positive corporate behavior are for instance, Corporate Giving, Social Sponsoring, Cause-Related Marketing, Corporate Foundations, Social Commissioning and Corporate Volunteering (CV).

A. Relevance

Originating in the United States in the late 1970s, the phenomenon of Corporate Volunteering ‘has spread slowly but surely throughout the world’ (Allen 2003, 57) over the past 25 years and in the meantime not only in place at multinational corporations but also in indigenous companies (ib.). In Europe, CV has become an issue of increasing importance, particularly since the European Commission designated 2011 as the ‘European year of volunteering’. According to the European Commission, volunteering provides important learning opportunities and can lead to the achievement of new skills and competencies which can even improve people’s employability. (European Commission 2010)

Exactly this skill development is one reason why more and more companies these days conduct Corporate Volunteering programs. The qualities in question, which are honed through CV are manifold - depending on the type of service - and include interpersonal competencies like team-behavior, conflict management, leadership and communication skills as well as intrapersonal abilities such as project and time management, creativity and - more generally spoken - ‘soft’ skills (i.a. Vaidyanathan 2008, Peloza & Hassay 2006, Caudron 1994). Moreover, studies show that other benefits for companies typically lie in enhanced employee morale, satisfaction, commitment, loyalty and, additionally, an improved organiza­tional reputation/image, (i.a. Pajo & Lee 2010, Peloza & Hassay 2006, de Gilder et al. 2005, Zappalá 2004)

In this regard, Corporate Volunteering apparently has the potential of creating not only a win- win but a triple win situation since, apart from the company and the social institution, the employees are also supposed to benefit (Pinter 2006).

Although studies indicate that such activities are one of the fastest growing areas of philanthropic activity amongst businesses in UK, Western Europe and North America (Pajo & Lee 2010) there is still little academic research available (Benjamin 2007, Points of Light Foundation 2006, de Gilder et al. 2005). In this context, Benjamin (2007) states that [t]he relative inattention of academicians to corporate volunteerism is surprising given that so much research has been conducted about the other half of this equation [..., namely] the societal need for volunteers and the motivational characteristics of volunteers. (66 f.)

What academic research particularly has not focused on so far is the often mentioned but - in most cases - not discussed advantage for Human Resource Development (HRD), which is a quite obvious one in my opinion: Since the improvement and acquirement of knowledge and skills as well as - broadly speaking - the employees’ attitude towards their work and employer are central points in a company’s Human Resource Development activities, my thesis will concentrate on the implications of Corporate Volunteer programs concerning the development of new skills and attitudes.

B. Research question & methods

To extend scientific research on Corporate Volunteering, my thesis will further investigate this topic with a particular focus on its meaning for Human Resource Development.

Due to the still sparse academic efforts in this field, my research questions are of an explora­tory nature. The leading question, which I will try to answer in this thesis, is:

- Which opportunities does Corporate Volunteering offer for a company's Human Resource Development?

Related sub-questions ensue:

- Is Corporate Volunteering an appropriate instrument to hone employees’ soft skills and attitudes?
- Are people who undergo such a project aware of the new skills they develop?
- Is the development of new skills a reason for people to participate in a CV program?
- Do HRD-representatives consider Corporate Volunteering a relevant option for developing staff / (future) leaders?
- (How) Is Corporate Volunteering implemented in the business/CSR/HR strategy?
- How are the results of a Corporate Volunteering program evaluated?

The desired outcome of this thesis is to contribute to a deeper understanding of the rather new instrument of Corporate Volunteering. Moreover, it should establish a connection to the not yet very common advantages for Human Resource Development which would lead to a more conscious and fruitful deployment. Thus, this thesis will concentrate on the economic perspective of this phenomenon.

Given the mentioned current global developments and demands on businesses, it becomes obvious that this thesis is dealing with issues emerging mainly out of economic practice. Hence, it seems reasonable to include a practical survey in this work. Given that an empirical approach gathering quantitative data would not serve to answer the research question appro­priately, this investigation will consist of a qualitative case study conducted at Erste Group. One reason to apply a qualitative research strategy is that the examined objects will not be reduced to a few variables but that their complexity, individuality, identity as well as connec­tions, relations, background information and the context of the social setting can be retained and included in the analysis (Lamnek 2010, Mayring 2002, Kannonier-Finster 1998).

In order to better classify the resulting outcomes suitably, it is vital first of all, to provide a broad range of different perspectives and theoretical input concerning the topics in question. This extensive literature review should enable one to subsequently evaluate the concrete practical example. More precisely, the case study is conducted by using the method of quali­tative interviews, including several different perspectives on the respective subject. The views of four former participants in a long-term Corporate Volunteering program as well as of the CSR-representative and two human resource developer (who have undergone a short­time and a long-term CV program respectively) are therefore the central element of the empi­rical part. These are assessed by the method of (a reduced) structuring content analysis.

One limitation of qualitative research, in my case intensified by a case study approach, is that there cannot be deduced any generalizations from the findings. Thus, instead of speculating about generally applicable conclusions, this qualitative case study aims at gaining a more profound insight into the processes happening in the business world concerning CV activities. This will happen by illustrating one concrete example; more precisely the subjec­tive opinion of six interviewees will be taken into account (and one who answered selected questions via email) in detail. Certainly it would be interesting and more significant to extend the object of research by including a wider range of opinions, for instance the charitable institution’s and the participants’ direct superiors’ perceptions. However, for the scope and purpose of this study, highlighting the selected perspectives allows one to provide a suitable and meaningful insight into the topic.

C. Outline

The following thesis is basically divided into a theoretical illustration of the topics concerned, followed by a practical investigation to gain thorough knowledge of what the phenomenon of Corporate Volunteering implies in terms of skills development.

First, I will give an overview of Corporate Citizenship, beginning with reasons for applying this concept. Thereafter, I will dwell on its actual meaning and historical background, before singling out several (sometimes opposing) theoretical perceptions. Finally, the academic discussion about the possibility of corporations to be considered as citizens should comple­ment the picture.

Hereafter, the concept of Corporate Volunteering as one strategy for showing a corporation’s social responsibility will be introduced. One focus is put on disparities on the level of develop­ment between the cradle of all Corporate Social Responsibility related schemes, the United States, and German-speaking countries. This is followed by examining the different motiva­tions for deploying and taking part in CV programs and one of the associated main challenges in this field - strategic actions. Subsequently, different types of the initiatives will be presented before dwelling on the actual benefits for the company and for its main stake­holders, which in this case are the community and employees. Since there are always two sides of the same coin, the final part will deal with the dangers and negative effects this policy may imply - especially concerning the perceptions of NGO’s (Non-Governmental Organizations)[2].

The ensuing chapter will concentrate on Human Resource Development, creating a basic understanding of what this concept entails, which main tasks and goals it should fulfill and how competitive advantage can be achieved. Here, the different steps of HRD’s functional cycle are outlined. This is followed by highlighting the current socio-economic circumstances within which HRD has to operate, and which implications this has - especially concerning the emergent importance of new skills and modes of operating. Finally, the extensive field of learning in organizations and possibilities to do so will be introduced.

In the next chapter, the previous theoretical parts will be combined by presenting the meaning which Corporate Volunteering explicitly has for Human Resource Development. It will be pointed out why it is convenient for HRD to engage in this issue, which target groups it addresses and which requirements and crucial aspects should be taken into account when deploying a CV program. Various examples from the business world complement this chapter leading to the practical part of this thesis.

The empirical study embraces the presentation of the selected research object, Erste Group Bank AG, the description of the research method, namely qualitative interviews and a structuring content analysis as well as the illustration of the thereby resulting findings. These will also be discussed and compared with what is suggested in the literature.

Summing up, the conclusion, where the research questions will be answered and a short outlook will top off this thesis.

II. Corporate Volunteering - an innovative approach of Corporate Citizenship

A volunteer is a person who can see what others cannot see; who can feel what most do not feel. Often, such gifted persons do not think of themselves as volunteers, but as citizens - citizens in the fullest sense: partners in civilization.

(Anonymous)

A. Corporate Citizenship (CC) - The conceptual frame

Corporate Citizenship is not a new phenomenon but has a long tradition - especially in the US and the UK it is widely spread and deeply embedded in the respective culture. Nevertheless, also in German-speaking countries, outstanding entrepreneurs like Werner von Siemens and Robert Bosch can be found who engaged in their local communities as early as at the end of the 19th century and the 1920ies respectively. (Habisch et al. 2008) At that time, in most cases the reason for supporting societal issues was patronage, out of philanthropic conviction - ‘giving something back’ to society was like a moral responsibility to them. However, Corporate Citizenship in the modern sense rather embraces types of societal commitment which are set closer to the company’s core business. Apart from the social benefit, such engagement is then justified through the contribution to added value for companies, (ib.) In 2002 the concept was further boosted when a task force of World Economic Forum members signed the joint statement ‘Global Corporate Citizenship - The Leadership Challenge for CEOs and Boards’, among them 34 of the biggest multinational corporations, including Coca Cola, Deutsche Bank, Merck & Co., and McDonald’s (World Economic Forum 2002).

1. The parameters of the 21st century

In the last 20 years fundamental modifications in the social and economic framework have occurred. Some examples are the ongoing liberalization of the world trade and pioneering innovations in the information and communication technology (Habisch et al. 2008). The Internet - and the associated virtualization of many spheres - led i.a. to more transparency, offers more possibilities of control for consumers and became a mouthpiece for unsatisfied stakeholders in order to share their anger with - taken to its extreme - the whole world. This technical revolution also adds to increased global competition. Another profound process is the not yet weathered economic crisis as well as increased expectations and power of stake­holders concerning corporate behavior. (Habisch et al. 2008) Matten and Crane (2005) add that ‘globalization has reshaped the demands being placed on corporations’ (10). These and other changes in the societal and economic landscape have led to new motives and even the necessity for societal corporate engagement.

Hess et al. (2002) as well mention the rapid growth of internet technology as a primary cause why traditional sources of competitive advantage like financial capital, machinery, and loca­tion have receded into the background. They argue that therefore businesses have to look for new, hard-to-imitate and less tangible opportunities to create competitive advantage. In the course of globalization, the authors see Community Involvement Programs as a valuable means for a successful expansion when entering new and unfamiliar markets.

De Gilder et al. (2005) point out three factors through which the increased social responsi­bility of companies in western European countries may be explained: Firstly, more and more companies become aware of the economic advantages ‘being social’ entails. Secondly, they realize an increasing demand for social responsibility referring to the growing critical judgment of customers concerning the way in which corporations operate. With reference to Brammer and Millington (2003), the last point the authors cite is the increasing pressure on companies from the political and legislative environment. Furthermore, companies can use their resources as a potential comparative advantage over governments and non-profit organizations, which usually have to operate with quite limited budgets and act in their place so as to target certain social problems (Hess et al. 2002).

In the World Economic Forum in 2003 it was stated that in times of international insecurity and poverty, the reservations against globalization and mistrust concerning big corporations because of various big scandals, are on the rise. That is why pressure on business leaders to operate more value-oriented is increasing. In this respect, the outcome of a survey shows, that there is more behind the concept of Corporate Citizenship than pure compliance and philanthropy and that it is more and more treated as strategic matter relevant to executives and boards of directors. Yet, it is admitted that the majority is just at the beginning of realizing the potential of CC in a global context. (World Economic Forum 2003)

Activities vary from a very narrow scope of affecting only the local commonwealth at a company’s site, or rather certain groups within it, to - enhanced through globalization - a more global approach. (Herzig 2004)

2. What is Corporate Citizenship?

There are numerous approaches and terms referring to a company’s responsibility regarding society, economy and environment like Corporate Social Responsibility, Corporate Citizen­ship, Corporate Governance, Corporate Sustainability or Business Ethics. All these concepts do not have one universal definition or delimitation to the others; the areas they cover are blurred and overlapping and there are various attempts to conceptualize what is behind them - in practice as well as in theory. This makes the whole area a highly complex and problema­tic field. However, all of the mentioned terms refer to the constitution of a responsible relationship between corporations and society. Like stated in the World Economic Forum (2002) it is also not my aim to focus on specific definitions, but to emphasize that Corporate Citizenship and related concepts should not be an ‘add-on’ but essential to core business operations. Moreover, despite the absence of a clear formulation of what corporate respon­sibility is, the question of why and concerning whom (which stakeholders) companies should take responsibility over is central.

One definition of Corporate Citizenship can be found in the annex of a Green Paper published by the Commission ofthe European Communities in 2001 and reads as CC is [...] the management of the totality of relationships between a company and its host communities, locally, nationally and globally. (27)

Apparently, this definition is very broad, quite superficial and hence not very meaningful, since it does not state any detail about the nature of these relationships and which areas they cover. The only aspect which seems obvious to me is that according to this definition, CC rather deals with social than with ecological issues as it only mentions the communities. This feature is also stressed by Banerjee (2007) for whom one main element of CSR, namely environmental responsibility, is largely missing in the concept of CC, where the primary focus is put on employees and the local community. On the other hand, I think that since it is of course also highly relevant for communities how their inhabitants live, consequently also the ecological aspect of Corporate Citizenship may be included. This aspect is included in another definition by the Corporate Citizenship Research Unit at Deakin University in Australia (n.d.) ONLINE) where Corporate Citizenship is a recognition that a business, corporation or business-like organization, has social, cultural and environmental responsibilities to the community in which it seeks a license to operate, as well as economic and financial ones to its shareholders or immediate stakeholders.

Compared to the concept of CSR, for Braun (2010) using the term Corporate Citizenship expresses and emphasizes the addition in societal involvement of corporations. In his view, it is more about an institutionalized responsibility of companies than about voluntary social involvement in the community. In this context, Corporate Citizenship is regarded as an effort to connect a firm in manifold ways positively with the community in which it is operating.

In order to become a ‘good corporate citizen’, corporations conduct projects to solve or alle­viate relevant social problems, together with external partners. The capital invested does not only include funding but also other operating resources like employee engagement, access to logistics and networks, information etc. and is provided in a variety of ways. Apart from the contribution to social problem solving, also a substantial benefit for the company is achieved. (Habisch et al. 2008) Methods used in this respect are e.g. Corporate Giving, Social Spon­soring, Cause-Related Marketing, Corporate Foundations, Social Commissioning and Corpo­rate Volunteering.

This thesis’ understanding of Corporate Citizenship includes the social, ecological and eco­nomic responsibility of companies towards their stakeholders, the community and the environment in which they operate. These responsibilities are considered duties which have to be fulfilled in order to act as a good citizen. Therefore, they are strongly incorporated in a corporation’s strategy and, operatively speaking, refer to manifold activities - including finan­cial as well as human and other operating resources - which a firm undertakes in order to address societal and ecological issues in a companies’ sphere of action or even beyond that.

3. Different conceptions of CC

Friedman’s neoliberal view

In the opinion of the most outspoken proponent of the liberal, economic view, Milton Fried­man (1970), the only corporate responsibility is to provide maximum financial return to share­holders - a theory which is also called Shareholder Value Theory or Fiduciary Capitalism (Melé 2008). Therefore, social issues should not concern business people unless they are prescribed by law or increase shareholder value (ib.). In general, social problems are viewed as to have to be fixed by the government or resolve themselves by the free market system (Friedman 1970). The only ones who are entitled to decide over a company’s profit are the owners/shareholders. Moreover, Friedman (ib.) argues that it is not even possible for corpo­rations, which are artificial persons, to take over responsibility, since only individuals - thus the CEOs as private persons - are able to do that. They can invest their private money in whatever they want, in marked contrast to capital funds which is actually the shareholders’ money and they must not decide to use the money for anything else than for the final goal of profit maximization. However, Friedman’s statement - although often neglected - also includes that businesses have to conform ‘to the basic rules of society, both those embodied in the law and those embodied in ethical custom.’ (Friedman 1970, 122) Moreover, the Fried- manian view conveys that social issues may be addressed if they are in the name of profit, but since the consequences - in this case financial benefits - of social actions often are hard to determine, especially in the long run, and companies are not likely to engage in social issues anyway if they are nearly bankrupted, there can also be detected a justification of this view to some extent. For these two reasons, in my opinion, his whole argument looses a bit of its explosive nature.

Carroll - in favor of a corporation’s responsibility

Opposed to this still rather radical opinion, probably the most-cited scholar in favor of a corporation’s social responsibility is Archie Carroll. His famous article ‘The pyramid of Corpo­rate Social Responsibility: Toward the Moral Management of Organizational Stakeholders’ (1991) presents four pillars of CSR which are interconnected and building on one another: Here the economic responsibility, meaning maximum profit as primary incentive for doing business, constitutes the base. This means that for Carroll profit making is nothing opposed to social acting, on the contrary, it is even required. So, a prerequisite for every other respon­sible corporate commitment is that a firm is financially doing well (Carroll 1998). Habisch et al. (2008) underline this view and comment that it has to be realized that under the current economic circumstances it is not only legitimate but rather desirable that a company also benefits from its engagement, since a project without competitive edge is often perceived as luxury good within the firm (Habisch 2006). This leads to sustainable conduct of the social projects, independent of the economic developments.

Coming back to Carroll’s pyramid, the next level is legal responsibility which expects compa­nies to act within a country’s laws. These are regarded as ‘codified ethics’. The third respon­sibility a company is expected to comply with is ethical responsibility, dealing with social standards and norms which are a reflection of what is considered fair, just and morally right in the stakeholders’ eyes. This level can be viewed as preceding the establishment of new laws since many movements (e.g. concerning women, environment, minorities, ...) paved the way for juridical reforms - so, it can be contended that laws lag behind ethical thinking (Carroll 1998). So, this stage is twofold: first, it pushes the legal responsibility level to extend. At the same time, its expectation towards managers is that they behave and act even at a higher level than by law expected from them. The final stage is about the philanthropic corpo­rate responsibility, which embodies the active engagement in ‘acts or programs to promote human welfare or goodwill.’ (42) The difference to the former is that this responsibility is not specifically expected by the stakeholders - it is rather desired. So, this last level is more of a discretionary or voluntary nature.

However, in recent years the benefits of this voluntary commitment towards a company’s stakeholders become more and more evident, and the majority of businesses include the philanthropic level of responsibility in their overall CSR-mission, undoubtedly also because of ‘enlighted self-interest’ (Carroll 1991, 43). While in this article just talking in the last stage about Corporate Citizenship (‘Be a good corporate citizen’), Carroll’s article ‘The four faces of Corporate Citizenship’ (1998) explicitly focuses on this phenomenon. Yet scholars like Matten and Crane (2005) remark that in this case he just renamed CSR in CC by basically exchanging the four pillars of CSR by the four faces of CC. In this way the authors see Corporate Citizenship as possibility to relocate older concepts about business-society relationships in a more convenient and attractive way for corporate actors.

illustration not visible in this excerpt

Figure 1: Carroll's Pyramid of Corporate Social Responsibility (adapted from Carrol 1991,42)

Recent perspectives - a matter of strategy

Kotler and Lee (2005) draw a metaphorical comparison between physical activity and Corpo­rate Social Responsibility: when doing sports you look, feel and do better, and live longer. Equally, a company that applies Corporate Citizenship actions will look good to potential customers, investors etc. This engagement will feel good to employees, current consumers, stockholders. The authors report evidence that CSR-activities do good for the brand, the bottom line and the community, and that companies with a strong reputation for engaging in social activities will actually last longer. Melé (2008) and Herzig (2004) agree by stating that managers increasingly realize that long-term economic success of companies can only be guaranteed by combining shareholders’ interests with the welfare of the local community. Therefore, Herzig (2004) also recognizes the self-interested purpose of social issues.

Also, famous management guru Peter Drucker (1984) stresses the compatibility of profit and social responsibility and recommends converting a business’s social responsibilities into business opportunities. Here it is essential that Corporate Citizenship activities also reflect the values representing the organizational culture of a corporation in order to not elicit cyni­cism and rejection by staff, and the public labeling it as solely PR, alibi-activities or hypocrisy. This means that if an organizational culture of appreciation is absent, every attempt to demonstrate appreciation for the social environment is condemned to failure (Habisch et al. 2008).

In this respect, Herzig (2004) recommends that the societal corporate activities must be anchored systematically within a strategic framework and connected within the single busi­ness units. Similarly, Porter and Kramer (2006) advocate the integration of business priorities with social goals. Then, according to Herzig (2004), competitive advantage can be achieved by social activities. In spite of this seemingly reasonable logic, 'CC and its founding principles and values are messy when applied to day-to-day situations.’ (Rochlin 2004, 216) Another finding according to a survey conducted by the Boston Center of Corporate Citizenship and the Hitachi Foundation is that US-executives have positive attitudes about CC but they are not matched with positive actions. 60% of the surveyed business executives report that CC is already part of their business strategy to a large or very great extent. However, only 39% state that it is part of their business planning process and just 25 percent have (a) respon­sible person(s) for the issues in question. It is concluded that ‘reality trails behind rhetoric’. (Environmental Leader 2007) As to that, formal management processes have to be designed in order to turn their driving motives into constructive purposes. This strategic proceeding is a prerequisite for businesses that want to set priority to both profit and integrity, (ib.) Just focusing on maximizing shareholder value often falls short, just leading to short-term profits (Melé 2008). So, the long-term perspective has to be kept in sight because, if a corporation only does good to help itself (and its shareholders) doing well, this does not lead to sustain­able win-win situations (Banerjee 2007). In this case it may easily happen that once the com­pany finds other ways of how benefits can be achieved it may abandon the responsible track as fast as it has entered it.

Shareholder approach

Next, I want to mention the stakeholder approach, first seized on by Freeman in 1984. This term is often used in CC-terminology without really explaining what it should actually state. In general, this theory deals with the issue which groups corporations should take charge of (Freeman 1984). His definition of what ‘stakeholder’ really means is ‘those groups who can affect and are affected by a firm’s objectives.’ (46) Carroll (1991), talking about the term ‘stakeholders’, puts ‘names and faces’ on members of society ‘who are most urgent to business, and to whom it must be responsive.’ (43) In his view, there are two vital criteria in deciding which persons/groups a company is really accountable to: the stakeholders’ legiti­macy, and their power. In general Banerjee (2007) perceives power relations as an essential issue in business-society relationships but at the same time he criticizes that they are not adequately addressed in CSR or Corporate Citizenship concepts. In the context of how stakeholders should be managed Carroll (1991) defines it as [...] the process by which managers reconcile their own objectives with the claims and expectations being made on them by various stakeholder groups. (43)

Yet, Banerjee (2007) contends that stakeholder management in most cases is more ‘telling them what to do and how to behave and under what conditions they can engage with the company - rather than a meaningful attempt to build constructive relationships. ’ (44)

CSR vs. CC

In contrast to CSR, which focuses more on social responsibilities as an external concern, for Melé (2008), in the concept of CC, business is seen as part of society. Weber (2008) as well as Matten and Crane (2005) identify three different understandings of the notion Corporate Citizenship: First, CC is perceived as the practical element of CSR which deals with (strate­gic) philanthropic activities by companies. In this notion ‘giving back’ to society is central. Authors like Habisch et al. (2008) share the conception of CC as subarea of CSR, and the title of their book, which reads (translated) ‘Handbook of Corporate Citizenship - Corporate Social Responsibility for Managers’, underlines their practical interpretation of CC. In the second understanding, because of a wider acceptance in practice, the term is used as a synonym to Corporate Social Responsibility (like Carroll did, see above). What the two per­spectives have in common is that they both do not define what their understanding of the term ‘citizenship’ exactly is. (Matten and Crane 2005, 6) The third group identified by the authors concedes an extended political role to Corporate Citizenship, which leads me directly to the next section:

The citizen debate

For Wood and Logsdon (2001) companies have responsibility for their transactions towards the local community, due to the mere fact that they are a member of it. This viewpoint is part of a big controversy in literature concerning the very term ‘citizenship’, which originally comes from political science (Matten & Crane 2005), and the question if corporations can really be accounted citizens (Weber 2008). This term entails individual duties and rights within as well as generally being part of a (political) community (Melé 2008). Since corporations are legally ‘natural persons’ the term citizen is not far-fetched. However, concerning the rights and duties associated with this term Banerjee (2007) criticizes that the former is quite protected whereas the responsibilities remain discretionary. Duties of individual citizens are e.g. to obey the law, contribute to commonwealth, participate in governance, and demonstrate respect for other citizens - in this way it should apply to companies as well. A sound relation­ship between corporate citizens and their stakeholders should even go beyond respect and rather extend to solidarity with them. (Melé 2008)

Banerjee (2007) denotes the absence of a clear political and legal framework for coordinating citizenship rights and responsibilities and the deficiency of any punitive policy which could enforce the compliance with obligations beyond legal provisions, as ‘the fundamental short­coming’ (45) of all theories and practices related to responsible corporate behavior.

In this regard Matten and Crane (2005) argue that companies have taken up functions which formerly were exclusively conducted by the government. The forces of globalization have changed governments’ role and through its failure in protecting, facilitating and enabling certain citizen’s rights, corporations get involved. At the same time they should equally adopt the type of accountability which is expected from government by modern societies. The difference is that governments ‘can be approved or discharged of their responsibilities through the electoral process.’ (ib. 16) When thinking of elections, it comes to my mind that consumers have the possibility for some kind of ‘voting’ as well, namely every time they decide to buy a certain product or brand - of course the voting is only seen as such if it is an informed choice. From the corporations’ side Banerjee (2007) states that as a matter of fact there is indeed no citizenship right for corporations to vote but on the other hand one just has to consider the huge role which companies play in the political sphere and in further conse­quence also in the results of elections.

Summarizing Matten and Crane’s extended view of Corporate Citizenship, it ‘describes the role of corporation in administering citizenship rights for individuals’ (17). So their perspective ‘reframes CC away from the notion that the corporation is a citizen in itself (as individuals are) (ib.) Therefore, the authors even suggest renaming the term into ‘corporate administration of citizenship (CAC)’ (Matten & Crane 2005, 15).

After having examined the Corporate Citizenship concept from different angles, I want to point out once again that - with respect to the upcoming practitioner-oriented concept of Corporate Volunteering - in this thesis Corporate Citizenship is seen as the implementing, operative part of the more strategically oriented concept of Corporate Social Responsibility. With endeavors like Corporate Volunteering, which exceed simple donations by also invol­ving other company resources, the challenge of being a good corporate citizen can be met.

This corporate behavior is more and more demanded by society and increasingly essential for business success and even survival.

B. Corporate Volunteering (CV)

First of all, it has to be explained that in the literature, the concept of Corporate Volunteering is also referred to as a variety of other terms like Employee Volunteering (de Gilder 2005), Intra-organizational[3] or At-work Volunteerism (Peloza 2006), Community Involvement Pro­grams or Corporate Community Involvement (Zappalá 2004, Hess et al. 2002), Employee Community Involvement (Tuffrey 1998), Company Support for Employee Volunteerism (Basil et al. 2009) or Corporate-sponsored Volunteering (Pajo & Lee 2010). Whenever using one of these terms in this thesis, it is to be considered a synonym to Corporate Volunteering.

1. What is Corporate Volunteering?

For Zappalá (2004), CV is the ‘social dimension of corporate citizenship’ (185). Peloza (2006) amplifies Corporate Volunteering as ‘volunteerism in support of philanthropic initiatives that are planned and endorsed by the employer’ (358). Similarly, de Gilder et al. (2005) define the concept as when ‘companies enable and stimulate employees to volunteer, to contribute to social goals outside the company, but at the expense of the company.’ ( 144) CV and its [...] supervisory concept of CC can be seen as such kind of spanned partnership where companies join in with (at least) one partner coming from another social sector in order to solve urgent social problems and to contribute to the formation of society. (Herzig 2004, 7)

Summarizing these definitions, one can link Corporate Volunteering, a subtype of Corporate Citizenship, with a prescribing character of the company, the involvement of employees and the aim to contribute to the solution or facilitation of societal problems in the community. What is not mentioned in these definitions but definitely a not insignificant part of the concept is the business benefit of these efforts.

In terms of the theoretical embedding, applying Carroll’s point of view, the emerging pheno­menon of Corporate Volunteering would be located in the highest level of his pyramid - the philanthropic responsibility which states: ‘Be a good citizen. Contribute resources to the community, improve quality of life.’ (Carroll 1991,42)

According to Mutz (2008), currently a debate concerning the voluntariness of CV is happening among proponents of a ‘pure’ civic engagement in Germany. They argue that by definition this commitment has to be voluntary and not remunerated. In their view, the partici­pation in such cooperation is not always completely voluntary (e.g. when the whole company - meaning the chief executives - agrees on a Day of Service) and is paid in so far that it is within working hours - which are of course remunerated. So, for them, Corporate Volunteer­ing does not count as real civic engagement. Be that as it may, the base of CV and all other forms of Corporate Citizenship is a process called dissolution of boundaries: The former border between economy and society with their respective logics are blurred, fluent and much more transparent now. In corporations, it is increasingly being thought about societal issues and how to maximize their triple-bottom-line consisting of a positive social, ecologie and economic (‘people, planet, profit’) impact (Fry et al. 2009, Elkington 1998). Vice versa, in social organizations economic thinking has established itself as well (Mutz 2008).

2. CV in the US and in German-speaking countries

In the US, where the concept comes from, CV is about supporting already existing civic engagement or encouraging it. The background is that in the US, civic activities are much more common and the active involvement in such programs is more natural than in Europe - maybe one reason for this is the - in comparison to European countries - lacking social safety net and consequently a stronger civil society. Furthermore, the debate on work-life- balance is much more prevalent than over here. While in the US the statement ‘A good citizen is a good employee’ is a fundamental conviction, initially, companies in German­speaking countries had to be convinced of the benefits of Corporate Volunteering, especially emphasizing the skills that can be gained or improved by this instrument. (Mutz 2008) So in these countries, from begin on, the business case of the concept was a relevant issue, whereas in the US the embedding into the wider social context was vital.

Pinter (2006) has a slightly different view regarding the reasons for German companies to apply CV, and explains two approaches: On the one hand, CV is a form of societal engage­ment, which results from the ethico-moral claim for Corporate Social Responsibility. This claim derives from the assumption that the activities of corporations as members of society are legitimized through society and therefore possess ethico-moral civic responsibility. In terms of the other motive she agrees with Mutz (2008), stating that the focus lies on classical corporate concerns and views CV as instrument to fulfill economic purposes.

Installing Corporate Volunteering programs in order to create a more personal relationship between companies and their local community is among the fastest growing areas of philan­thropic activity of businesses in the UK, Western Europe and North America (Tuffrey 2003).

Likewise, Employee Volunteering is encouraged by 90% of the US firms (Tuffrey 1997). Another reference of a comprehensive application in the United States is the finding of the Points of Light Foundation (2000) that almost half of the US firms reported to have incorpora­ted Employee Volunteerism into their business plans. Since these findings date back over ten years, it is probable that today the numbers are even higher. This is indicated by a recent study’s outcome which states that more than nine in ten Fortune 500 survey respondents have formal Employee Volunteering and Giving Programs (EVGPs) (Boccalandro 2009). Quirk (1998) considers this widespread and increasing application of CV the most powerful evidence, that the concept of CV is a business case, meaning the economic relevance for companies.

One reason for the common application in English-speaking countries might be that a ‘firm must keep pace with the actions of its peers’ (Hess et al 2002, 116). Additionally, donating time and talent is less likely to be considered as self-serving by stakeholders (Wild 1993 in Hess et al. 2002). Kotler and Lee (2005) agree by stating that CV is the most genuine form of corporate social involvement since it is much more than just writing out a check - in their opinion, it takes real commitment and caring to give staff time off the regular working hours. Exactly this fact is what appears authentic to consumers, employees and, in general, the community.

The situation in Germany looks a little bit different: 38% of 120 of the largest German compa­nies (by turnover) already have practical experience with CV but two thirds expect an increa­sing importance of CV in the next few years (Herzig 2004).

Concerning the situation in Austria there is only little data available up to this date: one of them is a survey of the Ministry of Social Affairs which showed that four out of ten Austrian companies are prepared to grant unpaid leave for further training or education (‘educational leave’) or temporary release for voluntary service (Janker 2009).

3. Reasons and strategy for applying CV

From a causal perspective, Mutz (2008) distinguishes three motivation categories for compa­nies to apply Corporate Volunteering: the benefit, the philanthropic and the image type. The first underlies an action pattern of weighing up with the objective of a balanced cooperation; the second is about ‘giving’ with the goal to help the target group, and the last type deals with visualization in order to gain public attention. Whereas in the US - due to the generally stron­ger communal and social integration of companies within the frame of extensive Corporate Community Involvement strategies - philanthropic orientation is predominant, in German­speaking countries the form of following the logic of mutual benefits is most promising for achieving sustainable results, (ib.)

A study conducted by Benjamin (2007) shows that employee preferences are very important to about three quarters of administrators, which goes along with the outcome that one moti­vation for a company to start a volunteer program is having an interest in its employees. Results desired from Corporate Volunteering programs include helping needy people in the community (93%), having employees experience teamwork (93%), heighten employee morale (87%) and assist non-profit organization (80%) (ib.).

In terms of what induces employees to participate in volunteering Peterson (2004) identified six drivers:

- altruistic motive [Abbildung in dieser Leseprobe nicht enthalten] desire to be useful and helpful
- social relations motive [Abbildung in dieser Leseprobe nicht enthalten] desire to interact with others
- ideological motive [Abbildung in dieser Leseprobe nicht enthalten] specific cause that is highly important for individual
- status reward motive
- material reward motive [Abbildung in dieser Leseprobe nicht enthalten] prizes, free passes etc.
- time motive [Abbildung in dieser Leseprobe nicht enthalten] sufficient time available

This underlines Peloza and Hassay’s (2006) illustration that Employee Volunteerism is said to be motivated by a mix of altruistic and egoistic reasons. The authors extend these reasons by a third one, namely the desire that the own employer is a good corporate citizen - suppor­ted through the employees’ actions. In total, this article describes the motives for Intra- Organizational Volunteering as either because of the desire to help her/his employer (loyalty), to help others and/or to help her-/himself. The latter is described as a combination of feeling a ‘warm glow’ and the improvement of the own profile (image, career development) and connections within the firm (ib.).

According to Peterson (2004), the most effective strategy will be the one best matching the respective motives for volunteering: In this manner, CV programs with the aim to address younger employees may be more successful using recognition and performance evaluation strategies, while targeting middle aged and older employees could lead to better results when emphasizing social relations and ideological reasons. In this case, team projects may be the right choice.

Talking of strategy, Herzig (2004) notes that German companies are still far from an institu­tionalization of CV like in the US/UK which is ‘also reflected by the lack of integration of CV into overall corporate policies in most cases’ (20). He also reports that only one third of the CV-applying companies use this tool regularly and systemically. In contrast, in the US an in­crease in the utilization of Employee Volunteer programs to support core business functions already took place during the 90ies (Points of Light Foundation 2000, in Benjamin 2007).

Also in the literature the implementation of a more strategic approach towards corporate philanthropy is advocated but at the same time findings show that most philanthropic invest­ments do not have anything to do with a company’s strategy but ‘are primarily aimed at generating goodwill and positive publicity and boosting employee morale.’ (Porter & Kramer 2002, 6) However, Peloza and Hassay (2006) highly recommend aligning the charitable cause with the core business as well in order to achieve a competitive edge - at best in the context of a long-term partnership focus.

According to Mutz (2008), to be a sustainable CV program, stable structures have to be esta­blished. At the same time these structures have to be open for inner transformations and changing external influences. So the central theme of Corporate Volunteering in a company should be continuous despite a complex, changing social environment and ideally it is even further developed.

Another approach to a more strategic use of the instrument is a ‘match’ between the perceived benefits of CV (e.g. enhanced employee morale or better relationship with commu­nity stakeholders) and the focus of the actual Employee Volunteer practices (e.g. focus on employees or on the community). If these two dimensions match it is viewed as strategic use. (Basil et al. 2009) Opposed to that, a responsive, often ad-hoc application of Corporate Volunteering would be e.g. a one-shot Day of Service to rebuild a community playground while actually perceiving the benefits of CV in employee skill development. Despite this evi­dent divergence, the current application of Corporate Volunteering - particularly in German­speaking countries - seems to be more of a responsive than of a strategic orientation (ib.).

4. Types

There are numerous variations in the characteristics of CV programs depending i.a. on

- scope
- support from top management
- time provided
- the process of employee selection
- weather activities happen during working hours or staff’s leisure time
- if they are driven by employees or established and fostered by the company
- ...

It can also be a mixture and evolving according to the respective circumstances of a project. Thus, there is a huge range for corporations to engage in volunteer activities.

This means that the role of the company concerning their support for volunteering may vary considerably in terms of nature and scope: It may provide paid release time during working hours so that employees can pursue their volunteer activities in the community, which can be either freely chosen or somehow fixed by the firm. It may also involve ‘matching services’ to facilitate finding opportunities of interest for the staff’s volunteering purpose; a company also may be engaged in showing its appreciation for employee service outside work. (Kotler & Lee 2005)

However, the most sophisticated and complex form of CV is when the corporation under­takes all tasks related to one or more specific Corporate Volunteering deployment(s) - starting with choosing the respective social cause and a relevant NGO via selecting employees and - if needed - forming teams, through to preparing and conducting the respective projects as well as organizing reflection and evaluating the assignments.

Since companies may be willing to engage in such a compound but worthwhile endeavor, but do not have the human, time or know-how related capacities, there is the possibility to charge specialized agencies and volunteering networks which in further consequence adopt an intermediary function between the company and the community. In Austria, two of these initiatives are Brückenschlag (‘Bridge building’) and Vernetzte Welten (‘Networked Worlds’). While the first one organizes one-week ‘social internships’ for managers in social institutions like nursing homes, the latter engages in the placement of executives in specific longer-term NGO-projects, so called secondments, which is outlined below. Both initiatives’ offer includes a comprehensive briefing and advice beforehand as well as reflexive group discussions for evaluating the assignment after its completion.

The different forms Corporate Volunteering can take does not only involve the company’s but also the employees’ role, since it may address employees’ expertise, talents, ideas and/or physical labor (Kotler & Lee 2005).

Tuffrey (1998, 21) provides an overview of the variations of CV:

- secondment, fulltime and long term (up to a year) or short term (one to several months) e.g. career break carrying out a general function in a charity or undertaking a particular task, with continuous employment and a guaranteed return to the employer
- part time project assignment (individual) - e.g. release for 100 hours during working time over three months to undertake a specific project, often contributing a specific skill
- part time project assignment (team) - e.g. see above, but with a group of the staff doing various elements of a large project
- work-place community activity - e.g. acting as a guide to a visiting group of school children or supervising a work-experience placement
- one-to-one support/mentoring - e.g. working with individuals such as school children or young ex-offenders, as a personal mentor, advocate or tutor
- team volunteering (‘challenge’ events) - e.g. a team of the staff working to achieve a specific exercise, such as collecting food and clothes for homeless people or under­taking an environmental project
- individual volunteering - e.g. any personal voluntary activity in the service of the community, mostly contributing time although sometimes a specific skill as well.

Mutz (2008) distinguishes the different forms of Corporate Volunteering in the following way:

Days of Service

These days (mostly once per year or in rare cases also per month) take place under certain mottos. Examples are the renovation of a kindergarten, the cleaning of a park or the execu­tion of school lessons on different subjects (e.g. career choice, intercultural communication). Through these missions it is possible to accomplish tasks that are (too) costly and labor- intense for the community/NGOs.

Events

Usually events last several days or a week, and a team of employees is responsible for the organization and execution. Mostly, these events are in context with children, youth or culture.

Project Weeks / Social Internship

In these projects employees usually work in social institutions. Initiatives like the mentioned Austrian Brückenschlag, along the lines of the Swiss Seitenwechsel (‘Changeover’), coordi­nate those assignments, liaise between companies and NGOs, find suitable social organiza­tions that are willing to host the employees and work out a plan how the attendants can participate actively in the everyday work of the professionals. These initiatives distance them­selves from the classical Corporate Volunteering approach since they see themselves more as personality training (manager magazine 2005) and focus on reflection of the own leader­ship behavior, sharpen the senses for inter-personal issues, improve social competencies and broaden one’s mind away from a nine-to-five-attitude. Overall this initiative wants to be seen as a personal challenge for the participants.

[...]


[1] E.g. through CSR newspaper articles and supplements (e.g. Presse 18.12.2010, 04.12.2010, 19.06.2010, Salzburger Fenster 07/2011, Salzburger Nachrichten 26.3.2011, 16.2.2011, 4.2.2011, STANDARD 13.10.2010, 13.11.2008)

[2] In the following, the entirety of non-profit, social, environmental and other charitable organizations are referred to as NGOs.

[3] opposed to inter-organizational volunteering which relates to the ad hoc volunteer activities of individual employees (Peloza 2006)

Details

Pages
100
Year
2011
ISBN (eBook)
9783656000310
ISBN (Book)
9783656000723
File size
1.2 MB
Language
English
Catalog Number
v176891
Institution / College
University of Innsbruck – Fakultät für Betriebswirtschaft
Grade
1,0
Tags
corporate volunteering tool human resource development citizenship erste group

Author

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Title: Corporate Volunteering as Tool for Human Resource Development