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The good corporate citizen

By Peter Walker for CNN
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LONDON, England (CNN) -- One of the key buzzwords at business schools in recent years, both in research and teaching, has been corporate social responsibility.

A number of schools now offer specific MBAs or other qualifications in socially conscious business, a response both to the changing priorities of the business world and demand among students.

However, it has become fashionable in some circles to demean corporate social responsibility as a convenient fig leaf of morality for otherwise rapacious multinationals, a PR stunt which ends up benefiting neither shareholders nor people on the ground.

But now, a leading UK business school has leaped to the defense of the notion with a research paper that argues multinationals are increasingly important players in global economic development.

The research, "Multinationals in their Communities: A Social Capital Approach to Corporate Citizenship Projects," won the prize for best paper at a recent European conference on business ethics and has now been expanded into a book of the same name.

"Our findings have shown that multinationals offer a rare ability to link local, national and global communities and have the capacity to impact significantly on the quality of social relations within the communities in which they operate," said Dr Michael Pollitt from Judge Business School, part of Cambridge University.

"A key way they do this is through their corporate citizenship projects, funded as part of their corporate social responsibility programs, such as youth training, venture capital funding or community healthcare."

The paper analyzes a series of projects linked to corporate citizenship, which it sees as a broader notion to corporate social responsibility, not so much turning companies into charitable trusts as meaning they are simply accepted by society so they can trade sustainably.

Among the projects looked at are those operated by multinationals in South Africa, Mexico and Poland.

"We have been able to demonstrate how multinationals can leverage their community engagement activities to greater effect and play a more significant role in building socially successful communities in developing countries," commented Dr Ian Jones, a management professor at the University of Oxford and one of the other co-authors.

The paper stresses the scale of corporate social efforts, noting that in the U.S., leading corporations contribute around £13.5 billion in cash and other donations annually to community projects, with the equivalent figure in the UK being around $1.5 billion.

Among the successful schemes profiled in the paper is the Zimele project run by mining giant Anglo American in South Africa.

This has provided around $2 million in venture support for black entrepreneurs seeking to set up their own businesses. As well as cash, the founders receive advice and, often, support in winning supply contracts with Anglo American.

Thus far, the authors found, the project has created around 4,000 jobs, and more than half the ventures no longer rely on financial support from the mining group.

It was vital that such projects created real benefits and "should not be seen by companies as merely about public relations," the authors write in their conclusion.

"It is important that company corporate citizenship does yield demonstrable societal benefits or else it will backfire as a PR tool due to external cynicism towards it."


story.miners.jpg

One corporate project has helped South African mining communities.

FACT BOX

FT MBA Rankings
1. Wharton, U.S.
2. Columbia, U.S.
3. Harvard, U.S.
4. Stanford GSB, U.S.
5. London Business School, UK
6. Chicago GSB, U.S.
7. Insead, France/Singapore
8. Stern, NYU, U.S.
9. Tuck, Dartmouth, U.S.
10. Yale, U.S.
Source: Financial Times 2007

FACT BOX

MBA BASICS

The classic MBA is a two-year full-time program. Accelerated and distance learning MBAs are increasingly popular.

A typical MBA student has several years' work experience and is in their late 20s.

Those who take an Executive MBA, or EMBA, tend to be older, more senior managers.

Courses are expensive, but the rewards are high -- some new MBAs now get a $100,000 basic salary, according to a survey.

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