In today’s modern business environment rife with intense competition, some of the most financially successful global firms exhibit high levels of corporate social responsibility (CSR). High CSR companies take into account the concurrent expectations of their multiple stakeholders (e.g., customers, shareholders, employees, community) and attempt to maximize performance in pursuit not only of the firm’s financial objectives, but also of broader goals related to improving the environment and society more generally. Consider this impressive list: Microsoft, Disney, Google, BMW, Daimler, Intel, Sony, Volkswagen, Apple, and Nestle´ are Reputation Institute’s top ten best known companies for their CSR reputations. These firms have earned their positive CSR reputation and their investments in CSR have paid off. Research suggests that investing in CSR is associated with higher levels of innovation, strategic differentiation, risk management, employer attractiveness, customer preferences, shareholder value, and financial performance. Broadly speaking, it appears that ‘‘doing good’’ in the world is also inherently good for business.
To facilitate a corporate-wide focus on CSR, global firms need responsible global leaders who understand and maximize value for multiple stakeholders, rather than focusing primarily on short-term economic gains. Indeed, it is well known that senior leaders not only play a critical role in determining the strategic objectives of their firms, but also act as role models who shape the ways in which their organizations go about their business activities. Responsible global leaders make decisions, develop strategies, manage staff, and execute policies and practices that benefit multiple stakeholders in the countries where they operate. They have the ability to understand the various cultural contexts in which the firm operates and the motivation to understand how those directly and indirectly connected to the organization can be affected by its actions. Finally, responsible global leaders are world citizens who care about others, the environment, and society and surround themselves with highly competent and socially responsible people who aid them in their efforts promote the interests of their firms’ various internal and external constituencies.
So, what characteristics are needed to be an effective socially responsible global leader?
CSR is not an insular concept. It requires senior leaders who possess an understanding of how to analyze the needs of multiple stakeholders across national and cultural boundaries and who know how to maximize these needs concurrently. Socially responsible global leaders must be able to decipher complex situations and optimize diverse, and often conflicting, stakeholder needs. The most effective of these leaders are culturally agile. Culturally agile, socially responsible global leaders have a repertoire of cultural responses that they leverage appropriately to ‘‘do good’’ and ‘‘do no harm’’ across stakeholders across countries and cultures. Using their cultural agility, cultural adaptation, cultural minimization, and cultural integration are three possible responses of socially responsible global leaders. Let’s consider each in the context of socially responsible global leaders.
At times, socially responsible global leaders need to adapt to various cultural norms to maximize the benefit to key stakeholders. Using an adaptation response, socially responsible global leaders address the needs of the local employees, consumers, and communities by adjusting their practices to fit the local norms, customs, traditions, and environment. For example, Buck’s Global Survey of Health Promotion and Workplace Wellness Strategies 2012, by Buck Consultants, surveyed 1,356 organizations from a total of 45 countries and found that the employee wellness programs that were managed ‘‘by local staff with personal connections’’ outperformed employee wellness programs that were managed centrally through headquarters. When socially responsible global leaders want to promote workplace wellness, they are best advised to allow for local adaptation in implementation.
While adaptation is important in some situations, socially responsible global leaders recognize that adaptation is not the correct response in every cross-cultural situation. At times, socially responsible global leaders need to minimize or persuasively override local norms, customs, and behavioral expectations in order to do the right thing for employees, the environment and society. We can see socially responsible global leaders using cultural minimization in cultures that disregard employee safety practices or environment protection laws, or engage in corruption and bribery. In these situations, socially responsible global leaders would need to maintain a CSR value with an industry, corporate, or personal value, irrespective of cultural norms, customs, and behavioral expectations. For example, Coca- Cola Enterprises (CCE) has a global code of conduct for all CCE employees that would need to be fostered and reinforced by CCE’s leaders globally.
There are other times when neither adaptation nor minimization is the answer and socially responsible global leaders need to integrate multiple approaches into decisions, policies, and practices. An example of this is found among the Nestle´ leaders who are involved in the firm’s stakeholder engagement program. Through this program, Nestle´’s leaders regularly convene their key stakeholders (including customers, employees, community leaders, NGOs, suppliers, and reporting agencies) in an effort to create collective responses and to collaborate on generating recommendations for issues affecting the firm.
Socially responsible global leaders operate with cultural agility when they have the ability to leverage each of these three strategies — adaptation, minimization, and integration — when needed and when appropriate to do good, to do no harm and to maximize benefits to their stakeholders. However, cultural agility is necessary but not sufficient for fostering socially responsible global leaders. CSR values are also needed. Cultural agility without corresponding CSR values could foster leaders’ use of their cross-cultural competencies in a manipulative manner to serve their own interests. Companies need to build global leaders’ cultural agility while fostering their CSR values, including toward social responsibility orientation, ethical values, and altruism.
While responsible global leaders are first and foremost devoted to their firms’ strategic objectives, they are unique from the traditional business leader in that they have reframed their understanding of high-performance to include the multiple stakeholder perspective. They have, ideally, integrated CSR into their fundamental beliefs and values and view CSR as an important part of their leader identity. More specifically, these individuals view CSR initiatives not simply as a means of promoting their organization’s long-term interests (although this concern no doubt factors prominently into their mental calculus), but rather as a personally meaningful enterprise that reinforces and affirms who they fundamentally are as people and as leaders of their firms. CSR values include an orientation toward social responsibility, ethics, and altruism. Each of these values can be fostered, promoted, and rewarded by organizations to develop a broader cadre of socially responsible global leaders.
Today's post is an excerpt from Paula Caligiuri and Christian Thoroughgood's article, Developing responsible global leaders through corporate-sponsored international volunteerism programs, in Organizational Dynamics (2015) 44, 138-145.
Christian Thoroughgood, PhD is an Assistant Professor in the Graduate HRD program at Villanova University. Learn more about him here!
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