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The concept of CSR has evolved and matured extensively since its beginning in developed Western economies several decades ago. Today, CSR is not new in the Asian economy and a growing number of Asian businesses would have or are beginning to 'experience' CSR through business connections with multinational corporations which stipulate CSR-related contractual requirements, most notably in supply chain relationships.
However, how much of this 'experience' is merely a reaction to external pressures imposed by foreign entities and to what extent are the actions taken actually responding to local social and environmental issues? Is CSR in Asia a manifestation of Western perceptions of what CSR should be in Asia or does it actively tackle issues of corporate responsibility most pressing to local economies? Whilst the formalisation of Asian CSR was largely driven by a Western-oriented model, I believe there are opportunities for Asian businesses and the wider stakeholder groups to reshape the CSR agenda based on unique Asian realities. This does not suggest that Asian businesses should practice a different form of CSR nor discard current practices simply because they are 'too Western'. Rather, Asian businesses can and have the ability to integrate CSR into their strategy through active engagement with the local operating environment and move beyond the reactionary or compliance stance of CSR. Such a development would enable CSR to become a real driver for business growth and continuity.
Perceptions of Asian CSR
CSR as a formal concept of corporate conduct is often perceived in Asia as a Western doctrine. Whilst values of socially responsible business, evolved from local cultures and needs, exist in Asia (as they do in all societies), international trade and investment have introduced a formalised structure of CSR that Asian businesses must learn to understand, adopt and implement in response to external pressures of large Western corporations.
The learning process is unavoidably challenging and sentiments ranging from denial and resentment to confusion and reluctant acceptance are likely to surface during the process. Such negative sentiments arise when the companies feel that the CSR debate is codified in a language that speaks of foreign interests that are not key priorities for their local environments. The resentment intensifies when Western companies are seen as being hypocritical, given their history of capitalist growth at the expense of socio-environmental concerns and demand for cheap labour and products from Asia.
An extrinsic view of CSR and unhelpful accusations of hypocrisy do little to improve Asian businesses and are detrimental to both Asia and the world. As more Asian companies become familiar with the systems and processes to monitor and improve CSR compliance in response to supply chain requirements, there is potential to develop an intrinsic view of CSR based on the local context of business networks, socio-political frameworks, and cultural and religious backgrounds.
An intrinsic view of CSR for Asian businesses
One of the first questions that an Asian company has to answer when establishing an intrinsic view of CSR is, "What does Asia expect of corporate behaviour?" Without losing sight of the fact that there is vast diversity across different Asian economies, several key aspects should be considered when developing a model for responsible Asian businesses.
Improving living standards and fighting poverty are a primary focus of many governments in Asia. The importance attached to having jobs as a means to break out of the poverty cycle has led to conflicting views on wages and child labour between some Asian and Western businesses and policy makers. As both sides seek middle ground on the issue, Asian companies can increase their business focus on the poor, by implementing pro-poor strategies, such as products designed to specifically serve the poor, which pursue their corporate interest whilst addressing social needs.
Family connections in Asian businesses present both challenges and opportunities in creating the CSR identity for family businesses. The intimate network of business relationships, or guanxi, lays the foundation for building social contracts with different stakeholders. Rather than adhering to strictly defined rules of engagement, family values or interests in social and environmental issues could have a greater impact on the direction of CSR. At the broader level, there is a stronger cultural affinity for consensus building in Asia, which contrasts with the more regulatory approach in the West.
Religious beliefs help to shape business philosophy in some Asian societies, to varying degrees of influence. An example is the parallel between Buddhist philosophy and CSR, which share the common emphasis on stakeholder interdependence, as highlighted by Mr. Kasit Piromya, Minister of Foreign Affairs of Thailand, at the CSR Asia Summit in 2008. Confucian teachings emphasise social harmony, a political and business ethic that remains central in the Chinese society. The rise of Islamic finance demonstrates how religious values are applied to guide sustainable business decisions. The intertwinement of religion and business has to be addressed in defining CSR for Asian businesses.
The role of government vis-à-vis the civil society in Asia is another area with considerable impact on CSR. Governments in Asia have a greater role in the provision of social welfare as well as more active participation as business owners and investors than their Western counterparts. On the contrary, the civil society in Asia is less active than in the West. As such, Asian governments and quasi-public bodies can exert significant pressures on businesses to improve their CSR. Examples include the mandatory requirement on Chinese state-owned enterprises to produce CSR reports in 2008 and the recent release of voluntary guidelines on sustainability reporting by the Singapore Stock Exchange in 2010. Whilst pressures from the civil society may be limited and deemed less important for most Asian businesses, one can justifiably expect that nongovernmental groups will strengthen with time as the population becomes more educated and critical of business conduct.
Having an intrinsic view of CSR enables it to be recognised as being part of the overall business strategy in its own right and be embedded in the corporate culture over time. This represents a maturing of CSR values beyond the reactionary or compliance view, which contributes to the 'soft power' of Asian businesses as they expand abroad. A report by Booz & Company in 2008, which examines how Chinese companies, can leverage 'soft power' in the international marketplace, sheds light on how CSR helps to build that power. Soft power refers to the ability to gain influence based on culture and aspirational dimensions, as opposed to hard power which is linked to financial or technological superiority. CSR helps a company to develop responsible and influential citizenship through balancing shareholder interests and sustainable developments, and promote values-based leadership and management, two areas which the report identifies as critical pillars of soft power. An interesting comparison was made between Indian and Chinese companies to highlight the relatively greater success of Indian companies in overseas acquisitions due to their use of soft power.
Business, political and social leaders in Asia have the ability and responsibility to shape CSR for their local environments. An integrative approach to embed CSR in businesses not only presents vast opportunities for Asian economies but also the world as well. Differences may exist but it is only through dialogue and engagement that similarities can be recognised and collaborative solutions be forged.