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Critics of corporate citizenship are being overtaken by events, research for upcoming global forum suggests

October 1, 2006

For more information, contact: Benjamin Haimowitz, HHaimowitz@aol.com

Should companies assign a high priority to good corporate citizenship -- that is, to social and moral issues beyond the economic, legal, and technical requirements of doing business?

Thirty-six years ago Nobel economist Milton Friedman dismissed the question with the statement that corporate social responsibility was "a fundamentally subversive doctrine" of "pure unadulterated socialism" -- and thereby set off a debate that goes on to this day.

Yet, even as it continues, the debate appears in the process of being overtaken by events. This is a message that seems destined to emerge from a meeting next week in which 400 business scholars and corporate executives will join United Nations officials in a forum to further the world's most ambitious program in global corporate citizenship.

The three-day global forum in Cleveland from Oct. 22nd to 25th (called "Business as an Agent of World Benefit") will witness a marked increase in participation by management scholars in the UN Global Compact, the initiative that Kofi Annan launched six years ago to promote greater commitment to social and economic goals by business. The Academy of Management, the world's largest scholarly organization devoted to management research and teaching, is cosponsoring the forum in cooperation with the UN and Case Western Reserve University.

Unsurprisingly, how business education can contribute to the goals of the UN Global Compact will be a major concern of the meeting.

"To our delight, we have been inundated with papers -- perhaps the largest outpouring ever of research and thought on global corporate citizenship," says Nancy Adler, representing the Academy of Management as one of three co-chairs of the global forum. Adler is a professor of organizational behavior and international management at McGill University.

The research in these several hundred papers, she says, "tends to expose the great tradeoff illusion, the notion that companies help society at the expense of financial performance. What emerges strongly is how dynamic the corporate-citizenship movement is, so that we professors are having to run faster and faster to keep up with what companies are doing. In that sense, Milton Friedman's objection to corporate citizenship as incompatible with capitalism is being overtaken by events."

Speakers at the global forum will include such academic stars as C. K.  Prahalad, of the University of Michigan, Jane Nelson of Harvard, and Peter Senge of MIT. Participating corporations, among the several thousand that subscribe to the UN Global Compact, will include, Unilever, Lafarge, Interface, Alcoa, Coca-Cola, GE, Hewlett-Packard, Microsoft, Novartis, Pfizer, and Toyota.

Adler sees scholars as enhancing the UN effort in three principal ways.

First, the collaboration is eliciting a wide range of research, running the gamut from explorations in management theory to documentary-like accounts of corporate citizenship around the globe. About 110 of the accepted papers will be presented live at the meeting itself, with more than 100 others available to an anticipated 3,000 online participants worldwide.

Second, the Global Compact will gain in intellectual cogency, Adler says. "There is no shortage of skepticism in the world about corporate citizenship in general and about the Global Compact in particular. Certainly an effective antidote to that skepticism is the intellectual rigor that scholars bring to this enterprise."

A third major gain, and perhaps the most important, she says, will be the forum's transformative impact on management education -- laying the groundwork for global corporate citizenship to attain the prominence in most business schools that it now has in only a few. Says Adler: "Business schools possess  immense influence as educators of the next generation of leaders and managers. The challenges of this century demand that more of that influence be exercised on behalf of the UN Millennium Goals with respect to human rights, worker welfare, environmental stewardship and, ultimately, world peace."

A member of the McGill's management faculty since 1980, Adler is the first senior faculty person whom new MBA students encounter, for it is she who leads "Global Leadership: Redefining Success," an intensive, three-day seminar inaugurated last year for all entering MBAs.

According to Adler, this introductory seminar "explores how business leaders can optimize not just companies' profits but their social and environmental performance as well, how they can unite the strengths of business with the most compelling challenges facing the world today." Her description echoes Annan's words when he introduced the concept of the Global Compact in a speech at the World Economic Forum in Davos, Switzerland in 1999: "Let us choose to unite the power of markets with the strengths of universal ideals...let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of future generations."

Comments Adler: "The response to our McGill seminar casts doubt on the notion that MBA candidates are more cynical than other students or more greedy or self-centered. The most frequent comment I hear from students about our seminar is: 'I never thought anyone else was interested in this.' "

"Of the 100 largest economies in the world today," Adler says in summary, "half are multinational companies, not countries. Traditional perspectives that assume government can take care of society's welfare fail to recognize the significance of this. Considering the contributions to societal and environmental well-being that global companies are making, the day may not be far off when the Nobel Peace Prize will be awarded to one of them instead of to a diplomat or tree planter. The award this year to the Grameen Bank may be a step in this direction."

Marking its 70th birthday this year, the Academy of Management is the largest organization in the world devoted to management research and teaching, with close to 17,000 members in 92 countries, including about 10,000 in the United States. It publishes four peer-reviewed journals, the Academy of Management Journal, Academy of Management Review, Academy of Management Learning and Education, and Academy of Management Perspectives

Media Coverage:
The Observer. The Shaky Marriage of Capitalism and Virtue. (Sunday, October 29, 2006).
The Wall Street Journal. The Case against Corporate Social Responsibility. (Monday, August 23, 2010).

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