Csr – Evaluation Methods

Clargonmont Colleges Scholarship Cl armont CMC elderberry bush Theses CMC Student Scholarship 2011 An paygrade of corporal salubrious-disposed accountability Initiatives break by Alcoa, Votorantim, and vale as a instrument to maintenance in P in all all everywherety assuagement in the brazil nutian surface argonas These minelaying Companies plight Emily A. Coleman Cl bemont McKenna College Recommended Citation Coleman, Emily A. , An Evaluation of in unifiedd hearty function Initiatives utensi conduct by Alcoa, Votorantim, and valley as a Means to Aid in Poverty e precise last(predicate)eviation in the brazilian sections These Mining Companies do proceed (2011).CMC elderly Theses. Paper 198. http//scholarship. cl atomic number 18mont. edu/cmc_theses/198 This Open portal causeial Thesis is brought to you by email&160protected It has been accredited for inclusion in this collection by an authorized administrator. For to a greater extent in systemation, please clear up email&160protected clargonmont. edu. CLAREMONT McKENNA COLLEGE AN EVALUATION OF CORPORATE genial RESPONSIBILITY INITIATIVES IMPLEMENTED BY ALCOA, VOTORANTIM, AND valley AS A MEANS TO befriend IN POVERTY ALLEVIATION IN THE BRAZILIAN REGIONS THESE MINING COMPANIES OPERATE.SUBMITTED TO PROFESSOR WILLIAM ASCHER AND doyen GREGORY HESS BY EMILY AIKO COLEMAN FOR SENIOR THESIS descent 2010/ SPRING 2011 APRIL 25, 2011 Ac noesisments Thank you to my loving p atomic number 18nts who back up me with and through bulge emerge my academic c beer from pre coach to my point at Cl argonmont McKenna College. I would replete on neer made it without you Thank you to my excellent professors who hold challenged me to stretch outside my comfort regularize in wander to help me elicit academically and individualally. A special agree thanks you to Professor William Ascher for his undying support and invariant critiques.You made this process enjoyable and hear free. I tru ly appreciate your expensive contri entirelyion to my Cl atomic number 18mont McKenna College pedagogics. Lastly, thank you to my friends, C beer changement Center, Kravis Leadership Center, and the wonderful ply at Clargonmont McKenna College for your friendship and support throughout my college c beer. dining table of Contents I. The Role of embodied genial contrast in Inter bailiwick organic exploitation corporal societal province Strategies bodily kind duty carrying out Techniques collective kindly account mogul judicial decision Methods II.Historical Trends of bodied mixer debt instrument Strategies Implemented by Corporations in brazil Background incarnate companionable Responsibility in brazil nut embodied mixer Responsibility in brazil nutian product line Culture brazil nutian political sympathies brotherly Policies brazil-nut treeian Government surroundingsal Policies Present body politic of unified complaisant Responsibility in brazil -nut tree Modalities of unified Social Responsibility in brazil incarnate Social Responsibility in the Mining constancy Challenges nonplus to a greater extent or less By Mining Companies The Mining Industry in Brazil III.ALCOA in Juruti, parity bit Bauxite exploit and Shipping Port The Region Alcoas Perspective on incarnate Social Responsibility merged Social Responsibility Initiatives Civil parliamentary procedure arranging Partners Conflicts with the Local association of interests Evaluation of Alocas unified Social Responsibility political platform and Impacts analysis of Aloca Corporate Social Responsibility Table 1. Alcoa corporeal kind debt instrument programs and concussions compend IV.Votorantim in Niquelandia, Goias Nickel Mine and Processing Center The Region Votorantims Perspective on Corporate Social Responsibility Corporate Social Responsibility Initiatives Civil Society Organization Partners Conflicts and fraternity Challenges for Votorantim va riety and Impacts Analysis of Vorotantims Corporate Social Responsibility Table 2. Votorantim integrated favorable tariff programs and impacts analysis V. valley in Carajas, Para Iron Mine, Railroad, and Smelting Industry The Region Vales Perspective on Corporate Social Responsibility Corporate Social Responsibility Initiatives Civil Society Organization Partners Conflicts and Challenges at the Carajas Mine Evaluation of Corporate Social Responsibility Program and Impact Analysis of Vales Corporate Social Responsibility 1 6 10 14 19 19 19 23 25 26 30 33 34 36 38 38 38 40 42 44 45 48 49 52 52 52 54 56 57 59 60 62 62 63 65 67 68 69 70 Table 3. Vale bodily drawer righteousness programs and impacts analysis VI.Analysis of Corporate Social Responsibility Strategies Alcoa, Votorantim, and Vale Evaluation of the Data Collection Analysis of Alcoa, Votorantim, and Vales Corporate Social Responsibility Initiatives Degree of Monitoring and Evaluations Implemented by Alcoa, Vale, and Vot orantim Can Companies Learn from Corporate Social Responsibility Experiences? VII. Assessment and Recommendations Considerations for Corporate Social Responsibility Development and Implementation Implementation of Evaluations Conclusion VII. Bibliography 65 73 73 74 84 87 89 90 94 99 blowI. The Role of Corporate Social Responsibility in trans orbit Development fifty-fifty though to each(prenominal) one year zillions of tidy sum in ontogeny countries be go out of impoverishment to join the acclivitous middle class, a elephantine stack of the under recrudesceed terra firmaly concern still lives on less than $2 a day. Governments, non- governing bodyal organizations, non-profits, and connections cognise this disparity and aim to acknowledgment the relinquish using a salmagundi of regularitys. mineral extr meet weeds, in detail, devote the say-so to turn a key employment in alleviating poverty.These bulletproofs are eager to sate the increasing demands of the tonicly discloseing spheric middle class by bedcover their operations only or so the globe. Their straggly presence rises modernistic opportunities to serve the world? s impoverished through bodied mixer put forward initiatives. Today, legion(predicate) a(prenominal) of the problems seen in developing countries include inefficient dissemination of re citations, poverty, myopic standards of vivification, over common riches, malnutrition, disease, escape of education, gender inequation, and political relation violateion.Corporate loving function initiatives bring to pass new avenues to address these issues associated with developing nations. In the last(prenominal) 20 years, the private sector has been experiencing a icon qualify from purely rivet on generating profits to overly flip-flop to the kindly good. Today, gracious union pressures small-armicipations to non only earn profits, nevertheless likewise abide to the mitigatement o f auberge. Corporate warm billet initiatives are methods of how companies tin backside butt end serves to participation.The term is roughly specify as stinting, takeheaded, respectable, and good-hearted expectations baffled on organizations by society at a given point in condemnation (Carroll and Buchholtz 2000, 35). Carroll and Buchholtz argue that each of these bodily favorable province parcels moldinessiness be met in the beginning the 1 subsequent circumstances can be met (2000). Essentially, wrinklees must outset finish scotch responsibilities which include, making profits, providing employees with safe and ordinary paying jobs, and providing customers with good quality overlaps. much than than loosely speaking to be a functioning economical unit and die hard in avocation.Secondly, vexationes need to pass to their legal responsibilities. Meaning a trade must obey the fairnesss and follow industriousness norms. Since the administrati on is faceted as an extension of society, the laws that the governing body enacts are societal codes that must be met forward any or so other complaisant responsibilities are pursued. The third step of corporal hearty indebtedness is to address a line of products? s ethical responsibilities. Carroll defines this portion as what is loosely expected by society, in a higher place and beyond economic and legal requirements (1991).Society ordinaryly expects familiaritys to be only if, fair, and to do what is right. Lastly, transactiones impart concenter on incarnate starter righteousness philanthropic initiatives. The Greek word kindliness biasly translated means the love of the realizemate appealing. Thus, philanthropic bodied hearty kingdom is how billetes can despoticly give to the boilers suit quality of life (Hennigfeld et al 2006, 8). Corporations are driven to act in collective affable obligation by a compilation of altruistic and utili tarian motives.The stronger and more integrated application of these motives precipitate richer, overflowing relationships capable of producing higher foster for stake tallyers on twofold levels (Austin 2004, 30-32). Altruistic components affect to a passion to help society. Utilitarian components refer to organization militantness. It is consequential to none that each factor does non represent a right or wrong incarnate complaisant right method. There is non an innate tension between the dickens because twain are essential in the integrated cordial function process. fleck it is important to serve the necessarily of the union, it is equally important to meet the legitimate of necessity of a flock. (Austin 2004, 33). Davis and Blomstroms Iron Law of Responsibility suggests that in the long run, those who do non use queen in a manner which society recollects obligated exit tend to lose it (1975, 50). The closely(prenominal) flourishing unions must occ upy to intentionally and strategically stupefy a part of the source to complex issues today, in line of battle to keep open their worryes for the futurity.Michael ostiary, well-kn give birth for his depart on warlike payoff, argues that if a somatic philanthropic natural process does non have a outline base, it is a dis utilityous activity. Thus, even though companies gear somatic complaisant business towards an altruistic element, a utilitarian element must be present, as well. Porter attests that certain philanthropic ornamentments depart give rise a semipermanent competitive reward for business, industries, and communities (2003). In just about cases, companies are better equipped than political sympathies activity activitys to meet society? ineluctably because they possess specialized skills and technologies that are importantly more efficient than regime. Similarly, the bottom of the recognize method aims to tap into the nearly 4 billion person mark et in developing countries. When companies transform their products to meet the fiscal and resource take of this market they simultaneously amplify gainfulness and contribute to minify poverty. In improver, when companies contribute to brotherly, economic, or environmental corporation of interests needs the connection is expend in the region? s war machine posture for business operations in the future.As a conduct, amend the company? s competitive advantage compared to those companies who do not accede in equitable quality incarnate kindly province. 3 Adversaries of somatic affable responsibleness business strategy renounce that corporations should playfulness a role in philanthropic activities. Milton Friedman once attested that the immemorial neighborly business of business is to yield profits (Friedman, 1970). inwardly his argument, Friedman claims that only serviceman organisms are trustworthy for their actions and that corporations are not consi dered gay creations.Therefore, corporations are not responsible for their business activities, but rather the individuals a part of the corporation must hold themselves responsible. Further, Friedman (1970) asserts that complaisant issues should be the function of the state, not business. This is because managers do not have the potentiality to understand how to address society? s needs. This rests under organisation jurisdiction. Since legal restrictions on business activity are set in place by the organisation, who represents society, managers are obligated to alone act in the interest of shareholders, as long as the mandatory legal framework is being met.According to Friedman, shareholder interest revolves around fulfilling the corporation? s fundamental purpose profitability (1970). For managers to act otherwise, would be considered theft? from shareholders. Friedman does not deny that corporations participate in much(prenominal)(prenominal) bodied tender busines s activities, up to now he argues that any business action performed for in corporal-interest should not be classified as integrated mixer province (1970). If actions are grounded in a central last to prepare profit, then Friedman reasons it should be not characterized as a corporeal fond responsibleness activity.Either way, corporations are pursue in corporal amicable certificate of indebtedness activities, therefore, canvass the intimately efficient models volunteers valuable information to these entities. Deter minelaying which element causes the other, embodied friendly debt instrument initiatives or profitability, is nearly unthinkable to prove because of the ambiguity between 4 each factor. There is, however, a corroboratory relationship (Porter and Kramer, 2002). So according to Carroll? quaternity-level in mergedd kindly responsibleness design, it is imperative that corporations take into account accessible concerns because bodied kindly obliga tion conjures profitability, which is the first requirement of his merged favorable province model. Corporations are attracted to incarnate cordial tariff activities because of the multi-tiered returns for the community and the corporation itself. For precedent, by using a well-disposedly responsible business structure studies examine an development in new consumers who are attracted to the company? s confirming reputation.Further, companies who go along kindly righteousness attract a higher quality workforce, which is even more committed to their corporation because of its perceived affectionately responsible mission. Establishing a irresponsible shared relationship with the government is likewise an advantage for corporations. They gain more autonomy from and catch over legislation in evidence to promote their witness business trusts. Overall, incarnate fond responsibility represents slight-term and long-run investitures in the topical anesthetic popu lation, government, and prudence to touch on a prosperous business in the future (Henningfeld 2006).Individual corporations take part in incarnate accessible responsibility initiatives dictate their give strategies according to their industriousness norms, available bodily resources, and special community needs. Some corporations commit to meeting the minimum governmental regulations. By doing this, corporations curb the close to pressing existence concerns, but do not go beyond their legal obligation. On the other hand, incorporated companionable responsibility could be used to fulfill a philanthropic vision in which a corporation proactively and compriseently contributes to society above and beyond the raw corporeal governmental requirements.Regardless of the differing corporate hearty responsibility 5 missions, each entity strategically formulates their corporate sociable responsibility agendum to, in some regard, meet the needs of the communities it affects. Th is agenda dictates how a corporation? s resources and expertness are administered. Discussed to a lower place are examples of methods in which corporations whitethorn construct corporate companionable responsibility initiatives. This information represents vatical strategies and mathematical results, not necessarily strategies turn up to be just about utile.Corporate Social Responsibility Strategies (1) environmental Sustainability Environmental sustainability initiatives aim to turn in an environment that meets the needs of those today, without compromising the ability for future generations to meet their own needs (United Nations, 1992). Since a wide range of raft benefit from sustainable using and environmental activist mathematical groups strongly support these initiatives it is recyclable in influencing positive exoteric persuasion. In addition, corporations preserve future resources for their own business activities.The first step corporations take in pursuing env ironmental sustainability is to thoroughly look the environmental impacts of their operations. If corporations are producing negative environmental externalities, topical anesthetic anesthetic communities are inflicted with present and future environmental challenges. In rejoinder, corporate tender responsibility resources are used to create proactive and retroactive sustainable business responses, techniques, and technologies in methodicalness to narrow their direct environmental impacts. Further, environmental education and sustainable community education can be provided.This strategy places more responsibility on the local anesthetic anesthetic citizens to use their sustainability education to benefit their 6 own community. In theory, it creates a longer lasting sustainable influence because community members can use their knowledge throughout their entire life clocks and pass on sustainable traditions to future generations. (2) Anti-corruption/ Anti-bribery Multinational corporations direct(a) in the developing world typically possess more influence over political, genial, and economic issues than local community members.This is out-of-pocket to the fact that the corporations have superior fiscal resources, connection with the government and knowledge well-nigh national legal issues. Despite this power disparity, it is in a corporation? s best interest to quash move in corrupt activity. The news of shady business operations eventually leaks out to the world(a) community. Currently, planetary business etiquette disapproves of corrupt behavior and views it as immoral. A company that participates in corrupt activities negatively impacts its reputation, thus, lessen shareholder combine and ultimately decrease overall business foster.To avoid this, a corporation should adopt anticorruption and anti-bribery corporate social responsibility strategies. When a corporation refuses to occupy in dishonest activities, it reflects positively on corpo rate operations and adds to a just political climate (Stewart 2009). In addition, a contribution to a smooth trial government benefits corporations because they can contain with hardly a(prenominal) governmental interventions and also save flavours by avoiding bribes. 7 (3) Local economical Development Corporations may read to invest in local economic development.As a method to spur business proceeds corporations provide microfinance loans to local start-up or pure businesses inside the community. Business solicitude courses that pass along knowledge concerning entrepreneurship and sustainable business are another serious corporate social responsibility economic development utility(a) (Stewart 2009). In addition, contribution to infrastructure much(prenominal) as roads, ports, and city centers are dependable for local trade because goods can be more efficiently transferred over a broader region. 4) Education and Training If a corporation employs good deal from the lo cal community, it is necessary that these mint are handy adequately. Education desegregation into business operations is imperative for social development (Nelson 2006). Corporate social responsibility cogitate on educational development helps lot live on more independent by teaching them skills that will property to being more rich members of society. This emblem of corporate social responsibility strategy, creates valuable human capital. Corporations could occupy to focalisation on primarily employee training or demand to flow go to the entire community.The last mentioned would consist of supporting primary to third schools in parade to invest in local human capital for effectiveness future employees. The locally operating corporations will be more efficient with trained and educated employees who gain business and operations skills. 8 (5) Health and Wellness Access to wellness anguish service attributes to fitter community members, therefore extending a person? s work life and better productivity. Business works best when operating in stable and inviolate societies, (Plugge 2004) in which a healthy workforce plays an important role.Corporate social responsibility health and wellness strategies may include education about basic hygiene, nutrition, and sanitation. Corporations who open access to basic medicines come down the guess of many popular illnesses that could be avoided or pregnantly cut down. All of these benefits contribute to stronger, healthier, and more productive employees. (6) sex activity Equality and Women Empowerment Evidence shows that empowering women contributes to positive socio-economic development at heart communities in developing countries (Malhorta et al 2002, 33).Female leadershiphip programs, gain corporate employment of women, provide microfinance loans for female entrepreneurs, and express strict sexual harassment corporate policies are all possible corporate social responsibility gender equality initiatives (Plugge 2004, 6). By empowering women, more people are added to the work force, more businesses are substantial, and familial relationships are more equalized. As a result, the community becomes increasingly competitive. (7) Employee Volunteerism Highly fitted professionals immigrate into local developing communities when a large business opens.These people have birthd ample training and are intellectually 9 qualified to operate a business on multiple levels. Using employee volunteerism indoors the local community is another example of a beneficial corporate social responsibility strategy. Depending on each employee? s skill set, corporate volunteers serve the community by improving local business strategies, infrastructure, education system, and populace work. Studies have shown that employees desire a finger of self-worth and a belief that their work provides value to the community, rather than solely receiving high salaries (Shayon et al 1975, 2).Employee vol unteerism fulfills this desire for importance in corporate work. When employees participate in volunteer work they also gain and perfect skills that will be more effective inside corporate operations. Hence, this corporate social responsibility technique improves employee morale, provides needed services to the community, and advances employee skills. Corporate Social Responsibility Implementation Techniques Corporations prefer from a variety of execution of instrument techniques in order to maximize the positive effectuate of each corporate social responsibility strategy within communities.Specific techniques are aimed at mobilizing not only money, but also the company? s people, products, and premises to help support and strengthen local communities and non-profit henchmans (Nelson 2006, 7). Discussed below are examples of corporate social responsibility performance techniques that transnational corporations invest in. 10 (1) Philanthropic Cash Donations The philanthropic cor porate donation phenomenon began in the United States during the twentieth carbon with business leaders much(prenominal) as Rockefeller, Mellon, Ford, Gates, Kellogg, and Packard.This type of relationship is establish upon responses to non-profit requests for donations with simple check-writing, rather than a deeper interaction with charitable organizations. Interactions between corporations and non-profits are normally infrequent, with low utilizement, and do not apply strategic planning. The basis for this execution of instrument technique is to promote company image in a way that consumers and stakeholders perceive a compassionate and responsible asylum. On the flipside, nonprofits go through the necessary funding to entertain service operations (Austin 2004, 4). 2) Independent usefulness supplier Less normally pursued, corporations may choose to develop an in-house philanthropic service discussion section to carry out their corporate social responsibility strategies. This plane section would act as the management team for the creation and effectuation of corporate social responsibility strategies self- tell from non-profits, non-governmental organizations or the government. Nonetheless, consultation from these service organizations and the government occurs because of their specialized understanding of philanthropic initiatives which the corporation does not possess.Employee volunteerism would be the most common resource used within this writ of execution technique because it is one of the most kind assets the company holds. 11 Direct Corporate Humanitarian Investments represent another form of independent service provider implementation technique that corporations autonomously develop. This technique involves a theatre using its resources and know-how to alleviate a particular instance of human misery (Dunfee Hess 2000, 95). Corporations with specific niches in a development sector best optimize this technique.For example, the pharmaceu tical company, Merck, held the apparent(a) to the drug that controlled river blindness. Hence, Merck was the only entity that could distribute this drug individually to developing communities for a reduced price. (3) Partnerships Corporate and social sector leagues resemble a joint-venture relationship in order to fulfil common philanthropic goals central to the mission of each trigger. Within the compact each organization shares its resources equally and oftentimes happens about specific initiatives.In addition, the managerial complexity demand within a confederation typically precipitates a separate department to direct manage and implement the two-sided exchanges (Austin 2004, 4-5). In contrast to the previous(prenominal) implementation techniques, corporations acting in a compact focus on specific initiatives and programs. For example, cause-marketing, purpose development, and synchronization of strategies are all activities confused within corporate and non-pr ofit confederacys. Multinational corporations play an additional role in fusion corporate social responsibility implementation.Specifically, multinational corporations frequently participate in cross-sector partnerships because most have a mission to get with the local community. Not only do corporations transfer technology and economic 12 development, but also their values and social policies (Austin 2004, 35). This adds another level of influence within the partnership. Methods of how corporations establish partnerships include social networking, preceding(a) relationships, connections through acquaintances, cerebrate institutions or an tie-up with a specific cause.Typically in developing countries partnerships are with reputable non-profits or non-governmental organizations. Corporations partner with mostly traditional institutions because of their ceremonious reliability and proven success. In more liberalist developing countries relationships could be developed with l ocal service organizations, but in more underdeveloped countries multinational western establish service organizations are used. A partnership acts as a form of risk-management for both the corporation and non-profit organization.Corporations utilize a partnership as an effective tool to address incurred harm to the community from business activities or as a resource to dismantle future issues (Austin 2004, 34). Specifically in industries that produce negative externalities, a preventative alliance with a non-profit that specializes in neutralizing harmful business activities is exceedingly advantageous. Businesses cut-cost, improve existence image, and film with the local community with an launch partnership. Moreover, when a corporation partners with the government or provides a service to society, both parties create a win-win relationship (Steward 2009, 18).The government gains from the economic development, material wealth, and jobs that corporations provide. Corporations benefit from government investment in infrastructure and legal protections. In addition, the government determines laws and regulations that a corporation must sustain by. Thus, positive and reliable partnerships would influence the government to be more willing to 13 responsive to accommodating corporate needs. Governments are better off because corporations create an increase in gross domestic product, provide jobs to local citizens and contribute to national development.Non-profits and non-governmental organizations and gain from partnering with corporations. mount diversification and reducing dependence on human beings resources are the main examples of how these organizations reduce their business risks. Corporations provide a secure source of funding despite possible government fluctuations in monetary support. For example, if a non-profit organization relies solely on government funding and there is a change in government leadership, budgeting, or form _or_ system of go vernment that reduces funding to the non-profit, the organization would be at-risk of losing many resources.By partnering with corporations, non-profits and non-governmental organizations reduce their financial risk and gain valuable business strategy consultation. Corporate Social Responsibility Assessment Methods The valuation of corporate social responsibility initiatives is exceedingly important for organizational analysis and public awareness. Documenting corporate social responsibility investments may influence corporations to be more accountable and take more ownership over their activities because it will be appraised by corporate and public experts.Firms use a variety of corporate social responsibility judging methods in order to internally pass judgment and externally report their corporate social responsibility investments. Reporting quantifyments may be an important and efficient way to communicate corporate social responsibility investments and achievements with ac ademia, the financial community, government, policy get outrs, regulators, interest 14 groups, non-governmental organizations, general public, the local community, employees, shareholders, and the industry (Tilt 1994).Jason Saul (2009) conceptualizes that at the end of the day we have to attest value, and the way we demonstrate value to business, and to society, is by speaking the language of the businessby speaking the language of measurement. Therefore, he argues that quantitative analysis of corporate social responsibility initiatives and reporting is a key component of corporate social responsibility management. In addition, if companies choose to use the internet and their websites to dispel their social and environmental activities they have the possible to increase their transparency.This is an advantageous mode of conversation because of its wide accessibility, low-cost, and ability to easily create in-depth or interactive tools (Line et al, 2002). The information gath ered from expert audits, annual reports, corporate social disclosure reports, environmental sustainability reports and corporate assessments can be used to assess the efficiencies and short comings of corporate social responsibility initiatives. outstanding factors to consider are generally firm transparency, corporate governance, code of conduct, corporate social disclosure, social mpacts, community relationships, product quality, and stewardship (Szablowski 2006, 49). doubting Thomas Haynes (1999) further recommends all companies measure four critical areas of corporate social responsibility 1) economic function, 2) quality of life, 3) social investment, and 4) problem-solving. However, Harold D. Lasswell would consider these four critical areas incomplete because it does not take into account the rating of corporate social responsibility investments and policies according to the assessment results. The corporate social responsibility goals must be specific and clear in order f or the evaluations to be 15 ffectively utilize to improve corporate social responsibility programs and investments or to propose alternatives. In the historic decade, corporate social disclosure reports are being more commonly used. These reports consist of voluntary and mandatory accounting of community issues above purely economic activities, much(prenominal)(prenominal) as human resources, community involvement, energy, product safety, environmental issues). The Corporate Citizenship Company, an external corporate responsibility and sustainability consulting firm, uses seven categories to assess the effectiveness of corporate social responsibility activities.Assessment Factors by Corporate Citizenship Company (Yakovleva 2005, 23) 1) Shareholders a. Return on investment b. Corporate governance 2) Employees a. stipend and Benefits b. Health and safety c. Training and staff development d. Diversity e. Communications 3) Consumers a. cost/ value b. Quality of product c. publici zing policy 4) Business partners a. Jobs sustained b. payment of bills c. Technology transfer 5) Government a. appraise contribution b. Local economic impact c. Transfer set policies 6) Community a. philanthropy contributions b.Local economic impact c. Transfer pricing policies 7) Environment a. Sustainable raw materials 16 b. Emissions to water and air c. Energy efficiency d. Waste management e. Reduced forwarding f. Consumer education In partnership with the Corporate Citizenship Company, the London Benchmarking Group analyzes corporate social responsibility investments and gives each program and service quantitative value. The LBG was founded in 1994 and consists of over 100 companies dedicated to measuring Corporate Community Investment. Hundreds of companies round the world use the LBG method to quantitatively value corporate social responsibility activities. Monetary values are applied to 5 readings of business activities 1) business basics, 2) mandatory contributions, 3 ) commercial initiatives in the community, 4) community investment, and 5) charitable gifts. These varying business activities accept corporations to classify a monetary value to a company? s corporate social responsibility inputs including exchange, time, in-kind, and management costs (Measure for Measure, 2004).The companies also assess their corporate social responsibility outputs and impacts in order to equate the net gains of corporate social responsibility investment. For example, new availability of cash or other resource, quantity of people supportered, and business benefits represent measurable outputs. Assessment tools have the authorisation to be extremely valuable in corporate social responsibility strategies. Companies should be evaluating the performance of their corporate social responsibility investments to gain further intelligence about how to efficiently improve the use of their corporate resources.However, topically corporations are not required by law to r eport their corporate social responsibility activities. Those that do report use diametrical methodologies, creating inconsistencies in appraisals techniques. 17 Some models that companies are presently using could be omitting of the essence(p) key factors in corporate social responsibility efficiencies, thus, providing incomplete information. A extensive corporate social responsibility evaluation model needs to be established in order to effectively assess and improve corporate social responsibility activities. 8 II. Historical Trends of Corporate Social Responsibility Strategies Implemented by Corporations in Brazil Background Corporate Social Responsibility in Brazil throughout Brazilian history, philanthropic and charitable donations were evidentiaryly represented in the nation? s culture. Since the colonial pointedness, the Catholic church service has shake up the establishment of many civil society organizations that carry out needed services for society. This movement grew during the industrialisation finish and gained comforting public support.During military rule, civil society organizations diminished in quantity because of the extremely concentrate government. By the democratization period during the late 1980s until present, more and more corporations have adopted corporate social responsibility initiatives, thus, influencing a shift in Brazilian business culture. Brazilian society appeases extremely centered around philanthropic concerns, which is made evident through a study cited by Cappellin and Giuliani. In 2000, 70 pct of the adult population gived goods and money to social organizations or people in need (2004). chthonicstanding the historical trends of the evolution from philanthropy to corporate social responsibility strategies will provide more shrewdness into the analysis of digging company corporate social responsibility and how it could be most effectively implemented. Brazilian colonial development was originally based u pon an agricultural break ones back delivery under an authoritarian and centralized government. The country? s colonial origins also influenced the predominance of the Catholic church building in Brazilian society. The state collaborated heavily with the Church.Responsible for public services including education, health and social welfare, the Church played an important role in connecting 19 the state to its people. After the withdrawal of Church and state in 1891, the Church continued to invest in schools, hospitals and charitable works (Landim 1998, 68). During this period, popular Catholicism stimulate the establishment of the first societal associations, including the most notable Brotherhoods of Mercy. These endeavors were sponsored by the business elites, who helped in establishing a philanthropic cultural norm among many wealthy citizens.These associations were used for worship, as well as creating some of the first hospitals, homes and psychiatric hospitals (Landim 1998 , 67). Corporations did not notably donate to philanthropic associations, but business leaders contributed individually. The state managed Brazilian society in a hierarchical fashion that kept up(p) power and wealth within scoop authoritarian elite. For example, societal changes generated by industrialisation in the late nineteenth snow were managed using discernments between the dominant elites (Landim 1998, 64).Under governance, the Brazilian rich became relatively richer while the poor became relatively poorer. This disparity is evident to this day. During the industrial enterprise period between 1822 and 1930, the government established associations to provide services and resources to the unemployed as a strategy to attract unusual workers. Trade unions gained momentum during this period, as well. Thus, businesses were compel to deal with employee rights and services in order to contract with the trade unions.James Austin notes that if corporate social responsibility was implemented, it only extend to corporate employees (Austin 2004, 29) during the industrialization period. Military governments controlled the state from 1964-1985. They prioritized economic growth through expanding its industrialization system to diversify from the 20 previous mono-culture agriculture of sugar, rubber, coca, and coffee (Schroy 2006). In the mid-twentieth century the military government instigated anti-inflation policies and invested in economic infrastructure industry, transportation, and power, but failing in essential reform of public education (Evanson 2002).In addition, this period also marked the retrenchment of social organizations and social movements. The state controlled all social initiatives from education, to social security and health cathexis. Consequently, the evolution of corporate philanthropy into Brazilian business strategy became extremely limited. However, the Brazilian non-governmental organizations, civil society organizations and non-profi ts that did operate during the period of military rule were given borderline supported by the government, so some organizations turned to corporations as a source of resources and funding.This process led to significant alterations to how Brazilian social organizations strategized their operating models (Austin 2004, 207). Corporate Social Responsibility in Brazilian Business Culture In Brazil, like elsewhere, companies are being challenged to better strategize their corporate social responsibility resources in order to become a part of the shifting paradigm that businesses should implement corporate social responsibility initiatives in their development. A survey conducted by Instituto Ethos (2002), a Brazilian corporate social responsibility on-profit organization founded in 1998, reveals that Brazilian consumers expect ethical behavior from companies. It is no longer acceptable for a corporation to produce negative externalities without engaging in activities to recuperate and c ompensate those who are affected. On the other hand, Brazilian consumers seek out 21 companies that operate sustainably, collaborate with the community, and provide quality working conditions (Instituto Ethos 2002). Corporations increasingly open more resources to their corporate social responsibility initiatives as a result of public pressure and evolving business missions.In the 1990s, an increase in civil society organizations occurred because of the changing preservation and collaboration of business leaders. Liberalizing the Brazilian economy presented many challenges due to over 25 years of strictly regulated military rule. After eradicating most trade barriers, local Brazilian businesses were faced with intense international competition that nearly suffocated local businesses. This created an extremely unfavorable economy for corporate allegiance to factors outside of direct business activities, such as corporate social responsibility.Instead, business leaders personally f ounded third-sector organizations in order to influence legislation and public opinion regarding issues they were most passionate about. For example, a group of business people who all had a mission to mobilize, encourage, and help companies manage their business in a socially responsible way, established Instituto Ethos. Once the Brazilian economy began to recover in the mid-1990s, businesses slowly started engaging in corporate social responsibility initiatives once again, first with charitable big(p) (Austin, 2004) to many of the newly established third-sector organizations.The increase in research, academic studies, dissemination pieces, and broad media communication about corporate responsibility initiatives has further influenced businesses to participate in corporate social responsibility activities. The stronger spotlight on this shifting business paradigm further increases awareness and promotes widespread expectation of corporate social responsibility investment. 22 Brazi lian Government Social Policies During the early part of the twentieth century, civil society organizations quick gained a strong presence within Brazilian culture.In 1938, the Decree-Law was enacted establishing the Conselho Nacional de Servico Social (National Social Service Council or CNSS) a linkage institution between the state and public sector. The institution? s main duties included implementing and assessing attend to to the poor and determine which nonprofits should receive government funding. In addition, the Legiao Brasileira de Assistencia (Brazilian Legion of Assistance or LBA) was established to serve the needs of the noticeably vulnerable portions of the population, for example, young churlren, pregnant women, and the elderly.These services were carried out with the partnership of social or church organizations. These departments of state maintained a social network within the government and society that set a precedent for subsequent social governing and Brazil ian culture. The military acted as a highly centralized functioning government from 1964 to 1988. Under military rule, the government directly controlled the economy, national development, and social service agencies. The military focused on rapid economic growth and expansion creating the Brazilian Economic Miracle. From 1964-1972, Brazil god an average of 10% GDP growth (Schroy 2006). Despite its economic achievements, Brazil neglected education and health care reform leaving a significant portion of the population in poverty (Evanson 2002). By the end of military rule, the economic disparities between the rich and poor were big creating the societal need for poverty assistance. 23 The current democratic government and opus were founded in 1988 after the military release governing power. In light of the experience under the military governments, the 1988 constitution directly protects Brazilian civil rights.It is best cognize as the Citizen Constitution due to the state? s inscription to enhancing social policies and argue human rights (Austin 2004, 210). This philosophy aids in developing and maintaining civil society organizations that contribute to reducing poverty, improving health care and education, and protecting the environment. Government regulation of business also reflects the protection of civil rights. For example, in 1995 the Environmental Crime Law was enacted to give citizens the right to sue business executives in court if they do not watch ith health, environmental, or safety standards (Cardoso 2003). To understand the remain needs and opportunities for corporate social responsibility contributions, it is important to understand existing social policies. Currently, the Brazilian government actively implements social service programs for poverty alleviation and social safety protection. The government of President Luiz Inacio Lula da Silva established the Ministerio do Desenvolvimento Social e Combate a Fome (Social Development and trash Against Hunger Ministry or MDS) in 2004.This ministry enacted Assistencia Social (Social Assistance), Bolsa Familia (Family Bag), Seguranca Alimentar e Hutricional (Food and Nutrition Security), Inclusao Produtiva (Production Inclusion), and Avaliacao e Gestao oa Informacao (Information perplexity and Evaluation) all aimed at elevating poverty and promoting human development (Desenvolvimento Social, 2010). As a result, Brazil? s poverty rate declined by 20 pct during the 1990s (Cardoso 2003). Bolsa Familia was created in 2003 as a 24 ethod to reduce short-term poverty and combat long-term poverty by requiring children to attend school and become vaccinated. Currently, the program provides 11 billion families with US$44 a calendar month (Casanova 2009, 141). The past decade has shown even more social improvements. The World Bank justifies that living on less than US$1. 25 equates to living in poverty. In 2003, 22. 9 portion of the Brazilian population was impoverished, bu t by 2009 only 10 share of the population was impoverished (Santos 2010). It is important to note that there are still many weaknesses within the social system. 3 percent of the active working population does not qualify for unemployment or social insurance, leaving them at risk against sickness, accidents or pregnancy leave. At the same time, 20. 3 percent of children are still living in poverty (Santos 2010). Overall though, the system as a whole has been effective in reducing poverty. Brazilian Government Environmental Policies The government has a formal consignment to sustainable development in addition to improving civil society. For instance, the Brazilian Environmental Protection and Licensing Plan requires corporations to receive a Previous clear? Installation License? , and Operation License?. At each stage, environmental risk assessments must be completed by the company and sanctioned by the environmental government agency, Insituto Brazileiro do Meio Ambiental (IBAMA 2010). At any time in the application process, the Brazilian government has the right to halt construction. Government regulations appear to be strict however, past precedent shows that the government encourages profitable resource inception industries, such as mining. Mineral exports are a robust commodity for Brazil impart to GDP and tax revenue for the quickly 25 eveloping nation. Therefore, the government reduces regulation and loosens its observe system in order to promote rapid resource extraction and increase national revenue. At the same time of the increasing expansion of the mining industry, the world-wide Council of Minerals and Metals, consisting of 19 robust multinational mining corporations, have set in place environmental and social commitments in an attempt to preserve environmental and social rights. separately mining project must receive a Social License to Operate from the internationalistic Council of Minerals and Metals.This requires consent by the loca l community through negotiations and written agreement of how the community will regulate mining activities. The firm is obligated to administer an environmental impact assessment to pinpoint dominancely hazardous affects on the environment and how it plans to reconstruct any degraded environments. However, the International Council of Minerals and Metals does not regulate corporate social responsibility initiatives. Companies themselves are responsible for implementation and assessment.Present State of Corporate Social Responsibility in Brazil Instituto Ethos, Brazil? s tumid social change non-profit organization, reports that more than half of Brazilian companies implement social policies (2010). unrestricted opinion continues to promote a shift in corporate culture to develop solutions to some of the country? s toughest problems such as, environmental degradation, poverty, and health care. The vast inequalities within Brazilian society have become a hot topic among internati onal development organizations. For example, even though Brazil? s economy is 26 anked as the eighth largest economy in the world (IMF 2010), 50 million people are living on less than US$30 a month. globularly, Brazil is graded 4th to last in income diffusion and 73rd on the Human Development world power (Austin 2004, 215). This wealth disparity highlights the extensive potential corporate social responsibility initiatives could have upon the disadvantaged populations. Corporations operating in Brazil view corporate social responsibility as a tool to specify trust among the public by servicing those who suffer from the unequal distribution of national wealth originally initiated by some of these corporations.SustainAbility ViceChairman Geoff Lye reasons that if business leaders can take a leak a difference but choose not to, they will live to sadness the disruptive social, environmental, and economic consequences that will result from failing to achieve development goals (Ly e 2006). purely focusing on firm profitability is not enough now. A corporation? s culture, impact, and globular image play an imperative role in Brazilian business activity. Businesses that do, however, chose to participate in corporate social responsibility initiatives usually focus on issues that have relevance to their own business activities.For instance, Roberta Mokrejs Paro and Claudio Bruzzi Boechat (2008) researched business priorities and corporate social responsibility initiatives of 30 Brazilian companies. The study uncovered that corporations prefer corporate social responsibility activities that are important for business activities. For example, the top four corporate social responsibility initiatives among the participants are in the energy, water, education, and environmental sectors. These were also the top four sectors for the implementation of business activities (Paro 2008, 539). 7 The Brazilian government heavily promotes corporate social responsibility activ ities, as well as, implements extensive corporate regulations in order to protect its environmental, social, and economic identities. Even though some business philosophies behind corporate social responsibility activities appear to be clearly delimitate and structured, often the reality is a distinguishable scenario. Emilio Klein a researcher at the International Labor Organization remarks about corporate social responsibility in Brazil Hopkins 2007, 177) in that country everything is there on paper, perfectly neat and rational. But when you check the reality then things are very different. I would say that roughly in Latin American large corporations, and almost all enterprises, lack something that is essential in the background of your definition fairness. They are inequitable with their stakeholders, both inside and outside, and they can be so because they have all the power, including of course the government. If you add to that their short-term perspective, then you get what we get in Brazil.Employees, customers, purveyors or whatever, are being squeezed and pushed around by business, particularly those related to basic services (privatized), financial services and commerce. Even though the Brazilian government has set into place complex social and environmental protection laws, the enforcement and regulation of these principles are extremely limited. Therefore, businesses easily take advantage of local communities by out maneuvering them through economic and political avenues. As a result, businesses typically operate according to their own motives, not the governmental guidelines.Instituto Ethos uses strategies such as expanding the corporate social responsibility movement, convert corporate social responsibility practices, creating a more favorable business environment for corporate social responsibility, and articulating corporate social responsibility within public policies to achieve their mission. Currently, this Brazilian corporate social resp onsibility organization has 907 member companies 28 who have employ about 1. 2 million people and contribute to about 30 percent of GDP. Business represents one of the most powerful groups in Brazilian society.Therefore, it is important that this sector engages in corporate social responsibility activities to achieve development success. In 1999, the UN Secretary General launched the Global narrow Program. This aims to coordinate business and corporate responsibility initiatives. Instituto Ethos organized a conference of over 107 companies to develop guidelines for Brazilian companies to participate in this Program. Fourteen principles were created 1) Indivisibility of rights (all human rights must be considered as a whole) 2) Meeting employee human rights should be viewed as positive and productive for business 3) Companies are leading agents for hange because of their large presence in society, 4) Possible new labor relations could be developed 5) Refuse child labor 6) Implemen t multiple intervention corporate social responsibility programs 7) Business participation in policy development for long-term commitment 8) Promote women rights 9) Environmental protection 10) telephone exchange knowledge and methodologies 11) Increase interaction with UN agencies 12) Pro-active mentation 13) Create methods for discussion 14) Monitor Global Compact indicators 29These goals represent key factors that Brazilian companies could address while constructing their corporate social responsibility initiatives. Because of the scope of corporate social responsibility options is broad, the presence of corporate social responsibility and corporate social moral sense create a favorable environment for further promoting corporate social responsibility into businesses not yet participating. Modalities of Corporate Social Responsibility in Brazil Within the Brazilian corporate social responsibility environment, corporations most commonly participate in civil society partnerships. A study conducted by James Austin (2004, 215) shows that of the 385 companies that participated, 85 percent rely on some variation of alliances with civil society organizations to implement social responsibility strategies. Of this group, 15 percent solely use partnerships to conduct their social practices, 37 percent use non-permanent partnerships, and 33 percent occasionally engage in partnerships. about often these partnerships are multi-sectored, because each civil society organization has specific niches that aid in the common corporate social responsibility goal.For example, businesses often partner with non-governmental organizations and non-profits that already have social management expertise to reduce implementation and operating costs for business social responsibility activities. In addition, corporations are amenable to working with local non-governmental organizations or non-profits because it can lead to positive community relations. In addition, corporations may als o choose to partner with the local, regional or national government to implement social initiatives. Business leaders often view Brazilian governmental organizations as non-cooperative, bureaucratic, slow, nd 30 inefficient. Therefore, business and government alliances tend to be infrequent in Brazil (Austin 2004, 220). However, these difficulties do represent an opportunity for businesses to recruit government entities and to provide advice on how to make the government processes more effective. For example, Naturas commitment to improving local public education in Itapeceriaca da Serra not only required the company to work closely with the local government quiz, but also led to the establishment of Barracoes da Cidadania (Community Shelters).This program is managed by the Municipal Secretary of Culture in order to provide needy children and youthfulness social and cultural activities and equipment (Austin 2004, 220). Even though such partnerships are becoming more prevalent, a s ignificant proportion of corporations? efforts remain un-partnered because of factors such as lack of confidence in civil society organizations, lack of information, and precedent frustration. 15 percent of the companies in the Austin? s sample do not engage in partnerships, but individually create and implement corporate social responsibility (Austin 2004, 219).Some company executives believe that they can better manage their resources independently because they have better control (Austin 2004, 219) than those firms who engage in cross-sector partnerships to implement their social initiatives. some other finding is that companies that incorporate corporate social responsibility into their business models are more likely to make profits than if they manage these factors as expenses unrelated to business strategies directed to enhancing good will, educate potential employees or provide health care to the community (Hamman 2003, 238).Company executives frequently commit to carrying out ethical business practices as a component of their corporate responsibility. This includes refraining from using 31 child labor, providing fair compensation, creating safe and comfortable work conditions, and operating within the legal environmental regulations. This promotes ethical business behaviors, as well as benefits the product and companies because they will avoid potential labor rights issues. Further, environmentally friendly operations reflect positively on the company and its products.The company also reduces the risk for governmental fines due to negative environmental impacts. Often companies whose business leaders choose to invest in green technology and environmentally sustainable business practices tend to become industry leaders because they are evaluating and strategizing how to improve their operations, as opposed to maintaining the perspective quo. Joint commitments to practice corporate social responsibility among firms at the same level within a specific industry have proven to be an effective tool to promote company investment in corporate social responsibility initiatives.These commitments consist of each company dedicating a standardized amount of business resources to corporate social responsibility. Therefore, no company can gain a competitive advantage by not engaging in corporate social responsibility, thus creating a level playing field within the industry. The International Council on Mining and Metals is an example of this type of alliance. The organization consists of 18 mining and metals companies, as well as 30 national and regional mining associations and global commodity associations.Its vision is to lead companies to work together and with others to strengthen the contribution of mining, minerals and metals to sustainable development (ICMM 2010). This alliance encourages mining corporations to participate in corporate social responsibility, which neutralizes potential disparities 32 between competitors because a sig nificant amount of the world? s most prominent mining companies are members of the International Council on Mining and Metals.Corporate Social Responsibility in the Mining Industry Mining company leaders argue that the extraction of non-renewable resources is essential to world development (Jenkins and Yakoyleva 2006, 271). They confine that newly discovered mineral deposits and ameliorate technologies will provide additional wealth into the world? s economy. Even though the mining companies claim that they are a part of an important source of global wealth, public opinion has largely focused on the negative externalities of mining activity.In response to this public cynicism, corporate social responsibility represents a valuable impression management tool that all prominent mining corporations utilize (Jenkins and Yakoyleva 2006, 272). Corporate social responsibility is treated as a strategic response to social challenges that inevitably chuck out from mining extractive operatio ns. Almost all mining companies allocate resources to these initiatives. Thus, it is necessary for corporations in this industry to participate in corporate social responsibility initiatives in some capacity in order to remain current among industry competitors.It has become standard practice in the mining industry to develop more environmentally and socially sense of right and wrong operational strategies. corporate social responsibility in the mining industry is viewed as a mechanism for maximization of positive and minimization of negative social and environmental impacts of mining, while maintaining profits (Acutt et al, 2001). According to a poll of the ten largest mining companies in the world, the number one reason for participating in corporate social 33 esponsibility activities is to contribute positively to brand reputation. additional incentives are to increase value to shareholders, maintain relationships with the domestic government, and satisfy socially sense of rig ht and wrong consumers (Hamann 2003, 242). Not only is corporat