Fifth International Research Workshop on Asian Business Singapore Management University, Singapore 13 April 2009 Abstract
The paper adopts a social benefit-cost analysis framework to look at three stages in the historical development of management of stakeholder capital of corporations in the Philippines. The first two stages were government-driven. Stage One is internalization and moderation of some social costs starting with the Environmental Impact Statement System adopted by the Philippine government under President Marcos in 1981. Stage Two consists of reforms in the political economy started in 1992 by President Ramos to reduce rentier profit-making and regulatory capture by big corporations. Stage Three has been internally driven from within the Philippine corporate sector. It consists of corporations assuming social development roles and generating social benefits through CSR (corporate social responsibility) policies and programs. It gradually developed during the last two decades or after the February 1986 People Power or EDSA Revolution. The CSR in top Philippine corporations, especially among the larger conglomerates, is studied and analyzed to discern patterns meaningful in the context of Philippine economy, society and culture. The issues and challenges are next outlined. Finally, speculative pessimistic and optimistic Stage Four scenarios in Philippine and East Asian contexts, particularly with reference to Chinese-Filipino conglomerates, are drawn up.
The objectives of this paper are (i) to describe the achievements of, and challenges ahead facing CSR of the Philippine corporate sector with focus on Philippine conglomerates, (ii) to understand how CSR fits into a historical pattern of changes in stakeholder capital management by Philippine corporations, and (iii) to identify patterns in emerging developments in CSR in the Philippines. Corporate social responsibility (CSR) in the Philippines is better understood in the long-term context of development of how the Philippine corporate sector views and manages their stakeholder capital. This is the basic approach adopted in this paper.
B. Concepts and Framework
The European Union defines corporate social responsibility (CSR) as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.”1 The ISO 26000 Working Group on Social Responsibility adopted the following working definition in its meeting in Sydney last February 2007 as: “social responsibility (is the) responsibility of an organisation for the impacts of its decisions and activities on society and the environment 1 EU: Implementing the Partnership for Growth and Jobs: Making Europe a Pole of Excellence on Corporate Social Responsibility. 22 March 2006.
through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organisation.”2 The prevailing definitions of CSR often incorporate the three criteria of sustainable development – economic, social and environmental – which was adopted in the UN Conference on Environment and Development or the Rio Summit in 1992. Corporations create value using tangible and intangible assets, where the contribution of intangible assets is generally greater.3 The intellectual capital school4 of knowledge management (KM) addresses the task of managing intangible assets. It views intangible assets as consisting of three forms: human, internal and external. Most KM practitioners also refer to these three forms as human capital, structural capital and stakeholder capital,...