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Good corporate citizenship a part of business sector’s evolving role

ASK a dozen people in the street what corporate citizen-ship means and the chances are that half of them won’t know, and the other half will give you quite differing answers.

And, if you were to seek a business view on corporate citizenship, the answers would be equally divergent.

Corporate citizenship is not easily defined, and that is one of the problems. It is a term that is being used by business, governments and academics to capture the changing relationships between business and communities.

What is changing – the demand for knowledge

The Internet is used as a tool to seek and capture information on all manner of things, from real-time to historical data and information. It is used as a coordinating medium, to agitate for change, and to educate.

Once the demand for knowledge was established, the next step was to agitate for business to supply more information.

Why should business meet that demand?

Through using the Internet (and other media), individuals or groups are able to apply political, purchasing, or publicity pressures to business.

Welcomed by many communities and community members, this knowledge demand is seen as a process that empowers them to start to assert a degree of control over those things that may affect their lives.

Corporate citizenship is, in one sense, the process that business is using to recognise its newly understood community power.

It is, however, much more.

Corporate citizenship also has at its roots the understanding that a modern business is interactive with a broader number of groups than the original shareholder model. These groups now include employees, communities, governments, non-government organisations, customers, issues groups and so on.

The fundamental driver of business has not changed, however. A business must strive to be profitable and make best use of its resources. A corporately responsible business does no one any favours by going under.

What has changed is the manner in which business is expected to interact with its communities through the broader stakeholder model.

To get the best out of employees, from shop floor to the board, businesses need to understand that people, their stakeholders, are largely driven by ethical behaviour. They do not leave their values at home when they come to work.

Not having a clear definition of corporate citizenship has led to many businesses being hesitant to fully engage with this new business model. There is a degree of ‘wait and see’ – will this be another flavour of the month to already over-stretched company resources?

I believe not. A major aspect of corporate citizenship is

the way that you engage with your local communities through accepting their importance to your business activities. This concept is not new.

Any successful small business is deeply committed to respecting its local communities, for without them they do not have a future. These communities can and do directly affect a small business’s ability to continue operating.

This realisation is becoming recognised in the corporate world as the power of the new information age becomes more apparent.

Every corporation, every large, medium and small business, must plan to the future to be successful. If those plans do not include corporate citizenship, then all of their future risks have not been addressed.

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