Corporate Social Responsibility (CSR)

CHAPTER 1

INTRODUCTION

Corporate Social Responsibility (CSR) is a relatively new term that been in existence for less than a century. This term involves that involves companies managing their business processes in a way that produces an overall positive effects on society, is a trend that has caught on in the business community. Currently, businesses of all nature, all over the world, have subscribed to this ideology and are positively giving back to society in all manner of projects. However, in their quest to achieve CSR, companies face many challenges that are brought about by both internal and external factors. The factor that this research has sought to examine is the economical factor and to be more precise the country in which a given company is positioned. The research sought to bring out the fact that there is a difference in the successful implementation of CSR in developed countries as compared to in their developing counter parts, placing much emphasis on the developing countries (Huniche, 2005 p. 10).

Corporate Social Responsibility has taken firm root in the global community. Presently, one can go as far as argue the fact that there is a ‘social contract’ between most if not all corporations and the particular societies in which they operate[1]. Actually, Blowfield and Frynas (2005) have argued that it is possible that one of the reasons why CSR and international development practice have moved closer together is that they share and reinforce assumptions that poverty and marginalization [as an example] are fundamentally matters of geography, identity or difference, rather than structural phenomena. On the other hand, this rapid growth of CSR has been said to have been attributed to an element referred to as ‘mega-diplomacy’ by ParagKanna. In an interview with Wharton Professor Steven Kobrin (2011, p.1) about his book “How to Run the World”, ParagKanna quotes that,

“mega-diplomacy is this realization that all of these different players - corporations, NGOs, governments, international organizations and entrepreneurs - are coming together into one common collective diplomatic arena. That everyone is negotiating with everyone all the time and that the solutions to our problems - whether it is arms control, poverty [or] climate change -- do not lie simply in top-down centralized solutions of inter-government organization. They rely much more in coalitions that bring together the corporate world, the civic world, the governmental world and even the religious sphere as well.[2]”

The United Nations, in 2006 set up a set of Millennium Goals for developing countries that were aimed towards driving the countries towards the achievement of better lives for their citizens.  This goals aimed to establish a ‘a world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment’[3]. The fact is that every developing country’s government is faced by challenges that involve either some if not all of the problems mentioned in the UN agenda. It is around these very same problems outlined by the UN that commercial social responsibility is framed in the developing countries.

In these countries, society’s needs keep on exceeding state and government capacity making it imperative for the private sector to step in and get involved. The role played by the private sector in the development of any given country is immense. In fact, “implied in the debate is the idea that the private sector is the dominant engine of growth – the principle creator of value and managerial resources – and that it has an obligation to contribute to economic growth and opportunity – equitable and sustainable.” (Jamali & Mishak, 2007, p. 362)    

The current situation in developing countries and what has been going on for a long time has been the involvement of non-governmental organizations in offering support where the government strained or failed. What most people fail to understand, is that those NGO’s get their funds from international donors who in turn get the funds from private sectors and privately owned entities (Buth, 2006, p.40).

What is becoming evident is the fact that CSR is now becoming ‘household’ name. Not only is it well established, but also one can go to the extent of saying that it is expected from the corporations in developing countries. The reasons for this establishment vary, for example, in a recent article in the Time magazine written by Knowledge @Wharton[4], it was stated that “companies care about CSR because their customers do”. The down side to such a development would be the fact that where the customers did not care about CSR, the companies would probably not.

While accepting the fact that CSR is becoming a business as usual its rate of acceptance as well as assimilation in the developing country is much slower than in the developed countries. Some of the main causes of this slow assimilation include the fact that economic growth is the center of most societal expectations in these countries. In such a situation, it is evident that projects to do with CSR would be given lesser priority (Khan, 1985, p. 157). Despite this fact and many others, there have been companies in developing countries that have been able to successfully embrace CSR.

The Boston College Carroll School of Management Center for Corporate Citizenship, “believe that four core principles (Scherer & Palazzo,2008, p. 63) define the essence of corporate citizenship, and that every company should apply them in a manner appropriate to its distinct needs: minimizing harm, maximizing benefit, being accountable and responsive to stakeholders, and supporting strong financial results.”[5] Looking at these core principles, where they can and should be applied in addressing the critical issues of human development and environmental sustainability in developing countries, a key question arises: Can a business strategy based out of Corporate Social Responsibility (CSR) as a differentiator ensure a sustainable growth in an underdeveloped country?

To be able to answer this question, our research settled for Haiti, a country ranked to the poorest in the western hemisphere and a country in which I am CEO of an IT firm titled COMPHAITI S.A. The company had at the time of the research been in business for the past 16 years; the previous seven (7) years were also devoted to an IT business making it a total of 23 years in the sector. Running a company such as ours in the Haiti business environment is no easy task. One has to always know how to intertwine Leadership and sustainability, to be able to continuously grow in the changing global environment. This is a common factor in both the developed, developing and underdeveloped countries.

In Haiti, the business environment is always under constant threat. This is due to a number of factors such as the lack of law enforcement, lack of justice, and lack of regulation. Furthermore, there is a perception of an endemic corruption with Haiti being ranked 142/165 on the 2012 corruption perception index. Despite the social obstacles placed before us that were likely to affect the company, it has been able to thrive in the Haiti business environment. However, in 2011 the current Haitian government launched a “Haiti is open for business”. The main aim of this initiative was to open up the Haiti market for trade and investment. This would also mean that our company would have competition. Thus there was need for the company to think outside the box and incorporate an idea that would make us stand out from the crowd. The company finally settled on the element of social responsibility. This was however not an easy decision considering the high levels of corruption as well as smuggling which we were sure the Haiti government was aware existed. The dilemma faced by the company and that which later led to this solution was echoed by Theodore Lewitt in his Harvard Business Review article ‘The Dangers of Social Responsibility’, in which he cautions that ‘government’s job is not business, and business’s job is not government’ (Lewitt, 1958, p. 47).

Social responsibility is a noble gesture to pursue for any business. However, practicality was needed before implementing our decision. This practicality involved examining CSR in the context of Haiti and how practical setting it up would be. The challenge of creating a culture of corporate civic responsibility is much more challenging in a developing economy. This is due to the fact that in such countries, their economy does not have the luxury of resources to engage in philanthropic programs. Therefore, it is not part of the psyche of a growing entrepreneur still under development to engage in such an activity as social responsibility. In settling for Corporate Social Responsibility, the company and I hypothesized that CSR did not necessarily adversely affect the long-term bottom line of a corporation; and furthermore that it was a necessary mindset to create a stable and sustainable economy, environment, and society. We believed that for the company to maintain the lead in the market as well as remain sustainable was to apply three main steps towards rewarding social responsibility. First, we would employ a “Strategic Corporate Social Responsibility” to ensure sustainable financial growth then employ “Corporate Citizenship” that would align with the States’ or governmental orientations that would ensure sustainability with respect to the community in which business is operating. Finally we would use “Responsive Corporate Social Responsibility” within the business itself to create goodwill, reinforce pride within internal stakeholders and improve relations with different other stakeholders.

To further understand the extent to which the CSR approach would be applicable to our company in the environment in which it was in (Haiti), the company through me decided to carry out a research. The research involved looking at the CSR approach in low income economies from the following standpoints: leadership, business sustainability and financial growth. This research would be divided into two main study points. The first involved a review of the literature about Low income economy, Social Responsibility, Business Practice and Sustainability all based on searches of some academic and professional literature on leadership and CSR as well as a keyword search on Social responsibility such as Sustainability, Corporate Social Performance, Business Ethics, Corporate Citizenship, Corporate Governance and Best Business Practices. All examinations took into consideration definitions and perceptions before 2000 but mainly focused on the outcome from 2000 to present. All references come from scholar journal articles, books chapters, articles from popular press and expert essays.

The second part of the research was in two folds. The first section developed a conceptual framework that was used for evaluating the benefits of a CSR strategy for business in developing countries. Using the results from the conceptual framework, we then applied that knowledge with a case study of the major issues affecting CSR practices in Haiti. The conceptual framework was completed by combining a Quazi and O’Brien (2000, p. 38) two-dimensional model. This model positioned actions in terms of whether their strategic motivation as far as their responsibilities are concerned was narrow or wide. In our case, would our company really benefit from CSR or action or would it be a cost for us. All this in an effort to bring out the four prevailing CSR justifications which are the Moral Obligation, Sustainability, License to Operate and Reputation (Porter & Kramer, 2006, p. 3). This would then assist in the analysis of the three CSR approaches whether strategic CSR, responsive CSR or the adoption of corporate citizenship and the position to adopt should a company opt to use CSR as a differentiator.

The conceptual framework part of the research was therefore achieved in three main parts:-

• A summary of CSR actions reflected by a sample of 10 to 15 prominent multi-national corporations and well established locally-based firms operating in Haiti. Information on these firms was obtained from a review of annual reports, mainstream media and company websites. These 10 to 15 companies were identified following a web search of companies using such keywords as corporate social responsibility, corporate social accountability, philanthropy, corporate giving and charity in the Haitian context. The websites were also scanned for programs or events connected to the above set of words.
• As research tools, I developed a simple questionnaire for interviews with the actual CEO,s of the 10-15 companies, about their motivation for adopting a CSR strategy and the way they also perceive the other companies being part of that survey.
• A presentation of the CompHaiti case as far as Social Responsibility is concerned in the territory of Haiti combining therefore a philanthropic, a responsive and a strategic approach all in one.

Following the introduction of the problematic question about Corporate Social responsibility and its role in company sustainable financial growth if used as a differentiator, the Master thesis consists of five chapters.

Chapter 1 discusses the theoretical background of the thesis by analyzing the requirements for CSR in smaller scale economies.

Chapter 2 presents a conceptual framework to be used in analyzing the actual position of CSR in Haiti based on researches and surveys on a sample of companies.

Chapter 3 introduces the methodology of the research and discusses the results. As most social science research involves both inductive and deductive reasoning processes at some time in the project.

Chapter 4presents the economic climate, evolution of business culture and business ethics in Haiti from an environmentally responsible and ethical private sector point of view. This chapter also presents the COMPHAITI case while making an overview of the history, regulations and analysis of the current development of Corporate Governance in Haiti.

Chapter 5 presents a summary of the conclusions.

This approach should provide a useful way to present an overview of Corporate Social Responsibility in a developing country such as Haiti and a framework for further research and study.

References

BUTH, V. (2006). Capacities of participative governance: the role of NGOs in EU politics. München, GRIN-Verl.

HUNICHE, M. (2005). Corporate citizenship in developing countries: new partnership perspectives. Copenhagen, Copenhagen Business School Press.

JAMALI, D., MISHAK, R. 20007. Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics 72, 362.

KHAN, A.F. 1985.Business and Society, S. Chand & Company Ltd., New Delhi.

SCHERER, A. G., & PALAZZO, G. (2008). Handbook of research on global corporate citizenship. Cheltenham, UK, Edward Elgar.

LEWITT, T (1958), ‘The dangers of social responsibility’. Harvard Business Review, September–October, 41–50.

 

 

 

 

 

 

CHAPTER 2
LITERATURE REVIEW
This chapter discusses the theoretical background of the thesis by analyzing the requirements for CSR in smaller scale economies. This will be achieved by looking at the practicality of applying CSR in developing countries and to what extend this has worked. The key issue is to determine whether what CSR has done for the developed countries can be applicable to small developing countries or whether these are theories and that it is impractical to apply the practice of CSR in developing nations.

ARE THE REQUIREMENTS FOR CSR IN DEVELOPING COUNTRIES THEORIES?
In underdeveloped territories it is a fact that the needs for fundamental issues as stated by the Millennium Development Goals are more obvious than in developed countries. However, it is also a fact that lots of articles, researches, essays talk about how to address those fundamental issues in the developed countries, and the way corporations should behave to be responsibly perceived. Thus studies from the likes of Jamali & Mirshak, (2007, p.243-262), Porter & Kramer (2006), Delatour & Duggleby (1993), and Kay & Lewenstein, (2013) that there is still hope in the integration of CSR into the economies of developing countries. The key point however is how CSR can be incorporated into developing countries without the involved stakeholders feeling that they are being short changed.

Big corporations have tentacles in almost every single part of the planet one way or another and addressing them to adopt a responsible behavior, does have a positive impact on the planet. Thus one can conclude that these companies do have a lot of influence in the activities that go on in the day to day global happenings. This has shifted the world’s perspective of the corporate and business world with the roles of corporate changing to adopt with world trends as well as global happenings. One of the necessities that have now developed into a global trend is social responsibility. Nowadays companies are expected to do a bit more than focusing on profit. Depending on the territories and sectors in which they perform, and whether it be within a developed country or developing one, there are some societal expectations that vary from engagement in local communities with education to environmental standards, through health and safety standards in the absence of formal regulations, to name just a few. Kupper (2006) states that law; social roles and morals are three important criteria of responsibility. Actions labeled “social’ but taken as a means to economic ends then cannot belong to CSR as in its purest form social responsibility is supported for its own sake because it is the noble way for corporations to behave.” (Schreck, 2009, p.76). In fact, social responsibility has become a very big trend that myriad organizations rank companies based on their corporate social responsibility and these ranking attract lots of publicity.  As a result CSR has emerged as an inescapable priority for business leaders in every [developed] country according to Porter and Kramer (2006).

On the flip side, what is the definition of CSR in a developing country’s context?

What about smaller corporations in developing territories?

What of the small to medium size corporations (SMB) in underdeveloped countries?

Can they also have their participation in the planet-people-well-being?

If so what would be their contribution?

How can they be socially responsible and be at the same time financially sustainable with all the challenges they face; challenges like education, corruption, culture barriers, just to name a few?

By answering these questions, the literature review will be examining the practicability of adopting CSR in developing countries and in this case Haiti. One of the ways as we will see further is a good balance of all combinations to mix social (environmental) implications with the external stakeholders with those of the internal ones addressing work environment and safety while offering products and services that are part of a strategic approach to CSR.

What is the definition of CSR in a developing country’s context?   

Research has shown that the implementation of CSR in developing countries, though slow is possible. First, it has been found that in these countries consumers prefer to purchase products from and invest in the shares of those companies caring for environment (Zaman et al 1996, p.618). Secondly, countries like Haiti are getting more and more exposed to international standards, despite the CSR phenomenon still being at a very early stage. However, it is starting to gradually gain share. In developing countries, there are different schools of thought as far as CSR is concerned. Amongst the many, there two are the most prevailing ones. The “classical view” propagates that business has the only responsibility of supplying goods and services for a profit (Bhide and Stevenson, 1990, p.124; Friedman, 1970, p.122; Hass, 1979, p.34). On the other hand, the modern view, supported by scholars, sees business in a social matrix contributing to the welfare of society as a whole (Quazi & O’Brien 2000, p. 5). This school of thought supports the view that business is part of the greater society and it therefore has the responsibility of reaching beyond the narrow perspective of short term profit maximization (Quazi and O’Brien, 1996, p.4; Carroll, 1979, p.497). The first school is predominant in territories where the majority of corporations have limited financial capacities to adequately embrace the CSR projects.

Dobers, P, & Halme, M 2009, 'Corporate social responsibility and developing countries', Corporate Social Responsibility & Environmental Management, 16, 5, pp. 237-249, Business Source Complete, EBSCOhost, viewed 13 September 2013.

Dobers and Halme believe that a standard definition of CSR cannot be applicable to a developing country’s concept (2009, p.238). One may ask how this is so and why the definition may not be applicable to developing countries.

The most common definition of CSR comes from the World Business Council for Sustainable Development in 1999. This council sought to define CSR as ‘The commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life’. Thus, Dobers and Halme believe that ‘CSR is founded on the notion that corporations are in relationship with other interests in, for instance, economic, cultural, environmental and social systems because business activities affect – and are affected by – such interests in society. These relationships may have a strong economic dimension, but they may also have a primary focus on social and environmental concerns.’(2009, p.238) This being the case, it is then understandable to reason that given the difference in the economies of developed and developing countries, it is only logical for one to assume that the definition of CSR is bound to vary. Dobers and Halme believe this is due to the term ‘development’. The term development sets out different agendas for CSR in different countries. The level of accomplishments that a country has reached regarding these agendas is what defines the level of development that country has reached. The Human Development Index (HDI) classifies these indicators into monetary and non-monetary categories. These indicators have three main elements; life expectancy at birth; (2) a composite of school enrolment; and (3) adult literacy, GDP, health and education which determine a given countries development rate. ‘In such a broad understanding we include basic needs for development, such as water and the provision of food, housing and other forms of material welfare, health services and education, human rights and gender equality, democracy and freedom, a fair distribution of economic growth while considering the sustainable use of natural resources (Dobers & Halme, 2009, p.239).’ In many developed countries, all these indicators are easily available, on the other hand, these indicators are not easily attainable in developing countries.

Case study, Haiti. According to the World Bank in its income classification, economies are divided according to the 2011 GNI per capita.^[6] Our observations mainly addressed the low income category as the country for which this paper is of concerned (Haiti) falls into it with a $725.00 of GNI per capita. In these so called categories, economies are fragmented with a prominent informal sector. In a report from the same World Bank (2012) it is stated that the informal sector is a strong magnet which is attracting the majority of Haiti’s 4 million-strong workforce. Thus, the application of CSR in developing countries such as Haiti context varies due to its rate of development.

What about smaller corporations in developing territories?

Idemudia, U 2011, 'Corporate social responsibility and developing countries', Progress In Development Studies, 11, 1, pp. 1-18, Business Source Complete, EBSCOhost, viewed 13 September 2013.

Having established that indeed there is a difference in the in the definition of CSR in developing nations it is important to examine the situations of corporations that operate in developing countries economies. Idemudia believes that ‘despite the importance of universal principles (that involve CSR) for both businesses and stakeholders, there is a recurring tension between universal expectations and local challenges and opportunities. (2011, p.1)’ he goes on to state that ‘This disjuncture between local priorities and global expectations is because the mainstream CSR agenda has largely been driven by Northern actors and therefore reflected the priorities and concerns of western societies without sufficient room for other concerns.(2011, p.2)’

In most developing nations, small and medium businesses face challenges that their counterparts in developed nations do not. Idemudia quotes that ‘mainstream CSR suffers from selective amnesia as issues such as tax avoidance, unsustainable investment and poverty reduction do not appear on the agenda; nor does it attempt to address the structural and policy determinants of underdevelopment.’ Despite the challenges faced by corporations in these developing countries, what can be seen is the willingness of corporations to participate in CSR. In most cases small and medium companies have been able to come up and individually or as a group sponsor activities aimed at giving back to the society.

Reasons for the participation of SMEs in community activities in developing countries

‘An SME is a formal enterprise with annual turnover, in U.S. dollar terms, of between 10 and 1000 times the mean per capita gross national income, at purchasing power parity, of the country in which it operates’.

This was a quote from a paper titled ‘Defining SMEs: A Less Imperfect Way of Defining Small and Medium Enterprises in Developing Countries’ and which was written by Tom Gibson and H. J. van der Vaartindeed. However, this definition may not be applicable to all SMEs across the globe.

According to the World Bank in its income classification, economies are divided according to the 2011 GNI per capita.^[7] Our observations mainly addressed the low income category as the country for which this paper is of concerned (Haiti) falls into it with a $725.00 of GNI per capita. In these so called categories, economies are fragmented with a prominent informal sector. In a report from the same World Bank (2012) it is stated that the informal sector is a strong magnet which is attracting the majority of Haiti’s 4 million-strong workforce. This sector, mostly made up of unregulated micro and small businesses pays low salaries and provides precarious working conditions, a reflection of low-productivity and lack of the economies of scales.

The attitude adopted by SMEs in developing countries also varies from those of the developed countries in the way they view CSR. In such countries, CSR is viewed by SMEs as a means towards gaining societal acceptance for the operations that these companies run. With such attitudes it’s a wonder that there is no clear distinction between CSR and corporate citizenship among this group of business owners in developing countries. It should also be considered that in such scenarios many informal SMEs are financially successful and with the lack of fiscal enforcement, feeling no fear of fulfilling their obligations. As is the case in Haiti, Delatour and Duggleby (1993, p.1) explain in their assessment about the Haitian informal sector that “[it] is a large, permanent, energetic and high-profile segment of the Haitian economy. Its heterogeneous nature renders descriptive generalities somewhat perilous and perhaps makes beneficiary project interventions difficult to define.” What is evident is the fact that SMEs play an important role in the economies of developing countries but it is hard to keep track of them. Khrystyna Kushnir (2008) in her paper “A Universal Definition of Small Enterprise: A Procrustean bed for SMEs?” explains “that it is extremely difficult to obtain data on the annual turnover by MSMEs in developing countries. Also, the informal MSMEs in some developing countries outnumber formal MSMEs by 8 [to 10] times.”[8]

Can they also have their participation in the planet-people-well-being?

As a citizen, every person is under obligation to comply with national laws, the legitimate decisions of the courts and the authorities, and to pay legally determined taxes and other public levies. This is equally applicable for any legal entity or person such as companies or corporations. On the other hand, as far as Corporate Social Responsibility is concerned, it is generally accepted that it begins where the law ends[9]. It has a voluntarism degree as part of it, a natural obligation of supporting the community in which corporation and its stakeholders are evolving, a sense of giving back… A corporate citizen could limit itself to the law whereas a good corporate citizen could extend itself to the level of social responsibility. Fine corporate social responsibility should be viewed as the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests, the interest of its stakeholders and the interests of wider society.

How can they be socially responsible and be at the same time financially sustainable with all the challenges they face?

There is no doubt that good business practice can have effects at several levels of a corporation performance regardless of the corporations’ size. If well applied, CSR can attract more customers and therefore boost market share and profits. It can also motivate more and more employees thus increase efficiency and reduce turnover costs. If well implemented, CSR can even attract investors bringing by the same token more and more fresh capital, keeping share prices at a decent level and therefore protecting the business from takeover[10]. One can go as far as concluding that the application of "best Practices" can have a snowball effect and carry these same practices in the home and the immediate environment of the different stakeholders therefore strengthening the role and purpose in search of social responsibilities in companies.

Good Business sustainability involves businesses being able to manage their financial, social and environment issues, tasks, risk and opportunities all at once. Firms are therefore required to comply with the principles of sustainable development as described by the World Council of Economic Development: to “meet the needs of the present without compromising the ability of future generations to meet their own needs.”

Unilever’s Chief Executive Officer Paul Polman noted that, “Those companies that wait to be forced into action, or who see [sustainability] solely in terms of reputation management or corporate social responsibility, will do too little too late and may not even survive.”(Collinson et.al, 2012, p.1)

From a business’ perspective, sustainability is “a company’s ability to achieve its business goals and increase long term shareholder value by integrating economic, environmental and social opportunities into its business strategy.”(Symposium on Sustainability, 2001, p.1) Taking this point into account, means that business stakeholders must be willing to be managed. Human Resources is a key element in today’s business. This is because it provides the ability to maintain competitive advantage. Because of that, Human resources play an important if not a critical role in any business seeking sustainability while being competitive. In these changing times, whether they are organization or cultural, HR can have a strong impact in several departments of the corporation facilitating and managing conflicts. According to a Deloitte survey conducted in 2011, 70% of young Millennials, those ages range between 18 and 26, say a company’s commitment to the community has an influence on their decision to work there.[11] Employees are one of the key stakeholders for any business and evidence is growing that highlights the importance employees attach to companies demonstrating their CSR record through progressive employment practice as well as through their behavior as good corporate citizens.

From a business’ perspective, sustainability is “a company’s ability to achieve its business goals and increase long term shareholder value by integrating economic, environmental and social opportunities into its business strategy.”(Symposium on Sustainability, 2001, p.1) Taking this point into account, means that business stakeholders must be willing to be managed. Human Resources is a key element in today’s business. This is because it provides the ability to maintain competitive advantage. Because of that, Human resources play an important if not a critical role in any business seeking sustainability while being competitive. In these changing times, whether they are organization or cultural, HR can have a strong impact in several departments of the corporation facilitating and managing conflicts. According to a Deloitte survey conducted in 2011, 70% of young Millennials, those ages range between 18 and 26, say a company’s commitment to the community has an influence on their decision to work there.[12] Employees are one of the key stakeholders for any business and evidence is growing that highlights the importance employees attach to companies demonstrating their CSR record through progressive employment practice as well as through their behavior as good corporate citizens.

On the flip side, business leaders have developed a good tendency of being better accompanied by making better direct assistants choices. Ancona, Malone, Orlikowski, and Senge (2007) believe that the myth of the complete leader (and the apparent fear of appearing incompetent) makes many executives try to do just that, exhausting themselves and ending up damaging their organizations in the process. They also view leadership as a set of four capabilities: “sense making” (understanding the context in which a company and its people operate), relating (building relationships within and across organizations), visioning (creating a compelling picture of the future), and inventing (developing new ways to achieve the vision). It is however very difficult to find someone excelling in all these four domains. With today’s challenges, there is a tendency for leaders to accept the need of being accompanied where they lack in competence. And for them to adequately put that in place they need to adopt different practices within their organizations. By choosing the ones “that do things right”, business leaders end up “doing the right thing”.

Jones and Olken (2005, p. 1) found “robust evidence that leaders matter for growth.” In this sense, a good business leader should be able to diagnose any situation, problems, issues and values while addressing them with effective solutions. According to the online research and business analysis journal of the Wharton School of the University of Pennsylvania in an article published in Times Magazine, “companies that don’t pay attention to their ethical responsibilities are more likely to stumble into legal troubles, such as mass corruption or accounting fraud scandals.”[13] And it takes a good leader to keep a business and it stakeholders sharing all ethical and moral values while ensuring financial growth. “There are large numbers of people in the world who have no jobs and who have no hope. They need jobs and more education, better healthcare and food. They need to be self-sufficient, not dependent because some do-gooder gave them a handout,” says Wharton’s MacMillan. “Companies need to start creating markets in these places.”[14] “If there is one thing that the financial crisis and stock market crash of 2008 should have taught us, it is that short-run share prices are an unreliable indicator of long-run business sustainability,” says Eric W.Orts, Wharton’s Professor of Legal Studies and Business Ethics and Management and Director, Initiative for Global Environmental Leadership. “What we need is re-conception of what the purpose of business is.”[15]

In other words, business sustainability requires the adoption of best practices that in turns require a transformational leadership in the sense of the vision and the transactional leadership in the sense of the application of this said vision.

References

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Bhide, A. and H. H. Stevenson: 1990, ‘Why Be Honest If Honesty Does Not Pay’, Harvard Business Review (September-October), 121–129.

Business for Social Responsibility: 2001, Introduction to Corporate Social Responsibility. [Online] available:http://www.bsr.org/bsrresources/WhitePapers_Issue-Area.cfm.

Business for Social Responsibility: 2001, Introduction to Corporate Social Responsibility. [Online] available:http://www.bsr.org/bsrresources/WhitePapers_Issue-Area.cfm.

Carroll, A. B.: 1979, ‘A Three-dimensional Conceptual Model of Corporate Social Performance’, Academy of Management Review 4, 496–503.

Collinson S, Berthon B, Lacy P. (2012). How Chief Strategy Officers advance Business Value through Sustainability. [ONLINE] Available at: http://www.accenture.com/us-en/outlook/Pages/outlook-online-2012-how-chief-strategy-officers-can-advance-business-value-through-sustainability.aspx. [Accessed 25 February 13].

Corporate Social Responsibility A Government update. The Government has an ambitious vision for Corporate Social Responsibility [ONLINE] available at:http://www.berr.gov.uk/files/file48771.pdf, [Accessed on May 13,13]

Delatour L, Duggleby T (1993) Strengthening the Informal Sector in Haiti: Constraints, Possible Interventions and Factors for Success, [ONLINE] Available at: http://pdf.usaid.gov/pdf_docs/PNABR351.pdf, [Accessed May 12 2013]

Delatour L, Duggleby T (1993) Strengthening the Informal Sector in Haiti: Constraints, Possible Interventions and Factors for Success, [ONLINE] Available at: http://pdf.usaid.gov/pdf_docs/PNABR351.pdf, [Accessed May 12 2013]

Dobers, P, & Halme, M 2009, 'Corporate social responsibility and developing countries', Corporate Social Responsibility & Environmental Management, 16, 5, pp. 237-249, Business Source Complete, EBSCOhost, viewed 13 September 2013.

Friedman, M.: 1970, ‘Social Responsibility of Business is to Increase Its Profit’, The New York

Gugler, P, & Shi, J 2009, 'Corporate Social Responsibility for Developing Country Multinational Corporations: Lost War in Pertaining Global Competitiveness?', Journal Of Business Ethics, 87, pp. 3-24, Business Source Complete, EBSCOhost, viewed 13 September 2013.

Haas, P. F.: 1979, ‘The Conflict Between Private and Social Responsibility’, Akron Business Economy Review 10, 33–36.

Hiremath, S, & M., S 2012, 'MNCs and Community Relations: The Challenge of CSR in Developing Countries', Indian Streams Research Journal, 2, 2, pp. 1-4, Academic Search Complete, EBSCOhost, viewed 13 September 2013.

Idemudia, U 2011, 'Corporate social responsibility and developing countries', Progress In Development Studies, 11, 1, pp. 1-18, Business Source Complete, EBSCOhost, viewed 13 September 2013.

International Corporate Social Responsibility (CSR). 2008. The University of London, International Corporate Social Responsibility course outline. [ONLINE] Available at: http://www.londoninternational.ac.uk/sites/default/files/corporate-social-responsibility-sample-study-guide.pdf. [Accessed 11 March 13].

Jamali, D., & Mirshak, R. (2007). Corporate social responsibility (CSR): theory and practice in a developing country context. Journal of Business Ethics, 72(3), 243-262

Kay E, Lewenstein W (2013), The Problem with “Poverty Premium”, Harvard Business Review, April 2013 p21

Kay E, Lewenstein W (2013), The Problem with “Poverty Premium”, Harvard Business Review, April 2013 p21

Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/. [Accessed 03 March 13].

Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/. [Accessed 03 March 13].

Kushnir K (2010), A Universal Definition of Small Enterprise: A Procrustean bed for SMEs?, [ONLINE] Available at: http://blogs.worldbank.org/psd/a-universal-definition-of-small-enterprise-a-procrustean-bed-for-smes, [Accessed on May 13, 2013].

of-ethics-in-business.html#axzz2NHKCy7L9. [Accessed 11 March 13].

Quazi, A. M. and D. O’Brien: 1996, ‘An Empirical Test of a Two-Dimensional Model of Managerial Perception of Corporate Social Responsibility in Diverse Cultures’, paper presented at the ANZAM Conference, held at the University of Wollongong, December 4–7, 1996.

Schreck P, (2009). The Business Case for Corporate Social Responsibility: Understanding and Measuring Economic Impact of Corporate Social Performance. [ONLINE] Available at: http://books.google.com/books? [Accessed 25 February 13].

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[1]World Bank, 2012.Haiti tackles business reforms to boost recovery, job creation. [ONLINE] available at: http://www.worldbank.org/en/news/feature/2012/11/05/business-haiti-recovery-jobs, [Accessed 11 May 2013]

World Bank, 2012.Haiti tackles business reforms to boost recovery, job creation. [ONLINE] available at: http://www.worldbank.org/en/news/feature/2012/11/05/business-haiti-recovery-jobs, [Accessed 11 May 2013]

 

CHAPTER 3

METHODOLOGY

Given the context of Corporate Social Responsibility, described by specialists as inescapable for business leaders in the Western World, we have framed this study to consider the pyramid of Social Responsibility. This would include the economic, legal, ethical and philanthropic responsibilities as presented by Greenberg (2010, ). We then applied the criteria to the Developing World, making the smaller corporations in Haiti the core of our study. The research methodology adopted sought viable answers to the question: What type of strategies will render developing countries’ participation sustainable when smaller corporations in the non-Western World adopt the triple P “profit-people-planet” approach practices?

Specifically, how can smaller corporations in the Developing World be socially responsible and financially sustainable while facing the challenges that come with operating businesses in such territories such as lower levels of education of the general population, pervasive corruption, and cultural suspicions and expectations based on common NGO practices, just to mention a few?

Due to the historic view of CSR as a developed country phenomenon, a large body of literature on social performance of firms has emerged in the developed nation’s context. On the flip side, literature on the theory and practice on CSR in the Developing World remains scant (Belal, 2000, p. 275). For the purposes of this research, an extensive literature review was undertaken to provide clues regarding the key CSR issues affecting developing countries. In this case priority was given to work central to the issues being examined rather than the collection data not closely related to the conditions and environment representative of the non-Western World.

In a general sense, I concluded that the literature review gathered data on Low Income Economy, Social Responsibility, Business Practice and Sustainability. The academic and professional literature on leadership and CSR was covered, as well as a keyword searches on Social Responsibility such as Sustainability, Corporate Social Performance, Business Ethics, Corporate Citizenship, Corporate Governance and Best Business Practices. This research took into consideration definitions and perceptions prior to the year 2000, but focused mainly on the period from 2000 to present.

The adopted methodology involved the identification and articulation of the relationships between the literature and the fundamental question of sustainable CSR practices in the developing countries. Primary sources and secondary sources were consulted in both printed and electronic format. The primary sources helped determine the central definitions, main descriptions, quotations, key points, arguments and assertions. On the other hand, secondary material was relied upon for lesser definitions, factual information, and illustrative examples and to back up supporting points. The Sources used were selected according to author expertise, credibility and relevance of the evidence.

The review of literature focused on how the four core principles that define the essence of how corporate citizenship can and should be applied to critical issues concerning human development as well as the environmental sustainability in developing countries. These core principles have been defined by the Boston College Carroll School of Management Center for Corporate Citizenship for every company as having minimizing harm, maximizing benefit, being accountable and responsive to stakeholders, and supporting strong financial results. Most importantly, the review of literature went beyond the traditional CSR concept in order to identify responses to the core question: Can a business strategy based out of Corporate Social Responsibility (CSR) as a differentiator ensure sustainable growth in an underdeveloped country?

The second research tool utilized for the purpose of this study was a survey. The term ‘survey’ is commonly applied to a research methodology designed to collect data from a specific population, or a sample from that population, and typically utilizes a questionnaire or an interview as the survey instrument (Robson, 1993, p.211). These Surveys are used to obtain data from individuals about themselves, their households, or about larger social institutions. Sample surveys are an important tool for the collection and analyzing of information from selected individuals. They are widely accepted as a key tool for conducting and applying basic social science research methodology (Rossi, Wright, and Anderson, 1983, p.755).

The United Nations Industrial Development Organization (UNIDO) developed the questionnaire used for the purpose of this study. In cooperation with local partner institutions, UNIDO carried out a survey amongst SMEs in Central, South and Eastern Europe to get a better insight into their understanding of Corporate Social Responsibility (CSR) in their particular respective regions. The results of the original survey in its context can be found in the appendices.

“The main objective of the Regional CSR Network for Small Business is to assist SMEs in South, Central and Eastern Europe to conduct business in a socially and environmentally responsible and responsive manner, and to thereby promote their competitiveness and a better alignment with emerging consumer concerns. The Regional CSR SME Network provides assistance to various kinds of business support and advisory institutions, such as business associations, chambers of commerce, business development service (BDS) providers, vocational institutions, universities or NGOs in building CSR expertise.”

In our case, the survey questions were contextualized to the Haiti situation through a process involving review committees. Reliability and validity are important aspects of questionnaire design. According to Suskie (1996), a perfectly reliable questionnaire elicits consistent responses. Thus, for the Haitian context, the review committee adapted Leary’s (1995) seven guidelines for designing a useful questionnaire:

1. Use precise terminology in phrasing the questions.
2. Write the questions as simply as possible, avoiding difficult words, unnecessary jargon, and cumbersome phrases.
3. Avoid making unwarranted assumptions about the respondents.
4. Conditional information should precede the key idea of the question.
5. Do not use double-barreled questions. (questions that ask more than one question but provide the respondent with the opportunity for only one response)
6. Choose an appropriate response format.
7. Pretest the questionnaire.

The Likert scale questions part of the UNIDO survey were also included to strengthen the validity of the survey. A Likert item is simply a statement which the respondent is asked to evaluate according to any kind of subjective or objective criteria. Generally the level of agreement or disagreement is measured. It is considered symmetric or "balanced" because there are equal amounts of positive and negative positions. Thus one can say that the Likert scaling is a bipolar scaling method measuring either positive or negative response to a statement. The format of a typical five-level Likert item, for example, could be:

• Strongly disagree
• Disagree
• Neither agree nor disagree
• Agree
• Strongly agree

Robson (1993, p.68) indicates that a high reliability of response is obtainable by providing all respondents with the exact same set of questions. Validity is inherently more difficult to establish within a single statistical measure. If a questionnaire is perfectly valid, it must measure in such a way that inferences drawn from the questionnaire are entirely accurate. Pilot testing of instruments is a procedure to enable the researcher to make modifications to an instrument based on results.

Putting this fact into consideration, the committee proceeded to make the questionnaire valid with internal validity by using a pilot test that assured them that the instrument was clear and unambiguous. The external validity of any study or research is the extent to which the results of the study can reflect similar outcomes elsewhere, and can be generalized to other populations or situations.

Our specific context being Haiti, we designed the method by which we selected the sample of 10 to 15 prominent multi-national corporations and well established locally-based firms operating in Haiti that would participate in our survey. Information on these firms was obtained from a review of annual reports, mainstream media and company websites. These 10 to 15 companies were identified following a web search of companies using such keywords such as corporate social responsibility, corporate social accountability, philanthropy, corporate giving and charity in the Haitian context. The websites were also scanned for programs or events connected to the above set of words.

Data Collection

Questionnaires were mailed on 28 May 2013 via internet and were to be returned on paper.

Data Analysis

Data analysis consisted of examining the surveys for correctness. Subsequently, Leech and Onwuegbuzie (in press) described several qualitative data analysis techniques, including the following: method of constant comparison, keywords-in-context, word count, classical content analysis, domain analysis, taxonomic analysis, and componential analysis. In addition to these qualitative data analyses there is a class of data analytical tools known as cross-case analyses (cf. Miles &Huberman, 1994, p 103). A cross-case analysis involves analyzing data across the cases (Schwandt, 2001).

Our team decided to use the Inferential Data Analysis method to be able to fully analyze the results from the questioners we had previously sent to the organizations that would be included in our survey. We only used surveys from the organizations that had sent back the questioners on paper. We settled on the inferential analysis method because while descriptive data analysis can present a picture of the results, to really be useful, the results of our research had to allow us the researcher to accomplish other goals such as:

• Using information obtained from a small group (i.e., sample of customers) to make judgments about a larger group (i.e., all customers)
• Comparing groups to see if there is a difference in how they respond to an issue
• Forecasting what may happen based on collected information

To move beyond simply describing results requires the use of inferential data analysis where advanced statistical techniques are used to make judgments (i.e., inferences) about some issue (e.g., is one type of customer different from another type of customer). Using inferential data analysis requires a well-structured research plan that follows the scientific method. We also put into consideration the fact that, most (but not all) inferential data analysis techniques require the use of quantitative data collection.

Onwuegbuzie and Teddlie (2003, p.372) conceptualized that when analyzing quantitative and qualitative data within a mixed methods framework, researchers undergo at least some of the following seven stages: (a) data reduction, (b) data display, (c) data transformation, (d) data correlation, (e) data consolidation, (f) data comparison, and (g) data integration. Only after completing these stages is the study able to experience completeness for the final coding and keying of the data into a database in Number Cruncher Statistic. (491 The Qualitative Report September 2006)

References

MARSDEN, P. V., & WRIGHT, J. D. (2010). Handbook of survey research. Bingley, UK, Emerald.

MILES, M. B., & HUBERMAN, A. M. (1994). Qualitative data analysis: An expanded sourcebook (2nd ed.). Thousand Oaks, CA: Sage.

ONWUEGBUZIE, A. J., & TEDDLIE, C. (2003). A framework for analyzing data in mixed methods research. In A. Tashakkori & C. Teddlie (Eds.), Handbook of mixed methods in social and behavioral research (pp. 351-383). Thousand Oaks, CA: Sage.

ROBSON, C. (2002). Real world research: a resource for social scientists and practitioner-researchers. 2^nd Ed. Oxford [u.a.], Blackwell

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER 4

FINDINGS

Data analysis

The questioners that were sent to the different organizations and we managed to receive feedback from were able to highlight some very interesting facts regarding the position of CSR in the Haiti corporate society. Using the method we had chosen to evaluate our survey (combined quadrant (Quazi mixed with Porter)), we established that all the companies surveyed showed some degree of interest in CSR. What was interesting was that out of this complete number, women who were in the management position of the companies were likely to consider participating in CSR. The percentage we established was 57%, this is 7% more that their male counterparts.

While carrying out our survey, we sought to examine the reasons as to why the Haiti corporate community would consider adopting CSR. When asked whether they believed that that CSR has to do with fulfilling fiscal and other social obligations, 50% believed that it did while the other percentage believed that it had nothing to do with obligations. Fifty seven percent believed that CSR had to do with sustainability, while another 57% believed that it had something to do with the work environment. What was interesting was the fact that a whopping 60% believed that the incorporation of CSR into the company was due to socio-economic factors. Based on these facts we sought to find out the exact perception of the companies regarding their definition of CSR. From the feedback we received from this question, we established that 50% of our responders believed in the classic definition of the term corporate social responsibility. The other 42% defined it through a socio-economic aspect while the final 8% believed that the true definition of CSR came through a philanthropic and sustainability angle.

Having established that at least all a large percentage of our surveyed participants had an inkling as to what CSR was in Haiti, we sort to know where the companies that participated in or would have liked to participate in CSR would concentrate on. The fields varied from education to equality. What seems to catch our attention was the fact that all the companies hinted at working with social problems that mainly faced the nation. Thus, our survey yielded the following result.

What is evident is the fact that a large number of corporate would willingly work with education when it comes to implementing CSR. Our survey pointed out the fact that most of these corporate are aware of the social challenges that Haiti as a developing country faces on a daily basis and the possible solutions of these problems.

However, our survey also noted possible barriers to the successful spread of CSR in the Haiti corporate society. When asked to provide the most effective hindrances to CSR in Haiti, three main problems stood out. The most common answer to barriers that likely affected CSR was employee motivation. This translates to the fact that employees were not motivated enough to participate in CSR let alone implement it. These employees viewed CSR as a duty and not a chance to give back to the society. The second hindrance comes in form of knowledge or lack of in this case. While CSR is a trend and norm known by all, in most developing countries, Haiti included, have limited information on what the CSR concept is and to what extend it would stand to benefit not only the society but also the companies involved. Finally, the third most common hindrance to CSR is the availability of funds to drive the projects. In Haiti, business is driven for the main purpose of gaining profit. At the end of the day, funds slotted for social activities such as CSR are either little of not allocated at all.

Despite the challenges likely to be faced in the implementation of CSR, the feedback we got concerning whether corporations would create free time for the implementation of CSR was positive. In fact, all corporations that responded to our questionnaire agreed that they would do so.

Finally, we sought to know the reaction that the corporations thought that CSR would have on their businesses. We achieved this by asking whether CSR had any effect on purchasing decisions made by their respective clients. Sixty percent of those surveyed agreed that indeed CSR played a role in influencing their purchasing decisions. The 28% refuted this fact and 12% did not answer our question.

A combination of a “Triple Bottom Line” with the answers we received from our survey led us to a number of conclusions. The first was that the Haiti corporate society is not totally ignorant to the existence of CSR. The second was that there was a willingness to participate in this idea regardless of the barriers existent in this particular environment. We finally concluded that the reasons as to why corporate companies would go for CSR in the Haiti business environment would be as follows.

    

Corporate Social Responsibility in Haiti

Corporate Social Responsibility is increasingly becoming a big part of business in developed countries. Every day, the relationship between companies and civil society organizations keeps on shifting from paternalistic philanthropy to a re-examination of the roles, rights and responsibilities of a business in society. Corporate Social Responsibility (CSR), defined in terms of the responsiveness of businesses to stakeholders’ legal, ethical, social and environmental expectations. Being competitive while making a difference in their communities gives some enterprises an edge over others in most developing countries.

In Haiti, The informal sector for the most part is still functioning without a computer and the basic economic principles are still being internalized. On the other hand, and fortunately the enterprise part of the formal sector have already left the stone age and are making money, evolving with today’s technology but fighting their way for sustainability and that is the real challenge.

We established that Some of those companies evolving in this poorest country of the western hemisphere and that are witnessing how the lack of education, health management, services, infrastructures etc…, are affecting the country’s development get themselves involved in social activities. Unibank, the largest bank of Haiti is a good example with its ‘livre en folie’[16] or ‘musique en folie[17]’ to motivate and educate the youth or Valerio Canez S.A. (top 20) with its strong participation in both ‘Haiti Tec’ a centre for excellence in education and also through “Fondation Francoise Canez Auguste”[18] to educate young fellows through history and culture or even ‘FondationBarbancourt’ (top 50) which is covering several aspects such as Youth and Sport, Education, Arts and Culture and Health[19]; no wonder they celebrated this year their 150^th anniversary. Even though CSR is not a replacement for the rightful role of democratic governments to set regulatory frameworks for the benefit of society, it is more useful for enterprises to understand when and how different approaches can create business and societal benefits. And although it was not yet been officially described as CSR, there has been a clear understanding from these private companies to be more involved socially as the need for the community was beyond government and state capabilities. And by adopting such behaviour, those companies have quickly recognized the strategic value of being more responsible thus began to align products and business relationships accordingly.

Haiti has been for the longest time without big foreign investment. In 1993 we witnessed some local investments in the banking sector with Unibank followed by SocaBank entering the market. Unfortunately, the following years the country witnessed political turmoil that pushed investments down the slop. With the presidency of Rene Preval (1996 -2001), the country has seen some stability for a decade or so. Since then, some good investments in the Telecommunication industry have happened with the cellular phone penetration. The first two cellular companies did not do much socially besides sponsoring some cultural activities like being present at Carnivals and helping a few music bands here and there. It is only in 2005 with the arrival of Digicel, a new giant in the Telecommunication and Information Technology sector, that the Haiti corporate world witnessed a different concept of CSR. The Reason for this bold step was simple: they had to make a difference to penetrate the already covered market. This company had a great recipe to understand when and how different approaches can create business and societal benefits. Their marketing campaigns, their undeniable support to the football national selection, their program to promote entrepreneurship and encourage young entrepreneurs are example of how an unknown company can conquer and control new territory through CSR. Haiti’s business community is now discovering the importance following this lead as well as the real meaning and impact of CSR on the society. With Digicel’s strategy, other companies started to understand where financial success can go hand in hand with social responsibility, improvements in quality as well as management and enhance reputation.

 

Other small and medium enterprises are now aligning the level of their technology, their management, and their marketing in parallel with social and environmental impacts. They understand that CSR needs to be integrated in their core business strategies in order to survive global recession or even political insecurities. CSR has gained prominence against a backdrop of relative economic stability and growth. Ultimately, their long-term success will be based on their ability to position CSR within the core of business strategy and development, thereby becoming part of ‘business as usual’

 

 

 

 

 

 

 

 

 

 

CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

Responsive CSR – The CompHaiti Case

CSR is characterized by the contribution of the company to different challenges of sustainable development. CompHaiti, despite its size, (as medium size in the Haitian scale and small business in the international scale of developed economies), joins to this type of responsibilities and is committed to give back to the community. This commitment is evident at both organizational and environmental levels.

The company, in order to link work to the management of organizational change used simple steps previously identified in which it is socially responsible while taking into account its organizational culture.

1. Spark employee interest

CompHaiti has demonstrated its ability to rise to the CSR occasion. The first step in our move towards successful CSR implementation was the training of our employees, by implementing various training programs. These programs include 1.- Awareness level of energy where all employees were trained on the importance of turning off their workstation before leaving; and 2.- Awareness level impressions where all employees use more alternative methods of communication and avoid unnecessary printing. Multiple channels of communication have been established such as e-mails, Phones extension available in all workstations and 3. - created Awareness at the workplace environment by inviting all employees to keep a proper and efficient working environment, by using the relevant devices for the recycling of paper, cans and plastic.

2. Establish a comprehensive and forward-looking vision

CompHaiti was able to develop a practice-oriented vision through the creation of the "Club CompHaiti" inviting all levels of the company to participate in activities organized by the company. Club CompHaiti is an internal movement geared towards a 3-fold vocation plan: leisure, continuous training and community with revenue generation to keep it sustainable over time. The following examples will illustrate:

• Draw Activities as an in-house lottery. Ours dabbed the "Half & Half" is whereby the winner of a purchased ticket is able to win half the pot and the other is put aside to self-finance various other activities.
• Implementation of a internal Football team, that has won the championship since its first intake was at "Boule en Folie" organized by private companies that share the same company vision as ours. This success was as value enhancing team spirit "When there is a will, there is a way”.
• Family activities including inviting family to free constructive activities, giving tickets to participate in the most successful theater, technology fairs and many others that helps motivate the employees and their families.
• We initiated the Launching of internal seminars in several areas such as personal finance lectured by the CFO, Better living and “etiquette” kind of seminars lectured by the CBDO’s wife, sales and diplomatic behavior lectured by the CEO’s wife and other areas such as entrepreneurship done by other stakeholders, like customers and or suppliers’ resources.

3. Institutionalize CSR within the company

CompHaiti ensured that these new practices become a responsibilities and routine established by new changes and new designs. For example, in the context of strengthening one of the pillars of the Haitian government regarding deforestation, all employees were made aware of the importance of planting fruit seedlings. Thus it has been made the responsibility of each employee to work in teams and bring seeds, black soil, and pots to start the tree planting process up to the seedlings germination stage. As soon as the seedlings reach a certain maturity, through activities supported by the "Club CompHaiti" and other NGOs, they are replanted in areas that are at the greatest risk of soil erosion.

The Management Team of CompHaiti plays a crucial role in facilitate the deployment of CSR in the company. Therefore, it is important to consider these Managers who are usually as involved as all other employees in the company, despite the various constraints at the operational level and Human Resources. For motivation, the Management Team and the “Club CompHaiti” put in place participatory projects for the management as well as the employees. This allows all participants who in this case are not only the management but also the employees to make suggestions concerning their work place environment and how to improve them. This project also operates by involving all employees in different rigid work place environment thereby relaxing their minds and bodies while giving them a sense of giving back to the society. Thus, these projects helps the employees relax knowing that the work environment that they function in is less rigid.

Philanthropic CSR – the CompHaiti Case

Since its inception, CompHaiti has prioritized social activities that mostly involve education. Active participation in annually organized technology fairs with young people across the country is an example of such undertakings. To celebrate its fifteenth year anniversary, CompHaiti sought to accomplish an ambitious project setting up 15 fully equipped computer labs in 15 schools in the year proceeding September 15, 2012. The management of these laboratories would be entrusted to one of our company’s foundation, the CompHaiti Foundation.

The creation of CompHaiti Foundation marked the willingness of the company to be more formally involved in its community and at a larger scale.

In order to fund the 15 lab project, CompHaiti Foundation appealed to investors and suppliers to help drive the project. At the beginning of the project, CompHaiti’s general management went to the head office of its suppliers to explain the well-founded project and motivated them into being involved as stakeholders. This they gladly agreed to get involved by providing some necessary equipment. CompHaiti also involved the public and its customers in this major project by organizing a raffle with the grand prize being a car. This not only brought out the spirit of competition but also channelled the philanthropic side of the Haitian people. Finally we invited Companies in the private sector, who shared the same vision of education available to all, to participate in our project by providing raffle prizes.

The inauguration of the first laboratories helped the project gain momentum drawing the nation’s attention to the CompHaiti Foundation. However, one fundamental element was missing and presented a major obstacle to success; electricity. Whether available from the grid or backed up by generators, stable current is a challenge in a school in Haiti today, especially in the rural areas. Therefore, there was the need to involve companies that would provide solar power generation to these schools. Haiti, being a developing nation does not have the resources to channel electricity to the rural areas. The provision of solar electricity by our company would therefore play two very important roles in the respective schools and the community at large. Not only would the solar electricity be used to power up the computers that our projects would provide for these schools but it would also provide reading light for the students in the schools. At a global level, solar energy is a green thumb to the environment for it utilizes the sun and is less harmful to the environment. At the end of the day, our provision of the solar electricity not only powered our project but ended up being useful to the students who would now have electricity to use as they study more so at night.

Strategic partnerships were needed to help complete parts of the CSR puzzle. CompHaiti Foundation was not able to provide all the necessities on its own. NumaDrouin in Jérémie, Femmes en Démocratie in La Vallée de Jacmel, FESH in Croix des Bouquets and a well-known association involved in educational and technology projects in Haiti and established both in Europe and the USA, Haiti-Futur played an important role in assisting us steer our project.

Studies have indicated that the key to technology in education is efficient and quality teacher training. CompHaiti Foundation was fortunate to receive the donation of electronic equipment from Haiti-Futur. Fifteen interactive smart boards were received to equip the computer labs. The smart-boards would address two major difficulties encountered in implementation by reducing Electricity consumption to a minimum while the board would provide a learning area for a wide group. The electronic smart boards would also allow an introductory training experience for teachers with educational technology in a familiar format of a writing board. This entry point is a minor step into virtual worlds while essential concepts such as using preloaded applications, handling clickers, utilizing electronic resources and including the internet are introduced and mastered.

This first phase prepared CompHaiti Foundation to play a more important role in Haiti-Futur’s second nationwide program phase. After the 180 smart board distribution, which enabled us to receive 15 complete sets of equipment (projectors and laptops); CompHaiti Foundation will now be one of this projects managers during the next phase. 500 smart boards donated by France will be deployed and implemented in public schools and EcoleFondamentaleAppliquée Centre d’AppuiPédagogique (EFACAPs) through a governmental national program using a public-associative-private model of management.

The CompHaiti Foundation - Futur-Haiti consortium, involves teacher-training, the development of educational material, follow up and evaluation of the digital interactive whiteboards implementation, and will comprise the CompHaiti Foundation lab network and the national network.

Strategic CSR – The CompHaiti Case

As I was writing this paper, CompHaiti was concluding a long discussion with the “Office National d’AssuranceVieillesse” (ONA) which would allow its members to get access to consumer loans for environmental friendly products such as solar energy appliances like refrigerators and freezers and in another lower scale, LPG ovens. The latter one would be a transitional step towards the great project that will help diminish deforestation. This will allow the government to adopt a law prohibiting cutting trees thus eliminating the use of wood as their primary source of energy for open-fire cooking without hurting the livelihood of its citizens.

The Office National d’AssuranceVieillesse (National Old Age Insurance Office - ONA) was created by organic law dated 28 August 1967 to protect private sector employees against the risk of poverty in old age through pension insurance. Employees and employers contribute equally at the rate of 6% each.The Organic Act allows 90% of funds to be allocated to "profitable investment / placements" in Haiti.ONA has been allowing loans up to 50% of employees quote-part for constructions and other specific projects.

Microcredit loans from commercial banks use a prohibited rate of around 40% to 70%. In a French journal, « Le Monde » article ‘Microcrédit, miracle oudésastre?’, by EstherDuflo (2011), it is revealed that in a study conducted in India and in Philippines, the results are consistent. In both countries, [microcredit] borrowers acquired more durable goods (TV, refrigerator, etc…) for their homes and those who have a small business invest in it: they acquire productive assets (bicycle, sewing machine) or increase their stocks. In India, one out of eight loans led to the creation of a new independent business and in the Philippines, 100% of all borrowers already had a company. This confirmed our thoughts that there could be an opportunity with the commercialization of solar powered equipment and appliances.

Even though the use of the gas oven is not entirely pro-environment, it is considered a preliminary important step towards considerably reducing deforestation in a country that today has less than 2% of vegetation cover. Strategy is to start with LPG appliances thus offering low income families access to these kind of goods and in a second phase offering additional solar powered equipment for businesses. This is due to the fact that such appliances are still more expensive to be afforded by a population where 55.5% lives under the $2-a-day-revenue poverty line[20][21]. A 12% interest rate was negotiated over a 12 month loan period making a monthly payment averaging less than $10. As paradoxically it appears, in Haiti microcredit institutions have registered a very high loan repayment rate (as high as 100% in many cases). Promotion and risk will be equally supported by both entities ONA and CompHaiti. With that strategic approach, and according to ONA experts, CompHaiti expects to gain faster strides and in the next 9 to 12 months, 30% of the increasing 300,000 subscribers, improving therefore the live of some 100,000 families while increasing sales volume by an average of $7.5 million[22].

 

 

[1] An article titled ‘Social Responsibility Builds Long-Term Success: Opinion’ written by Michael Crooke, quoted “Until now, legal requirements for corporations focused on one goal: profits. Today, benefit corporations add the legal duty of companies to achieve profits while also focusing on socially responsible activities — also known as Corporate Social Responsibility (CSR). Start-up businesses and existing small businesses would be well-served to adopt a benefit corporation structure. Companies that seek to establish sustainable principles as part of their business and marketing strategy and, more importantly, their corporate DNA, are positioned for long-term success.” Accessed at http://www.cnbc.com/id/47599530 on August 30, 2013

 

[2] ParagKhanna on 'How to Run the World' accessed at http://knowledge.wharton.upenn.edu/article.cfm?articleid=2811 on 26 March 13

[3] ‘The millennium development goals report 2006’ accessed at http://mdgs.un.org/unsd/mdg/Resources/Static/Products/Progress2006/MDGReport2006.pdf on August 30, 2013

[4] [4]Kowledge@Wharton (2012), Why Companies Can No Longer Afford to Ignore Their Social Responsibilities accessed at http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/#ixzz2UXyGDe2r on May 27 2013

[5] Accessed at http://www.bcccc.net/index.cfm?fuseaction=Page.viewPage&pageId=596&parentID=477 on August 30, 2013

[6] According to the World Bank in its income classification, economies are divided according to 2011 GNI per capita, calculated using the World Bank Atlas method. The groups are: low income, $1,025 or less; lower middle income, $1,026 - $4,035; upper middle income, $4,036 - $12,475; and high income, $12,476 or more.

[7] According to the World Bank in its income classification, economies are divided according to 2011 GNI per capita, calculated using the World Bank Atlas method. The groups are: low income, $1,025 or less; lower middle income, $1,026 - $4,035; upper middle income, $4,036 - $12,475; and high income, $12,476 or more.

[8] Kushnir K (2010), A Universal Definition of Small Enterprise: A Procrustean bed for SMEs?, [ONLINE] Available at: http://blogs.worldbank.org/psd/a-universal-definition-of-small-enterprise-a-procrustean-bed-for-smes.

[9] International Corporate Social Responsibility (CSR). 2008. The University of London, International Corporate Social Responsibility course outline. [ONLINE] Available at: http://www.londoninternational.ac.uk/sites/default/files/corporate-social-responsibility-sample-study-guide.pdf. [Accessed 11 March 13].

 

[10] The Time 100 Business Case Study. 2002. The importance of ethics in business, Cadbury Schweppes Corporate and Social Responsibility Report 2002. [ONLINE] Available at: http://businesscasestudies.co.uk/cadbury-schweppes/ethical-business-practices/the-importance-of-ethics-in-business.html#axzz2NHKCy7L9

[11] Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/.

[12] Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/.

[13] Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/.

[14] Supra note 14 above

[15] Supra note 14 above

[16]See: http://unibankhaiti.com/lef/index13.htm

[17]See: http://www.unibankhaiti.com/ub2/actualites.php?id_article=428

[18] See: http://www.haititec-edu.com/ and http://www.parchistorique.ht/

[19] See: http://www.barbancourt.net/fondation-barbancourt.php?langue=en

[20] Please see http://unibankhaiti.com/lef/index13.htm

[21]Please see http://www.microfinance.com/English/Papers/Scoring_Poverty_Haiti.pdf, P.3

[22]Computed based on an average of $75 retail price for a LPG oven.

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