As the theme for the 73rd annual meeting of the Academy of Management is capital in question, most discussions and debates are about the cause-effect and impacts of capitalism in the contemporary economy. Many aspects of these debates are directyly relevant to the practice of management and therefore to our scholarship. Indeed, if, as researchers and teachers in international business (or community development), we assume the inevitability of the prevailing modern economic system which we are a part of as well as emerging issues posed by capitalism.
The theme is obviously appropriate with my research project since Mining MNCs, the theme of these project, focuses on behaviour, actions and contributions by the local community. I attended a number of CSR presentations since I need to make sense of what has been done in international business and business ethics areas. In particular, when we look at CSR from companies locating in different countries. It strikes my thought that CSR in developing countries can be regarded as distinct from CSR in developed countries for a number of reasons.
First, developing countries represent growing economies and thus lucrative markets. At the conference, the power of emerging markets such as BRICS have been discussed widely and the practices and challenges of CSR were commonly discussed. Second, social and environmental crises are felt most strongly in the developing world. Third, developing countries are likely to experience the strongest environmental and social impacts. As a result, developing countries present companies with a unique set of CSR challenges that are different to those faced by MNCs in developed countries.
In the case of international mining industry, if we look at stakeholder theory (Freeman, 1984) that explains relationship among various institutions and suggests that the purpose of a business (in this case international mining) is to create as much value as possible for stakeholders. In order to succeed and be sustainable over time, executives must keep the interests of customers, suppliers, employees, communities and shareholders aligned and going in the same direction. We may argue that value-creation from mining to stakeholders can be different according to circumstances and needs or expectations from each stakeholder. Beside, I have made it clear in my paper that I presented at the academy that, in defining stakeholders, mining MNCs need to move beyond corporate-centric approach to community-centric system. If we take example of Lao PDR from this research, you will see the power of communitarian-base approach in doing corporate social activities.
I attended a few session by Professor R. Edward Freeman from the University of Virginia who argues that in the traditional view of the firm, the shareholder view, the shareholders or stockholders are the owners of the company, and the firm has a binding financial obligation to put their needs first, to increase value for them.
However, stakeholder theory argues that there are other parties involved, including governmental bodies, political groups, trade associations, trade unions, communities, financiers, suppliers, employees, and customers. Sometimes even competitors are counted as stakeholders—their status being derived from their capacity to affect the firm and its other stakeholders. I also argue that, perhaps, in the mining context, stakeholders can and should be a part of value-creation in their own community, not only as consumers, or recipients of the benefits of mining, but also the creators of value for themselves and the community.
References:
Freeman, R. Edward (1984). Strategic Management: A stakeholder approach. Boston: Pitman. ISBN 0-273-01913-9.
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