Social Responsibility Journal
Volume 3 Number 2 2007
Corporate Social Responsibility in Your Own Backyard
Len Arthur, Molly Scott Cato, Tom Keenoy & Russell Smith
Purpose – To explore the link between enterprise scale, ownership and responsibility, speciﬁcally with regard to
environmental responsibility. The paper argues that more local ownership and the co-operative organisational form may
ensure a higher level of corporate responsibility
Design/methodology/approach – The paper is mainly discursive, although three case-studies of companies are used to
illustrate the argument: Shell, Vaux Brewery, and Tower Colliery.
Findings – The central ﬁndings are that the nature of ownership, the scale of an enterprise, and the governance form are
key considerations in terms of the corporate responsibility of ﬁrms.
Research limitations/implications – Further explorations of CSR in relation to the nature of governance and ownership of
ﬁrms, and the scale of their operations, would develop and explore this paper’s central argument further and thus provide
more valuable insights.
Practical implications – The paper suggests that the issue of scale and the role of co-operatives may be of more signiﬁcance
as corporate governance comes under greater scrutiny and sustainability plays a more central role in business practice.
Originality/value – This is the ﬁrst conceptual application of the concept of CSR to co-operative ownership and
Keywords Corporate social responsibility, Corporate ownership
Paper type Conceptual paper
Proponents of corporate social responsibility (CSR) as a means of improving the behaviour of the corporate sector often
assume that the corporations will improve their behaviour because of the damage to their brand image of actions considered
reprehensible by the majority of consumers (the example of Shell in Nigeria and during the crisis over Brent Spar is often
cited as an example). However, in the late phase of capitalism consolidation and frequent changes in the ownership of
brands mean that consumers can really have little idea about the nature of the company that manufactured any particular
good they purchase. Consumers have also grown cynical after years of “greenwash” and phoney claims to social values
from corporations (Rowell, 1996; Beder, 1997; Christian Aid, 2004).
We would argue that two factors that have a genuine impact on the standards of behaviour of corporations are scale
and distance. The greater the distance between producers and consumers the lower the level of commitment to social
responsibility. The environmental catastrophe at Bhopal or the poor terms and conditions and low rates of paper of Nike’s
Indonesian sweatshops are two of many examples that could be cited. Conditions which corporations would not consider
acceptable in their own countries are accepted when they are far enough away. The scale of vertically and horizontally
diversiﬁed corporations today means that there is little knowledge in one part of the business about what other parts of it
are doing, and this makes any genuine responsibility more difﬁcult to achieve. Globalisation and consolidation are
continually increases these problems of distance and scale while corporations pay lip-service to CSR.
We appear to have generated a dichotomy between economic efﬁciency and social capital. CSR has been a
superﬁcial response at the level of public relations. A real solution would require reinternalising the externalities of the
globalised capitalist marketplace. Our experience of working with the cooperative sector in Wales suggests that this is
much more likely to be achieved within an economy based on locally owned and administered business. Put simply,
people are less likely to pollute their own backyards and exploit themselves and their neighbours. The genuine social
responsibility of Tower Colliery’s sponsorship of the Mountain Ash Rugby Team provides a contrast to the indirect
commitment of the Tesco schools-for-computers campaign.
Globalisation and the Social and Environmental Performance of Corporations
The history of globalisation, the state of continual change that typiﬁes the late form of capitalism, has been traced back
to the post-war settlement:
The origins of globalisation in the twenty-ﬁrst century lie in the institutional arrangement of Bretton Woods, set
up in 1944, as a means of managing the post WW2 international political economy of the developed countries. In essence,
the arrangements were an attempt to impose a reciprocal conditioning between an industrial free-market systems and a
nation state system. . . This resulted in nation states’ domestic economies becoming increasingly subordinated to the
needs of a globalising world economic system (Arthur et al., 2001).
Other commentators have identiﬁed the central feature of globalisation as a change in the balance of power
between increasingly internationalised ﬁrms and national governments:
[Globalisation’s] common feature is to convert the state into an agency for adjusting national economic practices
and policies to the perceived exigencies of the global economy. The state becomes a transmission belt from the global to
Paper prepared for the conference: Corporate Social Responsibility: Thought and Practice, University of Glamorgan Business School,
23-24 September 2004