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CCCD
Centrum für Corporate Citizenship Deutschland




Corporate Citizenship in Germany
and a Transatlantic Comparison with the USA

Results of a CCCD Survey




     ata
2




    CCCD – the Center for Corporate Citizenship Ger many is a non-profit
    organisation at the inter face between business, academia, and politics. In
    cooperation with leading companies, both domestic and foreign, acade-
    mic institutions and civil society organisations, CCCD acts as a think tank
    and competence centre, providing a platform for dialogue; acting as cata-
    lyst and host.
    In this capacity, the CCCD arranges forums for exchange between corpo-
    rate citizens, business, academia, politics and civil society, supplies and
    carries out applied research, facilitates learning processes through deba-
    te and skilling opportunities, and supports cooperation between businesses
    and partners from civil society, academia, and/or politics.
    Using workshops, publications and public events, CCCD also acts as a dri-
    ving force for the corporate citizenship debate in Germany and for the
    practical efforts by businesses taking an active role in society.
    CCCD is the German partner of the Center for Corporate Citizenship at
    Boston College, USA, as well as a partner of Business in the Community, UK.
    www.cccdeutschland.org
3


Inhalt
I.     Preliminar y remarks                                                5

II.    Key Findings                                                        7

III.   Introduction                                                        9

       • Key issues and objective of the sur vey

IV.    Methodology approach, specifics of random sampling, execution of
       the sur vey                                                         11

V.     Empirical findings from the German sur vey and transatlantic
       comparison of selected issues                                       14

       • An unequivocal “ Yes” to corporate citizenship                    14
       • Types of corporate citizenship                                    15
       • Deploying companies’ material and human resources for corporate
         volunteering                                                      16
       • Preferred areas for corporate citizenship                         17
       • Involving partners in corporate citizenship                       18
       • Corporate Citizenship with a clear local emphasis                 20
       • Investment in corporate citizenship                               21
       • Corporate and community objectives at the focus of commitment     22
       • Happening by chance or strategic business planning of corporate
         citizenship measures                                              25
          Corporate culture as a guideline
          Responsibility for corporate citizenship in the company
          Corporate Citizenship no PR-tool
       • Socio-political attitudes of companies with regard to corporate
         citizenship                                                       28
          Positive reinforcement factors for corporate citizenship
          Factors with a limiting effect on corporate citizenship
       • Issues and areas for corporate citizenship                        34
       • Investing in the future of corporate citizenship                  36

VI.    Summar y of results                                                 37
4


 Views and Comments:
“This is exactly what we were hoping for when we talked about the idea of doing a sur vey
on corporate citizenship on an international level: interesting comparative findings on the
differences and similarities. Both understanding and practice var y considerably in different
national settings. Therefore the global idea of corporate citizenship needs differentiated,
culture sensitive grounding. We hope CCCD’s survey on corporate citizenship in Germany to
be the first one of a whole series, to be conducted in different parts of the world which will
enable us to develop a truly global understanding of the why and the how of corporate citi-
zenship.”
(Prof. Bradley K. Googins, Executive Director, The Center for Corporate Citizenship at Boston
College)


“Responsible activities by businesses need to be geared towards meeting both the society ’s
needs and shareholder interests, which implies following the business strategy. This makes
the key question for issues and projects: what benefits the business? What benefits society?
Changing over from philanthropic individual measures to a strategic overall concept for
corporate citizenship is a learning cur ve we have gone through as well. On the basis of our
corporate values and business strategy we have revised previous activities and put in place
new long-term projects, based on our core competences and the needs of society ”.
(Jürgen W. Cuno, Director, Government & External Affairs, Deutsche BP)


“ Whenever politics expects companies to show social involvement, there is a suspicion that
companies are supposed to act as stopgaps for a state retreating from welfare state respon-
sibilities. This is not the case. Corporate citizenship brings a specific value of its own to both
the community and the economy. In addition, it is a cornerstone for a new social compact
between citizens, the state and business, resting primarily on cooperation and increased
participation.
(Dr. Michael Bürsch, Member of the German Parliament)


“A global and committed company always encounters special circumstances in different
countries. To be successful, in business as in civic engagement, one has to forge links bet-
ween different corporate cultures as well as cultures of involvement. A US business active
in Germany will always build bridges between different economic and community commit-
ment approaches. A comparative study, revealing both the common ground and the diffe-
rences, is most helpful in this respect.”
(Hans-Peter Teufers, Director Public Affairs Central & Eastern Europe UPS)


“Corporate citizenship and corporate social responsibility have become important issues for
the future. But in Germany and elsewhere, an empirical analysis based on sound methodo-
logy is only just beginning. And yet, decision-makers in business, politics and society need
this knowledge… and the present study will provide a useful source of information to all of
the above – and will hopefully be followed by responsible action”.
(Prof. Manfred Güllner, Managing Director, forsa. Gesellschaft für Sozialforschung und sta-
tistische Analysen)
5


I. Preliminary Remarks
The study on hand “Corporate Citizenship in Ger-                              poll, which are relevant for the German con-
many and a Transatlantic Comparison with the                                  text, have been put into German and integra-
USA” surveys corporate citizenship involving com-                             ted into the German sur vey, paying particular
panies in Germany. For the first time, the data                               attention to the specifics of the German situa-
collected will be compared with similar findings                              tion. Taking into account the diverse political,
from the US. Accordingly, some of the points                                  economic, and cultural characteristics of com-
these two cultures of social involvement share                                p a n i e s i n b o t h c o u n t r i e s, t h e d a t a p e r m i t s
- and some of their differences - can be iden-                                instructive interpretation of selected dimensi-
tified and analysed, which gives German busi-                                 ons of corporate citizenship in Germany and
nesses an opportunity to place their own prac-                                the US.
tice of community commitment in an interna-
tional context and, if necessar y, readjust it.                               The Germany-related results of the final report
                                                                              as submitted are based in part on comments
The Study contains fundamental results from an                                on the report made by Professor Dr. Dr. Seba-
empirical sur vey on the issue of “ Corporate Citi-                           stian Braun and Mark Kukuk of the Paderborn
zenship in Germany ”, conducted between Sep-                                  University research centre on social involvement.
tember and November 2006. The poll formed                                     The sections focusing on the transatlantic com-
part of a research project involving several of                               parison are based in part on the results elabo-
the cooperation partners of CCCD, to whom we                                  rated by Dr. Karin Lenhart.
would like to express our thanks for their sup-
port and participation.                                                       Dr. Frank W. Heuberger
                                                                              CCCD
Deutsche BP AG acted as a generous principal
sponsor, and UPS supported the evaluation and
publication of the study results. The preparato-
r y work, including drawing up the German que-
stionnaire, was done by CCCD in cooperation
with the Paderborn University research centre
on social involvement. Forsa undertook nation-
wide and cross-sector polling of businesses,
u s i n g c o m p u t e r- a i d e d t e l e - i n t e r v i e w s ( C AT I
system).

For the first time, thanks to the partnership bet-
ween CCCD and the Center for Corporate Citi-
zenship at Boston College, USA, reference could
be made in individual subject areas, to the study                             1 The State of Corporate Citizenship in the U.S. Business Per-
“The State of Corporate Citizenship in the US ”,                              spectives in 2005. The Center for Corporate Citizenship at
conducted in 2005 by the Center and the US                                    Boston College. Boston. 2005. Note: The German text uses the
                                                                              gender-specific masculine pronoun. This is simply to facilitate
Chamber of Commerce, allowing a direct com-                                   legibility and reading comprehension; the content addresses
parison of results. Those item batteries of the                               both men and women equally.
6

Introductor y remarks for the English                   more attractive for the US-American reader to com-
                                                        pare individual results and interpretations from
edition
                                                        both countries and to contrast these with his or
The English-language edition of the sur vey on Cor-     her own experience in this area.
porate Citizenship in Germany and the USA is a
first attempt at a quantity-based identification and    Despite the many similarities in some areas of Cor-
analysis of central elements of the social commit-      porate Citizenship in Germany and the US, there
ment shown by companies which are either based          are also amazing differences in others. In part,
in Germany or which are transnational companies,        these are due to different entrepreneurial traditi-
either manufacturing or selling their goods or ser-     ons in the two countries, but primarily they reflect
vices in Germany.                                       a historical and cultural development which made
                                                        them set different priorities in fields such as health
The results of the sur vey afford the English-langua-   care, combating poverty, disaster relief, or exten-
ge reader unparalleled insight into the communi-        ding global trade. For both countries these data
ty commitment of businesses operating in the Ger-       will ask in the medium-term whether more inten-
man economic environment. The CCCD had the              sive Corporate Citizenship will mean that the rules
opportunity to refer to comparative material from       of business as a whole will be rewritten.
the 2005 study “ The State of Corporate Citizen-
ship” conducted by the Center for Corporate Citi-       Dr. Frank W. Heuberger
zenship at Boston College, which makes it even          CCCD
7


II. Key Findings
   Irrespective of their size, companies in            In Germany, only 40 per cent of businesses, irre-
Ger many profess their social responsibility.          spective of company size, expect their com-
Almost all the companies polled, 96 per cent           mitment to yield any positive economic result.
exhibit some kind of corporate citizenship.            In the US, 63 per cent of all enterprises and 84
                                                       per cent of large enterprises, are convinced
                                                       that their civic involvement will have an imme-
    In a regional context, gif ts of both money
                                                       diate and positive effect on their business acti-
and in kind are typical of the corporate citi-
                                                       vities
zenship displayed by Ger man companies.
There is also widespread support among the
staff for voluntar y activities and the provision of       Only 16 per cent of large-scale German
such ser vices typifies German corporate volun-        companies interlink corporate citizenship with
teering. The larger the company, and the more          marketing and sales activities.
internationally active it is, the broader the range    Instead, traditional PR tools such as press state-
of its commitment.                                     ments, homepages, or customer newsletters
                                                       are widely used to inform about the compa-
                                                       nies ’ role in public life.
    More than three businesses out of four
consider corporate citizenship par t of the
image they have of themselves, and par t of                In both Ger many and the US, enterprises
their corporate culture. Still, the majority of        are strongly opposed in equal measure to
Ger man businesses have not chosen to be               any regulator y inter ference in their enga-
corporate citizens on their own initiative.            gement.
Fewer than 40 per cent of the companies que-           Only 3 per cent of businesses regard legal pro-
stioned are actively searching for areas in which      visions in Germany as positive reinforcement,
to become active and engaged. Even fewer               whereas in the US 14 per cent see their com-
businesses set measurable targets.                     mitment influenced by such provisions.


    Most Ger man companies are still – unli-              Where the quality of corporate citizenship
ke those in the US – far removed from an inclu-        measures adopted is concerned, German
sive concept which would make corporate                companies are clearly more self-critical than
citizenship an integral par t of the corpora-          their American counterpar ts.
te strategy, integrated into the companies’            Two-thirds of respondents (66 per cent) in Ger-
core business and competencies.                        many state that corporate citizenship is con-
This is particularly true for small and medium-        sidered important in principle though it is not
sized enterprises.                                     actually implemented consistently, but only 47
                                                       per cent of American businesses share this view.

    Unlike US American companies, the majo-
rity of German businesses are not convin-                  More than one third (39 per cent) of com-
ced that corporate citizenship can make any            panies in Ger many assume their corporate
measurable contribution to their economic              citizenship has no relevance to customer satis-
success.                                               faction.
8

Among American companies, this figure is just          Surprisingly, exactly the opposite occurs when
11 per cent. Virtually half the German com-            company size is taken into account. The lar-
panies (48 per cent) consider that corporate           ger the company in Germany, the more fre-
citizenship is not a factor in attracting and retai-   quently lack of resources is cited, while in the
ning staff, while only 15 per cent of US com-          US it is the opposite case.
panies dispute this.

                                                           More than 41 per cent of Ger man com-
    According to the majority of businesses            panies do not work with a par tner in their cor-
on both sides of the Atlantic by far the most          porate citizenship.
serious obstacle to stronger civic involvement         That means they forgo the chance of benefi-
is a lack of resources (US: 54 per cent; Ger-          ting from experience made in other sectors of
many: 48 per cent).                                    society for their corporate citizenship measures.
9


III. Introduction
The debate on corporate citizenship is driven                                t i c a l o b j e c t i v e s. A g a i n s t t h i s b a c k d r o p, t h e
by a view of the company as a good corpora-                                  “altruistic motivation” of well-off individual entre-
te citizen, who is or should be, actively invol-                             p r e n e u r s d o e s n o t m a t t e r v e r y m u c h, u n l i ke
ved in resolving social issues.                                              achieving a win-win strategy. Expectations cen-
                                                                             tre on a congruence of social and entrepre-
This involves exclusively those corporate activi-                            neurial interests, requiring a readjustment in the
ties which might contribute to the common                                    relationship between business, the state, and
good, irrespective of any assessment of inter-                               civil society to provide the launch pad for a
nal company processes. These activities inclu-                               new social compact.
de all one-off or permanent volunteer ser vices
intended to benefit society at the local, regio-
nal, national, or global level, which are outsi-                             Key Issues and Objectives of the Sur vey
de the genuine business activities of the com-
pany. Basically, therefore, corporate citizenship                            The object of the sur vey is an empirical analy-
means company investment in the social or                                    sis of entrepreneurially and socially-oriented cor-
natural environment which exceeds its normal                                 porate citizenship in Germany. The main que-
business sphere.                                                             stion asked is: how and to what extent do Ger-
                                                                             man companies commit to public concerns,
Corporate community commitment is recogni-                                   going beyond their immediate business activi-
zed as benefiting the various ways in which                                  ties. Within a company ’s corporate citizenship
entrepreneurial resources can be employed.                                   measures, which objectives are business-rela-
But increasing attention is being paid to how a                              t e d a n d w h i c h a r e s o c i e t y- r e l a t e d ? To w h a t
business can profit from its corporate citizen-                              extent are corporate citizenship measures plan-
ship activities. The benefits accruing to com-                               ned and implemented as part of the business
panies from their engagement lie in creating                                 strategy? What are the socio-political attitudes
prerequisites for improving economic per for-                                which companies associate with the issue of
mance. Competitiveness and economic per-                                     corporate citizenship? Which are the social areas
formance, for instance, can be raised by tar-                                and issues of interest to companies? What is
geting improvements of the corporate image,                                  happening concerning investments in the futu-
infrastructure improvements on production sites,                             re of corporate citizenship?
a t t r a c t i n g n e w c u s t o m e r s, n e t w o r k i n g i n t h e
company ’s local and regional environment, or                                Researchers Maaß/Clemens (2002), Heuberger/
positive effects in the area of HR development                               O p p e n / Re i m e r ( 2 0 0 4 ) , H a b i s c h ( 2 0 0 3 ) , a n d
and external communication.                                                  Fabisch (2004) provided initial empirical studies
                                                                             on corporate citizenship activities undertaken
Linking civic involvement and corporate busi-                                by companies in Germany. The explorative study
ness objectives provides a new impetus in Ger-                               of Heuberger/ Oppen/Reimer focuses on selec-
many where so far the debate on community                                    ted corporate citizenship measures taken by
commitment has been ver y much dominated                                     individual companies, while the IfM Bonn study
by a socio-political focus addressing compa-                                 of Maaß/Clemens targets exclusively medium-
nies from, as it were, “outside”. This new direc-                            sized enterprises, on the basis of a quantitati-
tion ties in closely with the communication-poli-                            ve sur vey. Habisch (2003) presents “ best prac-
10

tice examples”, using the applications compa-                         Germany are volunteers in state and/or socie-
nies had submitted for the “ freedom and respon-                      ty. The current sur vey “ Corporate Citizenship -
sibility ” award. By contrast, the sur vey conduc-                    Unternehmerisches bürgerschaftliches Engage-
ted by Fabisch (2004) looks into the social invol-                    ment in Baden-Württemberg ” (entrepreneurial
vement of banks, concentrating its sophistica-                        community commitment in the state of Baden-
ted empirical and theoretical work on one spe-                        Württemberg), conducted by the centre for civil
cific industr y.                                                      society development (2007) is the most sophi-
But both the so far most influential of all these                     sticated attempt to date at analysing civic cor-
studies, by the Bertelsmann Foundation (2005)                         porate involvement at the regional level.
and the “Initiative Neue Marktwirtschaft ” (New
Social Market Initiative), adopted a ver y diffe-                     The sur vey described follows these other studies
rent approach. Both studies sur vey companies                         in certain respects, but it also diverges from them
active in Germany on a cross-sectoral basis.                          by having a different content-focus. This is shown
However, the Bertelsmann sur vey focus is on                          particularly clearly in the attempt to provide an
“Die gesellschaftliche Verantwortung von Unter-                       international comparison with the US and inve-
nehmen” (The Social Responsibility of Busines-                        stigate how corporate citizenship is anchored in
ses) and studies not only external public invol-                      corporate structures, and linked with flanking
vement, but also internal commitment (e.g. staff                      socio-political attitudes within. Any insight gai-
equal opportunities, staff social benefits), the                      ned can give indications to German companies
New Social Market Initiative pays special atten-                      concerning a strategic (re-) adjustment of their
tion to the extent to which company owners in                         own corporate citizenship commitment.



2 Maaß F., Clemens, R. (2002). Corporate Citizenship. Das Unternehmen als guter Bürger. Schriften zur Mittelstandsforschung Nr.
     94 NF. Wiesbaden: Deutscher Universitäts-Verlag. (Corporate Citizenship. Business as a good citizen. Essays on researching
     medium-sized enterprises. Pub. German University Press)

  Heuberger, F., Oppen, M., Reimer, S. (2004). Der deutsche Weg zum bürgerschaftlichen Engagement von Unternehmen. 10 The-
      sen zu quot;Corporate Citizenshipquot; in Deutschland. betrifft: Bürgergesellschaft, Nr. 12. Koschützke, Albrecht (Hrsg.). Bonn. Fried-
      rich-Ebert-Stiftung. (The German Road to Corporate Social Responsibility. 10 theses on Corporate Citizenship in Germany.
      Regarding: Civil Society, No 12, Koschützke, Albrecht (pub.), Bonn.)

  Habisch, A. (2003). Corporate Citizenship. Gesellschaftliches Engagement von Unternehmen in Deutschland. Berlin u.a.: Sprin-
       ger.(Corporate Citizenship. Corporate Community commitment by companies in Germany, inter alia Springer.)

  Fabisch, N. (2004). Soziales Engagement von Banken. Entwicklung eines adaptiven und innovativen Konzeptansatzes im Sinne
       des Corporate Citizenships von Banken in Deutschland. München: Rainer Hampp. (Social Commitment by Banks. Develo-
       ping ideas for an adaptive and innovative concept concerning corporate citizenship shown by banks in Germany.)

  Bertelsmann Stiftung (Hrsg.) (2005). Die gesellschaftliche Verantwortung von Unternehmen. Dokumentation der Ergebnisse einer
        Unternehmensbefragung der Bertelsmann Stiftung. Gütersloh. Verlag Bertelsmann-Stiftung. (Bertelsmann Foundation (Pub.)
        (2005) the Social Responsibility of companies. Documenting the results of a corporate sur vey conducted by Bertelsmann
        Foundation, Gütersloh. Bertelsmann Publishing.)

  Initiative Neue Soziale Marktwirtschaft (Hrsg.) (2005). “ Corporate Social Responsibility ” in Deutschland. Textmanuskript zu den Stu-
         dienergebnissen. www.insm.de (New Social Market Economy Initiative (Pub.) (2005) “Corporate Social Responsibility in
         Germany ”. Full text version of the study results. www.insm.de.)

  Zentrum für zivilgesellschaftliche Entwicklung (Hrsg.) (2007).Corporate Citizenship/Unternehmerisches bürgerschaftliches Engage-
        ment in Baden-Württemberg. Ergebnisse der repräsentativen Unternehmensstudie. Evangelische Fachhochschule. Freiburg.
        (Centre for civil society development (Pub.) (2007) Corporate Citizenship /entrepreneurial civic involvement in Baden
        Württemberg. Results of a representative business sur vey.
11


IV. Methodology Approach, Specifics of Random
Sampling, Execution of the Survey
The sampling frame covered private commer-                                      companies as well, based on a statistically ade-
cial undertakings in Germany with an annual                                     quate number of cases and also to highlight
turnover of at least one million Euros and a mini-                              distinctions between differently-sized compa-
mum of 20 staff. This approach was chosen deli-                                 nies. In the actual evaluation, this disproportio-
berately in order to include a wide range of                                    nal element was removed by means of a
companies in the sur vey, thereby possibly high-                                weighting process; i.e. in the sample, large busi-
lighting differences between small, medium,                                     nesses are weighted less than small and medi-
and large companies.                                                            um-sized companies, which receive a higher
                                                                                weighting factor. Businesses were selected on
Because the number of large businesses in Ger-                                  a random basis. The sampling frame was the
many is proportionally smaller than the number                                  “ Fi r m e n d a t e n b a n k D e u t s c h l a n d ” ( c o m p a n y
of small and medium-sized enterprises, the sam-                                 database Germany) of Hoppenstedt informati-
ples were taken to reflect this difference: com-                                on ser vice. This director y lists the most impor-
panies with a minimum of 250 staff and an annu-                                 tant companies from one million Euros turnover
al turnover of at least 50 million Euros were con-                              and with at least 20 staff upwards. The 225,000
s i d e r e d a b o v e a v e r a g e. T h i s d i s p r o p o r t i o n a l    businesses of the database in question repre-
approach makes it possible to evaluate large                                    sent approximately eighty per cent of German


Fig. 1: Businesses per number of staff, annual turnover, and sector of industr y in Germany


    Structural Data Businesses in Germany
             Number of employees                             Annual turnover in millions                         Sector of industr y




                                                                                      25,9                                        26,4
                                    33,5
                                                                                                               36,7

                62,4                                                                         6,4
                                                                     64,1                                                              14,7
                                        3,9
                                                                                                                  4,5 7,2       10,6


                < 50 staff                                             < 10 Mio. Euro annual turnover               Ser vices
                > 50 – 499 staff                                       > 10 up to 50 Mio. Euro annual               Manufacturing sector
                 > 500 staff                                       turnover                                         Construction sector
                                                                       > 50 Mio. Euro annual turnover               Other
            0,2 no statement
                                                                                                                                                 © CCCD 2007




                                                                   3,7 no statement                                 Wholesalers
                                                                                                                    Retailers
            In percentage terms

            Source: Opinion poll on corporate citizenship of companies in Germany
12


   Structural Data US Businesses
        Number of employees                   Annual turnover in millions                  Sector of industr y




                           13                                                                             26,4
                                                                      21

                                                                                           28,3                    13,1
                                28                  59                     17
              57
                                                                                                                 12,6
                                                                                             10,5     9,2


           < 50 staff                                 < 10 Mio. $ annual turnover             Ser vices
           > 50 – 499 staff                           > 10 bis 50 Mio. $ annual turnover      Manufacturing sector
           > 500 staff                                > 50 Mio. $ annual turnover             Construction sector

        2,0 no statement                           3,0 no statement
                                                                                              Other




                                                                                                                          © CCCD 2007
                                                                                              Wholesalers
                                                                                              Retailers
        In percentage terms

        Source: Opinion poll on corporate citizenship of companies in Germany


Fig. 2: Businesses per number of employees, annual turnover, and sector of industr y in the USA


real net output, meaning it is ver y comprehen-                 part of the sur vey process, 58,3 per cent of
sive, so the results gained from it can by and                  attempted inter views had to be counted as
large be applied to the all private businesses                  systematic failures: 29,7 per cent refused to
in Germany.                                                     take part, in 28,6 per cent of the cases the tar-
                                                                get person could not be interviewed in the requi-
As far as the evaluation of the American sur vey                site time. The coverage rate of the sample was
“The State of Corporate Citizenship in the US ”                 41,7 per cent. This coverage rate would be con-
(2005) is concerned, there are 1189 comple-                     sidered fairly good in telephone poll terms, and
ted polls of companies but, for evaluation pur-                 is significantly above the success rate of writ-
poses, it is important to bear in mind that the                 ten sur veys. Altogether, we obtained comple-
authors of the American study have a different                  ted inter views from 501 companies.
approach to the Germans in the way they defi-
ne company size. The definition for small com-                  There is no consensus to date about a standard
panies is 99 staff, medium companies up to                      German translation of the Anglo-American term
999 staff, and large companies over 1000 staff.                 “corporate citizenship” which is why the English
In addition, the sales figures for the US com-                  term appears to be becoming the usual word
panies are given in US Dollars rather than in                   used in politics, business, and academia. Despi-
Euros.                                                          te this, it cannot be assumed that ever yone
                                                                inter viewed is familiar with the term. That is why
In Germany, board members or members of                         in the sur vey, the term (voluntar y) corporate
corporate PR departments were inter viewed. As                  community commitment was used.
13

Given this background, a comprehensive intro-                          für Mittelstandsforschung Bonn (Bonn Institute
duction was used to assess whether a compa-                            for Medium-sized Enterprise Research), for rea-
ny had any involvement at all in the communi-                          sons of better legibility of results, a distinction
ty: on the one hand, initially, corporate citizen-                     is made between 5 :
ship was defined as “all measures and activi-
ties the company in question employs to affect
its social environment, thereby voluntarily assu-                           small businesses with up to 49 staff or less
ming social responsibility ”. On the other hand,                            than 10 million Euros annual turnover,
the issue of whether a company shows active
public commitment was analysed with the help                                medium-sized businesses with between 40
of a list of possible types of public commitment;                           and a maximum of 499 staff or an annual
in other words, it was defined by way of con-                               turnover of between 10 million to below 50
crete activities.                                                           million Euros,

Following the EU threshold values of 1st Janua-                             large businesses with a minimum of 500 staff
r y 2005, as well as the definition of the Institut                         or 50 million Euros annual turnover




3 The term Corporate Citizenship can be incorporated into a comprehensive debate on Corporate Social Responsibility (CSR) with
the two terms overlapping slightly even in literature. CSF also comprises improvements in staff working conditions, whereas Corpo-
rate Citizenship focuses more on the socio-political dimension linked with community commitment by companies. Even terms
such as Corporate Responsibility, sustainability or triple bottom line are not truly helpful in drawing the dividing lines; the interna-
tional debate continues to rage. Compare Bradley Googins, Corporate Citizenship: Lost in Translation, CCC News 07, June,
www.bcccc.net.

4 The following types of commitment were included: Cash donations, gifts in kind, free of charge provision of ser vices, free of
charge permission to use company facilities, equipment or premises, releasing staff members for community activities, support for
staff volunteering, cooperation with non-profit organisations, organisation of fundraisers and charity collections, establishment/fun-
ding of a foundation, miscellaneous (an open categor y).The list of commitment types carefully excludes the instrument of sponso-
ring, as this is seen as a strategic tool for image promotion, i.e. business practice, based on a contractual obligation the reci-
pient of sponsoring has to fulfil in return.

5 This organisation differs from the EU definition concerning distinctions between medium and large-sized enterprises to the
extent that the large business categor y is defined as having 500 and not 250 staff. This corresponds to the rule adopted by the
Bonn Institute for Medium and Large Enterprise Research. Both approaches use 50 million Euros annual turnover as the yardstick
defining a large business.
14


V. Empirical Findings from the German Survey and
Transatlantic Comparison of Selected Issues

An unequivocal “ Yes” to Corporate                             Retail companies appear to consider corpora-
Citizenship                                                    te citizenship as particularly important. The fact
                                                               that ever y one of the companies polled is inve-
The findings show that 96 per cent, or virtually               sting in its social environment, is probably due
all the German businesses sur veyed, participa-                to the fact that, unlike wholesalers for instance,
te actively in some form of corporate citizen-                 retailers are typically in direct contact with their
ship. Among businesses with at least 500 staff                 end consumers. Social commitment could con-
participation is 100%. Even the commitment                     tribute to improved customer contact through
level of small and medium-sized enterprises, the               targeted measures tying the consumer to the
predominant size of businesses in Germany ’s                   company.
corporate landscape, is on a markedly high level.




Fig. 3: Committed businesses, broken down into number of staff and sector of industr y


   Businesses with Corporate Citizenship

                                   total                                                         95,6


      staff

                                   up to 49                                                      95,2


                                   50 to 499                                                     95,8


                                   500 and more                                                    100


      sector

                                   Manufacturing Sector                                           97,0


                                   Construction Sector                                            97,3


                                   Wholesalers                                                    97,2


                                   Retailers                                                       100


                                   Ser vices                                                    93,4


                                   Other                                                         96,2
                                                                                                               © CCCD 2007




   In percentage ter ms                                                           50                   100


   Source: Opinion poll on corporate citizenship of companies in Germany
15


   Types and Tools

       Corporate Giving                                                                                       91,0


              among others Cash donations                                                                  83,4

                             Donations in kind                                                  59,7

                             Organise fundraisers and collections        19,7

                             Establishment and maintenance
                                                                        3,8
                             of foundations

       Corporate Volunteering                                                                       60,5

              among others Support for corporate volunteering                            47,9

                             Release of staff for Corporate
                                                                                32,3
                             Citizenship

       Ser vices free of charge                                                               54,1

              among others Provision of ser vices                                      41,3

                             Permission to use company facilities,
                                                                                31,4
                             equipment, or rooms

      Cooperation with non-profit par tners                                              47,0


      Other types of commitment                                         2,6




                                                                                                                           © CCCD 2007
                                                                                               50                    100
   In percentage terms
   Source: Opinion poll on corporate citizenship of companies in Germany


Fig. 4: Types and tools of corporate citizenship



Types of Corporate Citizenship                                      by comparison, despite the current nationwide
Corporate Giving – referring to donations of                        boom in new foundations, including corporate
money and in kind – is the preferred type of                        foundations.
corporate citizenship. Virtually ever y company
showing social commitment uses this traditio-                       A modern form of donation has also evolved;
nal type of commitment to support the com-                          with managerial staff and executives donating
mon good. Cash donations are the most fre-                          time and know-how, commonly grouped under
quent form, the type of commitment used by                          the buzzword corporate volunteering. The cor-
83 per cent of companies. Three out of five                         porate volunteering tool, which the survey revea-
respondent undertakings make donations in kind                      led is being used in significantly more than half
or give products or goods to organisations or                       the companies analysed, can be employed in
individuals. In addition to which, one business                     different ways. At least two aspects play a role:
in five organises fundraisers or collections for                    the first covering support for those employees,
charitable purposes. Instances of companies                         who are already engaged in society at large
choosing to set up foundations are quite rare                       outside working hours. Forty-eight per cent of
16

businesses support such types of civic involve-      Deploying Companies’ Material and Human
ment. The second aspect goes beyond accep-           Resources for Corporate Volunteering
ting private staff engagement in the company
by allotting working hours to this external civic    A nuanced analysis of those businesses (48 per
engagement. Among the respondent compa-              cent) which state they promote community com-
nies, 32 per cent release their employees for        mitment by their staff, concluded as follows:
such activities, putting in time with the volunta-
r y fire brigade for example. Releasing employe-        Eighty-one per cent of these businesses allow
es for civic involvement can also mean using            the staff to use business resources (i.e. PC,
such people for selected projects of a non-pro-         copier, company phone, company car) for
fit type. What comes to mind are one-off acti-          their civic involvement.
vities by all members of the staff, or individual
departments (so-called activity days, e.g. a            Seventy-eight per cent of these businesses
manual work day), or sitting in on classes or           allow their staff to engage in civic involve-
courses for several days, or a longer-term len-         ment during working hours.
ding of staff to ser ve charities in a managerial
function.                                               In addition to a company providing mate-
                                                        rial and human resources for civic engage-
Entrepreneurial resources of a different kind,          ment, one in four of these businesses also
involving neither cash nor people, can also be          makes money available, by supplementing
used, as is shown by at least 54 per cent of            cash donations made by members of the
businesses which make such corporate resour-            staff (matching funds).
ces as ser vices (41 per cent) or infrastructure
(e.g. premises and equipment) available to soci-        Less than one in ten (9 per cent) of this group
al concerns free of charge (31 per cent).               of companies actively encourages employe-
                                                        es to engage in civic involvement in certain
Moreover, the companies sur veyed frequently            projects and areas.
opt for corporate citizenship in conjunction with
non-profit partners. Cooperation with charita-
ble organisations is practised by 47 per cent of
the businesses in the sur vey. As a rule, such a
partnership with a non-profit organisation tack-
les projects aimed at resolving social problems,
bundling corporate resources and non-profit
know-how, which are then used jointly to achie-
ve a specific objective.
17

Preferred areas for Corporate Citizenship                           The foremost benefactor of Corporate Volun-
                                                                    teering is the area of “ neighbourhood and
In choosing areas for commitment, the busines-                      community ”, followed by “sports and leisu-
ses involved concentrate largely on “sports and                     re time” and “social affairs”
leisure time”, primarily through funding sports
and leisure time clubs. Other areas of commit-                      The ranking of subject areas for cooperati-
ment, namely “education and training” also play                     on with non-profit partner organisations is
a role, as do “ neighbourhood and communi-                          led by the sector “social affairs”, with “sports
ty ”, or “social affairs”, which are also important                 and leisure time” in second place, followed
for many of the companies participating in the                      by “education and training”.
sur vey. Adopting different policies, companies
commit in a variety of ways.                                   All in all, companies presumably prefer those
                                                               areas which can contribute to creating an
   If cash or donations in kind are involved, the              attractive environment for their business loca-
   most frequently quoted recipient is the sports              tion. There appears to be a clear focus on crea-
   and leisure time sector. The available data                 ting a well-functioning public life with a working
   does not, however, allow conclusions to be                  infrastructure, promoting the education of the
   drawn concerning the scale of support given                 local people and mitigating social problems in
   to this or other areas of involvement.                      the vicinity.




Fig. 5: Cooperation between businesses committed to the community and other organisations and
        institutions


   Cooperation with a Par tner



                                                                          with partner
                                                                          without partner
                               41,1
                                              58,9
                                                                                                                © CCCD 2007




   In percentage terms
  Source: Opinion poll on corporate citizenship of companies in Germany
18

Involving par tners in Corporate Citizen-                        social networks to resolve a specific task in a
ship                                                             sustainable way.

Corporate citizenship often occurs in the form                   The majority of the companies involved (59 per
of cooperation with other organisations and insti-               cent) operate their corporate citizenship acti-
tutions. This frequently has the advantage of                    vities in conjunction with at least one partner,
providing a local partner for concrete corpo-                    not necessarily a non-profit organisation.
rate citizenship projects who is familiar with the
partnership between a company and a local                        Whether or not a partnership is sought with
pressure group, a kindergarten, a charitable                     another organisation varies according to com-
organisation, or part of a local administration.                 pany size. Three out of four medium-sized enter-
                                                                 prises, and four out of five large companies,
In such cases, businesses support the work of                    declared having entered into partnerships for
the external partner by using resources such as                  their corporate citizenship activities, while smal-
cash, gifts in kind or human resources, while the                ler companies only rarely cooperate with a
partner provides know-how, competence, and                       partner.


Fig. 6: Partner specification


   Par tner Specification

           Local volunteer organisations (e.g. sports clubs)                                   41

                     Nurser y schools, schools, hospitals, etc.                        25

                                      Charitable organisations                    22

                                               Local authorities                  21

                                              Other businesses               13

         Employers’ Organisations, Confederations of Industr y              12

                                                      Churches              12

                               International Aid Organisations              11

                                                  Lobby groups              11

                   Government at county and regional level              6

                                                Political parties   4

                                                   Trade Unions         2

                                                 Other partners      5
                                                                                                                © CCCD 2007




                                                                                       25             50
   In percentage ter ms
   Source: Opinion poll on corporate citizenship of companies in Germany
19

Approximately half the smaller businesses enga-                            nisations as clubs, projects, and initiatives.
ge in the community without having a coope-
ration partner. The presumed reason is that small                          On the following ranks are public institutions
companies often show their social commitment                               such as education facilities and hospitals (25
by donating smaller amounts and adopting                                   per cent), national charitable organisations (22
measures which do not need the support of an                               per cent), international aid organisations and
external partner. Broken down into sectors, only                           lobby groups (11 per cent each) as well as chur-
retail companies stand out by having at least                              ches (12 per cent) are found.
one partner in seventy-one per cent of their
commitment, all the others are the average                                 On the other hand, businesses turn increasing-
level.                                                                     ly to governmental and political bodies: at least
                                                                           21 percent cooperate with local authority
In principle, partners are not essential for cor-                          departments, 6 per cent with borough or regio-
porate citizenship; after all, 41 per cent of busi-                        nal governments and 4 per cent with political
nesses have so far dispensed with this type of                             parties.
cooperation. Still, it could be argued that irre-
spective of company size, this implies a loss of                           In this context, cooperation with industr y play-
benefit from valuable experience, together with                            ers, specifically other businesses (13 per cent),
possible efficiency increases for corporate citi-                          or employer organisations or trade unions enjoy
zenship.                                                                   relatively high popularity (12 per cent).

Scrutinising the partners of companies with                                The variety of different cooperation partners
community commitment in greater detail                                     indicates that a considerable number of busi-
shows that local organisations such as clubs                               nesses actively collaborate with representatives
a n d l o c a l i n i t i a t i v e s c o m e f i r s t. A m o n g t h e   from the three sectors: state, market and, espe-
undertakings cooperating with a partner, 41                                cially, the tertiar y sector, when implementing
per cent work with such types of voluntar y orga-                          corporate citizenship.
20

Corporate Citizenship with a clear local                         mitment of almost one in ten small companies
Emphasis                                                         exceeds the regional sphere.

The great importance given to local volunteer                    The range covered by individual corporate citi-
associations as cooperation partners, indicates                  zenship measures therefore hinges on the con-
that corporate citizenship concentrates predo-                   text in which the business concerned operates.
minantly on a company ’s immediate vicinity.                     Companies with a geographically limited mar-
                                                                 ke t a n d s u p p l i e r s, s t a f f, c u s t o m e r s e t c. , a l l
Among the committed companies, three quar-                       coming from the immediate neighbourhood,
ters state they operate within their region and                  also tend to limit their engagement to this area.
in the local environment around their sites. By                  Assuming that large companies tend to opera-
contrast, companies rarely become involved in                    te on a national and global scale, the data sug-
a national (15 per cent) or international con-                   gest a geographical overlap between the envi-
text (14 per cent). Therefore, businesses tend to                ronment in which a company conducts its busi-
focus primarily on an intact environment for their               ness, where it also focuses its social commit-
company HQ, or their production site/s. Given                    ment.
how important a functioning corporate environ-
ment is for a successful business, this result does              This assumption is supported by studying the
not come as a surprise.                                          extent of corporate citizenship efforts in indivi-
                                                                 dual sectors of industr y: primarily ser vice-cen-
Higher staff levels and higher sales also mean                   tred businesses (17 per cent) and the proces-
a geographical extension of corporate citizen-                   sing industr y (15 per cent) are running corpo-
ship measures. At the same time, the kind of                     rate citizenship programmes with an internatio-
corporate citizenship which reaches out to a                     nal focus. Whereas the commitment of retailers
national or even international arena emerges                     deeply anchored in their local communities only
as an activity not left exclusively to medium and                rarely reach national (1 per cent) or even inter-
large-sized enterprises. After all, the social com-              national (5 per cent) level.


Fig. 7: Range of corporate citizenship


   Range of Corporate Citizenship
                                                             total
                                                                                             ▲            ▲            ▲
     Local/ regional, in the vicinity of the business HQ                73,8               79,5          64,4          57,9

     Local/ regional, in the vicinity of business sites            24,3                    17,8          32,5          57,9

     National                                                    14,5                      11,4          19,4          26,3
                                                                                                                                     © CCCD 2007




     International                                               13,6                       8,4          22,0          21,1

     In percentage ter ms   ▲ Small enterprises   ▲   Medium-sized enterprises    ▲      Large-scale enterprises

     Source: Opinion poll on corporate citizenship of companies in Germany
21


    Amount in Euros for 2005
                                                              total
                                                                                                  ▲          ▲           ▲
       Up to 5,000 max                                                             29,1        37,9        15,6          5,3

       From 5,000 to 10,000 max                                           17,2                 19,5        13,8          10,5

       From 10,000 to 50,000 max                                                    30,5       28,9        36,3          10,5

       From 50,000 to 100,000 max                                      5,2                     4,0         6,9           10,5

       100,000 plus                                             6,5                            1,7         12,5          31,6




                                                                                                                                © CCCD 2007
       no statement/don’t know                                     11,5                        8,1         15,0          31,6

      In percentage terms        ▲ Small enterprises   ▲   Medium-sized enterprises        ▲   Large-scale enterprises

      Source: Opinion poll on corporate citizenship of companies in Germany


Fig. 8: Corporate citizenship expenditure in 2005



Investment in Corporate Citizenship                                          and cost intensive corporate citizenship mea-
                                                                             sures remain the province of big business. Invest-
Adding up the costs involved or investment                                   ments exceeding one million Euros are compa-
required for corporate citizenship measures,                                 ratively rare.
including project and HR costs, donations and
PR expenses, yields a ver y diverse picture.                                 In this context, it is extraordinar y how many busi-
                                                                             nesses did not answer this question or claimed
In 2005, 38 per cent of the companies with up                                not to know the amount spent on corporate citi-
to 49 employees spent less than 5,000 Euros on                               zenship measures, because the overriding majo-
corporate citizenship. By contrast, 32 per cent                              rity of those which did not provide information
of companies with 500 or more staff invest more                              about the financial cost of their commitment
than 100,000 Euros in this field.                                            are large companies (5 per cent “ no answer ”,
                                                                             26 per cent “don’t know ”). The fact that a majo-
Adding these figures up shows that three quar-                               rity of these proved unable even to estimate
ters of businesses spend below 50,000 Euros.                                 the amounts involved either points to insuffi-
Small companies in particular, but even medi-                                cient controlling of their civic engagement or
u m - s i z e d o n e s t o o, v e r y r a r e l y e x c e e d t h e         indicates few such funds are available within
50,000 Euro limit. Thus far-reaching, large-scale,                           the company in question.
22

Corporate and Community Objectives                               there are discrepancies, occasionally ver y large
at the Focus of Commitment                                       ones, between big business and other underta-
                                                                 kings. Large companies assess virtually ever y
                                                                 one of the objectives as more important than
The central issue for committed companies is                     s m a l l a n d m e d i u m - s i z e d o p e r a t i o n s d o. T h e
an awareness of corporate citizenship and                        obvious conclusion is that the concept of cor-
efforts to create a “healthy ” environment around                porate citizenship, an Anglo-American import
commercial or production sites. Just about half                  after all, is recognised more clearly by large
of businesses involved consider these objecti-                   German companies because their manage-
ves important or ver y important. This means that                ment is more familiar with corporate citizenship
unequivocally society-related objectives are at                  and its terminology in terms of socio-political
the focus of the corporate citizenship efforts of                issues.
businesses, whereas strategic considerations
relating to the economic success of the com-                     As shown in figure 9, a proportionally larger num-
pany play a less important role.                                 ber of respondents rate society-related objec-
                                                                 tives highly for their business: 95 per cent cite
Yet there are also striking differences in how the               applied social responsibility as important; 74
different categories of businesses, depending                    per cent consider maintaining and improving
on their size, assess these objectives. After all,               the local environment around the company site




Fig. 9: Corporate citizenship objectives – top two findings (critical and high importance)


   Objectives
                                                             total
                                                                                            ▲           ▲           ▲
     Being aware of social responsibility                                        58,1    51,5          66,7          94,5
     Maintaining and improving the environment
                                                                           49,1          46,3          52,2          73,7
     at business HQ/sites

     Improving own competitive position                          24,1                    24,9          22,7          21,1
     Investing in society as a prerequisite for
                                                                 22,5                    20,5          23,8          47,3
     corporate economic success

     Promoting corporate volunteering                            22,4                    22,5          22,2          16,7
     Allowing society to participate in business suc-
                                                                 22,1                    17,8          28,9          27,8
     cess
     Communicating on a political level with lobbies
                                                                19,9                     17,5          23,3          31,6
     and committed citizens.
                                                                                                                                   © CCCD 2007




     Improving the bottom line                                     11,9                  12,9           8,7          20,0

     In percentage ter ms   ▲ Small enterprises   ▲   Medium-sized enterprises     ▲    Large-scale enterprises

     Scale from 1 = critical, up to 5 = no impor tance
     Source: Opinion poll on corporate citizenship of companies in Germany
23


   Comparing Corporate Citizenship Objectives in Germany/the US


    Importance of objective
    corporate citizenship engage-        ...improving conditi-             ...supporting              ...responding to
    ment within the business com-        ons in your communi-              employee volunteer-        community/ interest
    munity                               ty                                ism                        groups regarding issu-
                                                                                                      es they care about
    How about...

                                     D                 18,0                            26,0                             37,0
       Not at all important
                                   USA     0,7                                 7,1                      6,3


                                     D          8,0                                  22,0                        22,0
       Somewhat important
                                   USA           9,5                                 22,7                            26,5


                                     D                   25,0                           29,0                    21,0
       Important
                                   USA                        34,5                             39,6                         41,8


                                     D                          37,0                 20,0                     15,0
       Ver y Important
                                   USA                            45,3                 25,5                     21,8


                                     D           12,0                        2,0                        5,0
       Critical
                                   USA          9,6                           4,3                       3,4


                                     D    0,0                                0,0                       0,0
       don’t know
                                   USA    0,0                               0,0                        0,0


                                     D                  478                           478                        478



                                                                                                                                   © CCCD 2007
       Total
                                   USA                 1158*                         1158*                      1158*

   In percentage terms                      *no statement 0,4                  *no statement 0,9         *no statement 0,3
   Source: Opinion poll on corporate citizenship of companies in Germany


Fig. 10: Comparing corporate citizenship objectives in Germany/the US


to be important, and 47 per cent believe cor-                            pursued in a diffuse way becomes even more
porate citizenship a prerequisite for economic                           clear when we relate this to comparable results
success.                                                                 from the 2005 sur vey “The State of corporate
                                                                         citizenship in the US ”. Data is available for three
This is a relatively high result. But at the same                        of the objectives cited in illustration no. 9. Com-
time it is clear that market and customer-rela-                          paring the top two results of US businesses with
ted objectives are not the main focus, becau-                            those of German businesses on the issue of
se only 20 per cent of companies relate their                            “ maintaining and improving the environment
public involvement to improvements in the bot-                           around a business or production location”, shows
tom line.                                                                that businesses on both sides of the Atlantic
                                                                         rate this question equally highly in relative terms
The picture which emerges of objectives being                            (US 55 per cent, Germany 49 per cent). Strikin-
24

gly different is the fact that 18 per cent of Ger-                           engagement ”. In Germany 22 per cent rate this
man businesses but only 0,7 per cent of Ame-                                 objective highly and in the US the figure is 30
rican businesses state this objective bears no                               per cent rate. It is hardly surprising that this so-
relation to their own corporate citizenship acti-                            called “corporate volunteering” is not yet wide-
vities.                                                                      ly known in Germany, what is surprising is the
                                                                             fact that 26 per cent of German companies,
There is a similar result for “Political communi-                            as opposed to just 7 per cent of US companies,
cation with lobby groups and engaged citizens”.                              consider this issue to be of no importance wha-
Here again, there is not much difference bet-                                tever.
ween the top two results (US 25 per cent, Ger-
many 20 per cent). And a striking feature in this                            Obviously, German companies still have diffi-
context is the number of German businesses                                   culties in consistently determining the objecti-
which do not assess communication with sta-                                  ves linked to their corporate citizenship activi-
keholders having any importance (Germany 37                                  ties. Their perception of social responsibility alt-
per cent, US 6,3 per cent).                                                  hough highly rated, does not yet follow a stra-
                                                                             t e g y o f c o r p o r a t e a n d c o m m u n i t y- f o c u s e d
The same differences come up in the third area                               engagement together with a corresponding
o f c o m p a r i s o n “ Pr o m o t i o n o f s t a f f v o l u n t e e r   communication concept.
25

Happening by Chance or Business Stra-                              nesses as a whole tend to shape their involve-
tegy Planning of Corporate Citizenship                             ment in a reactive way. The majority of respon-
                                                                   dent businesses only become involved in the
Measures
                                                                   community when appropriate charitable or soci-
                                                                   al concerns are suggested from outside. The-
Corporate Culture as Orientation
                                                                   refore, only a minority of 38 per cent is active-
In more than three quarters of all cases corpo-                    ly looking for a way to show societal steward-
rate citizenship is part of the way a company                      ship and invest in the common weal with con-
sees and defines itself. Just as many busines-                     cepts and projects initiated in-house. Having
ses take care to ensure that any outside sug-                      corporate citizenship deeply anchored in cor-
gestions for involvement in issues fit the busi-                   porate culture, while at the same time having
ness, and that the business model plays a vital                    a more reactive approach to it, reveals a discre-
role in determining the planning and implemen-                     pancy which does not match the clear strate-
tation of societal stewardship activities, corpo-                  gic positioning of the idea of corporate citizen-
rate citizenship in most German businesses can                     ship in the company. But here again, compa-
be counted an integral part of the corporate                       ny size plays a role which should not be over-
culture.                                                           looked: the larger a business, the more strate-
                                                                   gic and active the planning and implementa-
At the same time, the data suggest that busi-                      tion processes for corporate citizenship appe-



Fig. 11: Strategic anchoring of corporate citizenship measures


   Strategic Approach to Corporate Citizenship

     Corporate citizenship is part of our self-image and we
                                                               total
                                                                                             ▲          ▲          ▲
     provide money, working hours, gifts in kind especially                       78,2     78,5        76,7        84,2
     for this.

     We take care that any request is fitting for our compa-
     ny.
                                                                                  77,2     75,2        78,6        75,2

     We follow our company model in planning and imple-
     menting our social involvement.
                                                                              68,5         64,1        74,4        84,2

     We are, ourselves, actively looking for ways to com-
     mit.
                                                                       37,5                33,3        42,1        63,2

     Our community commitment follows clear, measura-
     ble targets.
                                                                   31,5                    33,2        27,7        31,6

     There is a predetermined action plan for our commu-
     nity commitment.
                                                                    12,9                   11,4        14,5        21,1

     We have evaluation tools for our commitment measu-
                                                                                           13,1         9,4        26,3
                                                                                                                          © CCCD 2007




                                                                    12,3
     res.

    In percentage terms      ▲ Small enterprises   ▲   Medium-sized enterprises   ▲      Large-scale enterprises

    Source: Opinion poll on corporate citizenship of companies in Germany
26

ar to be. Another finding also comes into play                  Corporate Citizenship no PR-tool
in this context – large enterprises tend to put
greater emphasis on evaluation, i.e. employ-                    Among engaged businesses it is the large com-
ing tools to evaluate corporate citizenship mea-                panies with large turnovers in particular (89 per
sures.                                                          cent) which make their corporate citizenship
                                                                engagement clear to the public. Usually, this is
                                                                done via press notices and press reports (79 per
Responsibility for Corporate Citizenship in the                 cent of large companies), via the company
Company                                                         homepage (58 per cent) or via customer maga-
                                                                zines (32 per cent), all of which provide written
Responsibility for societal stewardship rests pri-              information about corporate citizenship. In addi-
marily with company executives. In larger busi-                 tion, all sorts of events are used to draw people’s
nesses, management and organisation of cor-                     attention to this engagement. Also, 21 per cent
porate citizenship measures are also delega-                    of companies with high staff levels mention their
ted to more than one person. As a rule, the cor-                corporate citizenship activities in their annual
porate citizenship theme is then part of the                    reports.

Fig. 12: Responsibilities for corporate citizenship within the business


   Responsibilities
                                                            total
                                                                                          ▲          ▲            ▲
     Owner/manager                                                           90,2       93,6        86,9          65,0

     Board                                                     7,7                      5,0         11,3          21,1

     Press/PR department                                       6,9                      3,7         10,0          31,6
     No particular responsibility/ever yone is responsi-
                                                              1,9                       0,7          3,8          5,3
     ble

     Cross-sectional unit from different departments          1,9                       0,7          3,1          10,5
     Specially established department/body for cor-
                                                              1,5                       0,7          2,5          5,3
     porate citizenship
                                                                                                                         © CCCD 2007




     Other departments/staff                                   6,9                      5,0          8,8          21,1

     In percentage ter ms   ▲ Small enterprises   ▲   Medium-sized enterprises      ▲   Large-scale enterprises

     Source: Opinion poll on corporate citizenship of companies in Germany


responsibility of both the press and PR depart-                 A mere 16 per cent of large-sized enterprises
ments, as well as being addressed as a cross-                   use their image as corporate citizens in active
sectional task by a variety of other concerned                  self-promotion in the print and electronic media.
areas. But it is rare to find a dedicated depart-               This means that only a tiny group of companies
ment for corporate citizenship established wit-                 tie their community commitment in with promo-
hin the company; though where such depart-                      ting their marketing and sales activities. The fact
ments do exist, they are not exclusively the pro-               the German public might take a rather scepti-
vince of large-scale businesses.                                cal view of a link between civic engagement
27

and business self-interest, may explain this atti-    as a PR tool. Unlike large companies, SMEs do
tude. Companies have no wish to expose them-          expend much effort on publicising their com-
selves to complaints of having abused corpo-          munity commitment. Half the small businesses
rate citizenship as a PR tool, which might put        and 43 per cent of medium-sized enterprises
their credibility at risk. It seems equally likely,   even state they do not report their activities in
though, that companies simply do not expect           the community at all. The motto “do good and
sufficient benefit from extensive communicati-        talk about it ” therefore seems to apply much
on of corporate citizenship activities.               more to large-sized companies. They use diffe-
                                                      rent ways in which to communicate their civic
For small and medium-sized businesses corpo-          engagement and tr y to publicise this in a cre-
rate citizenship hardly appears to matter at all      dible and responsible manner.
28

Socio-political Attitudes of Companies                                  porate citizenship than is perceived by the
with Regard to Corporate Citizenship                                    public. Among the companies inter viewed in
                                                                        the US, 92 per cent agree with this statement.
                                                                        In Germany, the view is held predominantly by
The sur vey “The State of corporate citizenship                         small and medium-sized companies, (83 per
i n t h e U. S. ” h a s p r o v i d e d c o m p a r a t i v e d a t a   cent each), in other words, by those which do
regarding the complex issue-related attitudes                           least to publicise their civic engagement, whe-
which companies have vis-à-vis corporate citi-                          reas in the US, mainly large businesses subscri-
zenship, the effect of factors with both positive                       be to this opinion (98 per cent).
and negative influence, as well as a selection
of core areas for corporate citizenship. In Ger-                        Similar views are expressed by German and
many, just 83 per cent of companies sur veyed                           American businesses when asked whether cor-
assumed that many companies have more cor-                              porate citizenship should be regulated by the

Fig. 13: Comparative findings of socio-political attitudes, Top two findings (fully agree, agree)


    Attitudes

                                                                        total                             ▲          ▲          ▲
                                                                        D                  82,8          83,0        83,2       73,6
       Many companies do a great deal more for their
       communities than is talked about or known
                                                                        USA                      92        91         90        98

                                                                        D                 80,5           80,4        81,5       73,7
       Corporate citizenship should be completely
       voluntar y - no laws / regulations should govern it
                                                                        USA                 80             81         78        75

                                                                        D            66,2                64,1        69,2       66,7
       Many companies promote corporate citizenship,
       but are not truly committed to it
                                                                        USA     47                         49         48        42

                                                                        D          60,6                  61,6        57,7       66,7
       Corporate citizenship needs to be a priority for
       companies
                                                                        USA                 81             77         87        98

                                                                        D    46,1                        41,5        52,9       63,1
       The public has a right to expect good corporate
       citizenship from companies
                                                                        USA            69                  66         69        91

                                                                        D   40,4                         40,7        40,1       42,1
       Corporate citizenship makes a tangible contribution
       to business' bottom line
                                                                        USA           64                   61         65        84
                                                                                                                                       © CCCD 2007




     In percentage ter ms       ▲ Small enterprises    ▲    Medium-sized enterprises          ▲       Large-scale enterprises
    Scale: from 1 = agree completely, to 5 = do not agree at all

    Source: Opinion poll on corporate citizenship of companies in Germany
29

state. On this, there is agreement across the                        German companies are far more self-critical
border: 81 per cent of German and 80 per cent                        and therefore also fairly realistic when asses-
of American companies reject this. In Germa-                         sing how well they implement corporate citizen-
ny, though, this opposition is clearly more pro-                     ship in practice. 66 per cent of German respon-
nounced (68 per cent of German businesses                            dents are of the opinion that civic engagement
reject this totally compared to 40 per cent of                       may well be highly rated within the company,
US businesses). This has to be considered against                    but is not implemented sufficiently well. 67 per
the backdrop of histor y, where in Germany there                     cent of large-scale businesses agreed with that.
is already an institutional system which has evol-                   I n t h e U S, o n l y 4 7 p e r c e n t o f r e s p o n d e n t s
v e d o v e r t i m e, t h e s o c i a l m a r ke t e c o n o m y,   agreed.
which institutionally integrates businesses into
society at large; e.g. the dual vocational trai-                     The huge gap which exists in both countries con-
ning system, sustainability strategies, or clima-                    cerning their assessment of a tangible contri-
te protection programmes. Still, businesses are                      bution of corporate citizenship to business suc-
interested in being independent in selecting                         cess is remarkable. The American response is a
whether and which type of corporate citizen-                         good 63 per cent, clearly above the German
ship practices to choose, and to use their resour-                   response by 23 per cent. Irrespective of com-
ces freely without restrictions imposed by the                       pany size, only about 40 percent of German
state. In both countries, it is above all the small                  businesses admitted to deriving a positive busi-
and medium-sized enterprises which are the                           ness effect from corporate citizenship, where-
ones to reject state inter vention. In principle,                    as in the US, the response differs more clearly
the type and scale of corporate citizenship is                       according to company size. 84 per cent of Ame-
something they believe should be decided on                          rican large-scale businesses give a positive ans-
a voluntar y basis.                                                  wer. This last comparison in particular shows how
                                                                     different companies see and define themsel-
As far as questions of attitude are concerned,                       ves in this respect, which is the key point for cor-
clear distinctions can be made between Ger-                          porate citizenship on both sides of the Atlantic.
man and American companies, indicating how
deeply anchored corporate citizenship is in the                      Positive Reinforcement Factors for Corpora-
way American companies see themselves as                             te Citizenship
coming from the tradition of “ welfare capita-
lism”. The postulated statement that society has                     When asked which factors reinforce corporate
a right to expect companies to be societal ste-                      citizenship, a similar picture emerges, indica-
wards meets with the full or partial approval of                     ting that corporate citizenship is anchored to a
69 per cent of American businesses sur veyed,                        different extent in the two countries’ businesses.
with large-scale enterprises by far the ones most
in favour. Only 46 per cent of German busines-                       Here again, there are clear differences between
ses share this view but here, too, 63 per cent                       Germany and the US, regarding the attitudes of
of large-scale companies are in favour; putting                      small and medium-sized enterprises as well as
them clearly above the average. Just about 61                        large businesses. On average, 62 per cent of
per cent of the German companies asked con-                          all German companies agree that corporate
sider societal stewardship a corporate priority,                     citizenship fits in well with the tradition and the
while in the US this amounts to as much as 81                        values of the company, but for large-scale busi-
per cent.                                                            nesses the figure is 83 per cent. About 73 per
30


   Factors of Positive Reinforcement of Corporate Citizenship

                                                                 total                             ▲          ▲         ▲
    Internal factors

                                                                 D            61,8               60,1       62,9        83,3
      It fits our company traditions and values
                                                                 USA                 73           68         79          91
                                                                 D     49,6                      45,8       54,4        73,7
      It improves our reputation/image
                                                                 USA          56                  54         57          76
                                                                 D          30,1                 30,8       28,3        36,9
      It is part of our business strategy
                                                                 USA     44                       41         45          64
                                                                 D   14,7                        12,4       14,0        50,0
      It helps to recruit and retain employees
                                                                 USA        30                    25         34          55

    External factors

                                                                 D   38,3                        36,7       38,2        70,0
      It is expected in our community
                                                                 USA   24                         20         24          50
                                                                 D     24,2                      21,1       28,3        36,8
      It is important to our customers/consumers
                                                                 USA          36                  33         36          53
                                                                 D   3,1                          3,7        1,2        5,3
      It responds to laws and political pressures
                                                                 USA     14                       14         12         18     © CCCD 2007


   In percentage ter ms    ▲ Small enterprises   ▲   Medium-sized enterprises             ▲   Large-scale enterprises
   Scale from 1 = ver y strong positive reinforcement effect, to 5 = no positive reinforcement effect at all

   Source: Opinion poll on corporate citizenship of companies in Germany



Fig. 14: Comparative findings of factors with positive reinforcement on corporate citizenship in
         Germany/USA
         Top two findings (ver y strong positive reinforcement effect, strong positive reinforcement
         effect)



cent of the American companies in the sur vey,                   are an important factor for one German busi-
and 91 per cent of large businesses, confirm                     ness out of two, with three quarters of large-
this reinforcing effect.                                         scale business respondents making this clear.
                                                                 In the US too, image matters to 56 per cent of
With regard to the second most important moti-                   all companies, in particular to 76 per cent of
vation for corporate citizenship, image impro-                   large businesses.
vement, we notice similar differences concer-
ning company size in Germany and the US. On                      A major difference between American and Ger-
average, opportunities for image improvement                     man companies emerges when asking whether
Survey Corporate Volunteering Eng
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Survey Corporate Volunteering Eng

  • 1. CCCD Centrum für Corporate Citizenship Deutschland Corporate Citizenship in Germany and a Transatlantic Comparison with the USA Results of a CCCD Survey ata
  • 2. 2 CCCD – the Center for Corporate Citizenship Ger many is a non-profit organisation at the inter face between business, academia, and politics. In cooperation with leading companies, both domestic and foreign, acade- mic institutions and civil society organisations, CCCD acts as a think tank and competence centre, providing a platform for dialogue; acting as cata- lyst and host. In this capacity, the CCCD arranges forums for exchange between corpo- rate citizens, business, academia, politics and civil society, supplies and carries out applied research, facilitates learning processes through deba- te and skilling opportunities, and supports cooperation between businesses and partners from civil society, academia, and/or politics. Using workshops, publications and public events, CCCD also acts as a dri- ving force for the corporate citizenship debate in Germany and for the practical efforts by businesses taking an active role in society. CCCD is the German partner of the Center for Corporate Citizenship at Boston College, USA, as well as a partner of Business in the Community, UK. www.cccdeutschland.org
  • 3. 3 Inhalt I. Preliminar y remarks 5 II. Key Findings 7 III. Introduction 9 • Key issues and objective of the sur vey IV. Methodology approach, specifics of random sampling, execution of the sur vey 11 V. Empirical findings from the German sur vey and transatlantic comparison of selected issues 14 • An unequivocal “ Yes” to corporate citizenship 14 • Types of corporate citizenship 15 • Deploying companies’ material and human resources for corporate volunteering 16 • Preferred areas for corporate citizenship 17 • Involving partners in corporate citizenship 18 • Corporate Citizenship with a clear local emphasis 20 • Investment in corporate citizenship 21 • Corporate and community objectives at the focus of commitment 22 • Happening by chance or strategic business planning of corporate citizenship measures 25 Corporate culture as a guideline Responsibility for corporate citizenship in the company Corporate Citizenship no PR-tool • Socio-political attitudes of companies with regard to corporate citizenship 28 Positive reinforcement factors for corporate citizenship Factors with a limiting effect on corporate citizenship • Issues and areas for corporate citizenship 34 • Investing in the future of corporate citizenship 36 VI. Summar y of results 37
  • 4. 4 Views and Comments: “This is exactly what we were hoping for when we talked about the idea of doing a sur vey on corporate citizenship on an international level: interesting comparative findings on the differences and similarities. Both understanding and practice var y considerably in different national settings. Therefore the global idea of corporate citizenship needs differentiated, culture sensitive grounding. We hope CCCD’s survey on corporate citizenship in Germany to be the first one of a whole series, to be conducted in different parts of the world which will enable us to develop a truly global understanding of the why and the how of corporate citi- zenship.” (Prof. Bradley K. Googins, Executive Director, The Center for Corporate Citizenship at Boston College) “Responsible activities by businesses need to be geared towards meeting both the society ’s needs and shareholder interests, which implies following the business strategy. This makes the key question for issues and projects: what benefits the business? What benefits society? Changing over from philanthropic individual measures to a strategic overall concept for corporate citizenship is a learning cur ve we have gone through as well. On the basis of our corporate values and business strategy we have revised previous activities and put in place new long-term projects, based on our core competences and the needs of society ”. (Jürgen W. Cuno, Director, Government & External Affairs, Deutsche BP) “ Whenever politics expects companies to show social involvement, there is a suspicion that companies are supposed to act as stopgaps for a state retreating from welfare state respon- sibilities. This is not the case. Corporate citizenship brings a specific value of its own to both the community and the economy. In addition, it is a cornerstone for a new social compact between citizens, the state and business, resting primarily on cooperation and increased participation. (Dr. Michael Bürsch, Member of the German Parliament) “A global and committed company always encounters special circumstances in different countries. To be successful, in business as in civic engagement, one has to forge links bet- ween different corporate cultures as well as cultures of involvement. A US business active in Germany will always build bridges between different economic and community commit- ment approaches. A comparative study, revealing both the common ground and the diffe- rences, is most helpful in this respect.” (Hans-Peter Teufers, Director Public Affairs Central & Eastern Europe UPS) “Corporate citizenship and corporate social responsibility have become important issues for the future. But in Germany and elsewhere, an empirical analysis based on sound methodo- logy is only just beginning. And yet, decision-makers in business, politics and society need this knowledge… and the present study will provide a useful source of information to all of the above – and will hopefully be followed by responsible action”. (Prof. Manfred Güllner, Managing Director, forsa. Gesellschaft für Sozialforschung und sta- tistische Analysen)
  • 5. 5 I. Preliminary Remarks The study on hand “Corporate Citizenship in Ger- poll, which are relevant for the German con- many and a Transatlantic Comparison with the text, have been put into German and integra- USA” surveys corporate citizenship involving com- ted into the German sur vey, paying particular panies in Germany. For the first time, the data attention to the specifics of the German situa- collected will be compared with similar findings tion. Taking into account the diverse political, from the US. Accordingly, some of the points economic, and cultural characteristics of com- these two cultures of social involvement share p a n i e s i n b o t h c o u n t r i e s, t h e d a t a p e r m i t s - and some of their differences - can be iden- instructive interpretation of selected dimensi- tified and analysed, which gives German busi- ons of corporate citizenship in Germany and nesses an opportunity to place their own prac- the US. tice of community commitment in an interna- tional context and, if necessar y, readjust it. The Germany-related results of the final report as submitted are based in part on comments The Study contains fundamental results from an on the report made by Professor Dr. Dr. Seba- empirical sur vey on the issue of “ Corporate Citi- stian Braun and Mark Kukuk of the Paderborn zenship in Germany ”, conducted between Sep- University research centre on social involvement. tember and November 2006. The poll formed The sections focusing on the transatlantic com- part of a research project involving several of parison are based in part on the results elabo- the cooperation partners of CCCD, to whom we rated by Dr. Karin Lenhart. would like to express our thanks for their sup- port and participation. Dr. Frank W. Heuberger CCCD Deutsche BP AG acted as a generous principal sponsor, and UPS supported the evaluation and publication of the study results. The preparato- r y work, including drawing up the German que- stionnaire, was done by CCCD in cooperation with the Paderborn University research centre on social involvement. Forsa undertook nation- wide and cross-sector polling of businesses, u s i n g c o m p u t e r- a i d e d t e l e - i n t e r v i e w s ( C AT I system). For the first time, thanks to the partnership bet- ween CCCD and the Center for Corporate Citi- zenship at Boston College, USA, reference could be made in individual subject areas, to the study 1 The State of Corporate Citizenship in the U.S. Business Per- “The State of Corporate Citizenship in the US ”, spectives in 2005. The Center for Corporate Citizenship at conducted in 2005 by the Center and the US Boston College. Boston. 2005. Note: The German text uses the gender-specific masculine pronoun. This is simply to facilitate Chamber of Commerce, allowing a direct com- legibility and reading comprehension; the content addresses parison of results. Those item batteries of the both men and women equally.
  • 6. 6 Introductor y remarks for the English more attractive for the US-American reader to com- pare individual results and interpretations from edition both countries and to contrast these with his or The English-language edition of the sur vey on Cor- her own experience in this area. porate Citizenship in Germany and the USA is a first attempt at a quantity-based identification and Despite the many similarities in some areas of Cor- analysis of central elements of the social commit- porate Citizenship in Germany and the US, there ment shown by companies which are either based are also amazing differences in others. In part, in Germany or which are transnational companies, these are due to different entrepreneurial traditi- either manufacturing or selling their goods or ser- ons in the two countries, but primarily they reflect vices in Germany. a historical and cultural development which made them set different priorities in fields such as health The results of the sur vey afford the English-langua- care, combating poverty, disaster relief, or exten- ge reader unparalleled insight into the communi- ding global trade. For both countries these data ty commitment of businesses operating in the Ger- will ask in the medium-term whether more inten- man economic environment. The CCCD had the sive Corporate Citizenship will mean that the rules opportunity to refer to comparative material from of business as a whole will be rewritten. the 2005 study “ The State of Corporate Citizen- ship” conducted by the Center for Corporate Citi- Dr. Frank W. Heuberger zenship at Boston College, which makes it even CCCD
  • 7. 7 II. Key Findings Irrespective of their size, companies in In Germany, only 40 per cent of businesses, irre- Ger many profess their social responsibility. spective of company size, expect their com- Almost all the companies polled, 96 per cent mitment to yield any positive economic result. exhibit some kind of corporate citizenship. In the US, 63 per cent of all enterprises and 84 per cent of large enterprises, are convinced that their civic involvement will have an imme- In a regional context, gif ts of both money diate and positive effect on their business acti- and in kind are typical of the corporate citi- vities zenship displayed by Ger man companies. There is also widespread support among the staff for voluntar y activities and the provision of Only 16 per cent of large-scale German such ser vices typifies German corporate volun- companies interlink corporate citizenship with teering. The larger the company, and the more marketing and sales activities. internationally active it is, the broader the range Instead, traditional PR tools such as press state- of its commitment. ments, homepages, or customer newsletters are widely used to inform about the compa- nies ’ role in public life. More than three businesses out of four consider corporate citizenship par t of the image they have of themselves, and par t of In both Ger many and the US, enterprises their corporate culture. Still, the majority of are strongly opposed in equal measure to Ger man businesses have not chosen to be any regulator y inter ference in their enga- corporate citizens on their own initiative. gement. Fewer than 40 per cent of the companies que- Only 3 per cent of businesses regard legal pro- stioned are actively searching for areas in which visions in Germany as positive reinforcement, to become active and engaged. Even fewer whereas in the US 14 per cent see their com- businesses set measurable targets. mitment influenced by such provisions. Most Ger man companies are still – unli- Where the quality of corporate citizenship ke those in the US – far removed from an inclu- measures adopted is concerned, German sive concept which would make corporate companies are clearly more self-critical than citizenship an integral par t of the corpora- their American counterpar ts. te strategy, integrated into the companies’ Two-thirds of respondents (66 per cent) in Ger- core business and competencies. many state that corporate citizenship is con- This is particularly true for small and medium- sidered important in principle though it is not sized enterprises. actually implemented consistently, but only 47 per cent of American businesses share this view. Unlike US American companies, the majo- rity of German businesses are not convin- More than one third (39 per cent) of com- ced that corporate citizenship can make any panies in Ger many assume their corporate measurable contribution to their economic citizenship has no relevance to customer satis- success. faction.
  • 8. 8 Among American companies, this figure is just Surprisingly, exactly the opposite occurs when 11 per cent. Virtually half the German com- company size is taken into account. The lar- panies (48 per cent) consider that corporate ger the company in Germany, the more fre- citizenship is not a factor in attracting and retai- quently lack of resources is cited, while in the ning staff, while only 15 per cent of US com- US it is the opposite case. panies dispute this. More than 41 per cent of Ger man com- According to the majority of businesses panies do not work with a par tner in their cor- on both sides of the Atlantic by far the most porate citizenship. serious obstacle to stronger civic involvement That means they forgo the chance of benefi- is a lack of resources (US: 54 per cent; Ger- ting from experience made in other sectors of many: 48 per cent). society for their corporate citizenship measures.
  • 9. 9 III. Introduction The debate on corporate citizenship is driven t i c a l o b j e c t i v e s. A g a i n s t t h i s b a c k d r o p, t h e by a view of the company as a good corpora- “altruistic motivation” of well-off individual entre- te citizen, who is or should be, actively invol- p r e n e u r s d o e s n o t m a t t e r v e r y m u c h, u n l i ke ved in resolving social issues. achieving a win-win strategy. Expectations cen- tre on a congruence of social and entrepre- This involves exclusively those corporate activi- neurial interests, requiring a readjustment in the ties which might contribute to the common relationship between business, the state, and good, irrespective of any assessment of inter- civil society to provide the launch pad for a nal company processes. These activities inclu- new social compact. de all one-off or permanent volunteer ser vices intended to benefit society at the local, regio- nal, national, or global level, which are outsi- Key Issues and Objectives of the Sur vey de the genuine business activities of the com- pany. Basically, therefore, corporate citizenship The object of the sur vey is an empirical analy- means company investment in the social or sis of entrepreneurially and socially-oriented cor- natural environment which exceeds its normal porate citizenship in Germany. The main que- business sphere. stion asked is: how and to what extent do Ger- man companies commit to public concerns, Corporate community commitment is recogni- going beyond their immediate business activi- zed as benefiting the various ways in which ties. Within a company ’s corporate citizenship entrepreneurial resources can be employed. measures, which objectives are business-rela- But increasing attention is being paid to how a t e d a n d w h i c h a r e s o c i e t y- r e l a t e d ? To w h a t business can profit from its corporate citizen- extent are corporate citizenship measures plan- ship activities. The benefits accruing to com- ned and implemented as part of the business panies from their engagement lie in creating strategy? What are the socio-political attitudes prerequisites for improving economic per for- which companies associate with the issue of mance. Competitiveness and economic per- corporate citizenship? Which are the social areas formance, for instance, can be raised by tar- and issues of interest to companies? What is geting improvements of the corporate image, happening concerning investments in the futu- infrastructure improvements on production sites, re of corporate citizenship? a t t r a c t i n g n e w c u s t o m e r s, n e t w o r k i n g i n t h e company ’s local and regional environment, or Researchers Maaß/Clemens (2002), Heuberger/ positive effects in the area of HR development O p p e n / Re i m e r ( 2 0 0 4 ) , H a b i s c h ( 2 0 0 3 ) , a n d and external communication. Fabisch (2004) provided initial empirical studies on corporate citizenship activities undertaken Linking civic involvement and corporate busi- by companies in Germany. The explorative study ness objectives provides a new impetus in Ger- of Heuberger/ Oppen/Reimer focuses on selec- many where so far the debate on community ted corporate citizenship measures taken by commitment has been ver y much dominated individual companies, while the IfM Bonn study by a socio-political focus addressing compa- of Maaß/Clemens targets exclusively medium- nies from, as it were, “outside”. This new direc- sized enterprises, on the basis of a quantitati- tion ties in closely with the communication-poli- ve sur vey. Habisch (2003) presents “ best prac-
  • 10. 10 tice examples”, using the applications compa- Germany are volunteers in state and/or socie- nies had submitted for the “ freedom and respon- ty. The current sur vey “ Corporate Citizenship - sibility ” award. By contrast, the sur vey conduc- Unternehmerisches bürgerschaftliches Engage- ted by Fabisch (2004) looks into the social invol- ment in Baden-Württemberg ” (entrepreneurial vement of banks, concentrating its sophistica- community commitment in the state of Baden- ted empirical and theoretical work on one spe- Württemberg), conducted by the centre for civil cific industr y. society development (2007) is the most sophi- But both the so far most influential of all these sticated attempt to date at analysing civic cor- studies, by the Bertelsmann Foundation (2005) porate involvement at the regional level. and the “Initiative Neue Marktwirtschaft ” (New Social Market Initiative), adopted a ver y diffe- The sur vey described follows these other studies rent approach. Both studies sur vey companies in certain respects, but it also diverges from them active in Germany on a cross-sectoral basis. by having a different content-focus. This is shown However, the Bertelsmann sur vey focus is on particularly clearly in the attempt to provide an “Die gesellschaftliche Verantwortung von Unter- international comparison with the US and inve- nehmen” (The Social Responsibility of Busines- stigate how corporate citizenship is anchored in ses) and studies not only external public invol- corporate structures, and linked with flanking vement, but also internal commitment (e.g. staff socio-political attitudes within. Any insight gai- equal opportunities, staff social benefits), the ned can give indications to German companies New Social Market Initiative pays special atten- concerning a strategic (re-) adjustment of their tion to the extent to which company owners in own corporate citizenship commitment. 2 Maaß F., Clemens, R. (2002). Corporate Citizenship. Das Unternehmen als guter Bürger. Schriften zur Mittelstandsforschung Nr. 94 NF. Wiesbaden: Deutscher Universitäts-Verlag. (Corporate Citizenship. Business as a good citizen. Essays on researching medium-sized enterprises. Pub. German University Press) Heuberger, F., Oppen, M., Reimer, S. (2004). Der deutsche Weg zum bürgerschaftlichen Engagement von Unternehmen. 10 The- sen zu quot;Corporate Citizenshipquot; in Deutschland. betrifft: Bürgergesellschaft, Nr. 12. Koschützke, Albrecht (Hrsg.). Bonn. Fried- rich-Ebert-Stiftung. (The German Road to Corporate Social Responsibility. 10 theses on Corporate Citizenship in Germany. Regarding: Civil Society, No 12, Koschützke, Albrecht (pub.), Bonn.) Habisch, A. (2003). Corporate Citizenship. Gesellschaftliches Engagement von Unternehmen in Deutschland. Berlin u.a.: Sprin- ger.(Corporate Citizenship. Corporate Community commitment by companies in Germany, inter alia Springer.) Fabisch, N. (2004). Soziales Engagement von Banken. Entwicklung eines adaptiven und innovativen Konzeptansatzes im Sinne des Corporate Citizenships von Banken in Deutschland. München: Rainer Hampp. (Social Commitment by Banks. Develo- ping ideas for an adaptive and innovative concept concerning corporate citizenship shown by banks in Germany.) Bertelsmann Stiftung (Hrsg.) (2005). Die gesellschaftliche Verantwortung von Unternehmen. Dokumentation der Ergebnisse einer Unternehmensbefragung der Bertelsmann Stiftung. Gütersloh. Verlag Bertelsmann-Stiftung. (Bertelsmann Foundation (Pub.) (2005) the Social Responsibility of companies. Documenting the results of a corporate sur vey conducted by Bertelsmann Foundation, Gütersloh. Bertelsmann Publishing.) Initiative Neue Soziale Marktwirtschaft (Hrsg.) (2005). “ Corporate Social Responsibility ” in Deutschland. Textmanuskript zu den Stu- dienergebnissen. www.insm.de (New Social Market Economy Initiative (Pub.) (2005) “Corporate Social Responsibility in Germany ”. Full text version of the study results. www.insm.de.) Zentrum für zivilgesellschaftliche Entwicklung (Hrsg.) (2007).Corporate Citizenship/Unternehmerisches bürgerschaftliches Engage- ment in Baden-Württemberg. Ergebnisse der repräsentativen Unternehmensstudie. Evangelische Fachhochschule. Freiburg. (Centre for civil society development (Pub.) (2007) Corporate Citizenship /entrepreneurial civic involvement in Baden Württemberg. Results of a representative business sur vey.
  • 11. 11 IV. Methodology Approach, Specifics of Random Sampling, Execution of the Survey The sampling frame covered private commer- companies as well, based on a statistically ade- cial undertakings in Germany with an annual quate number of cases and also to highlight turnover of at least one million Euros and a mini- distinctions between differently-sized compa- mum of 20 staff. This approach was chosen deli- nies. In the actual evaluation, this disproportio- berately in order to include a wide range of nal element was removed by means of a companies in the sur vey, thereby possibly high- weighting process; i.e. in the sample, large busi- lighting differences between small, medium, nesses are weighted less than small and medi- and large companies. um-sized companies, which receive a higher weighting factor. Businesses were selected on Because the number of large businesses in Ger- a random basis. The sampling frame was the many is proportionally smaller than the number “ Fi r m e n d a t e n b a n k D e u t s c h l a n d ” ( c o m p a n y of small and medium-sized enterprises, the sam- database Germany) of Hoppenstedt informati- ples were taken to reflect this difference: com- on ser vice. This director y lists the most impor- panies with a minimum of 250 staff and an annu- tant companies from one million Euros turnover al turnover of at least 50 million Euros were con- and with at least 20 staff upwards. The 225,000 s i d e r e d a b o v e a v e r a g e. T h i s d i s p r o p o r t i o n a l businesses of the database in question repre- approach makes it possible to evaluate large sent approximately eighty per cent of German Fig. 1: Businesses per number of staff, annual turnover, and sector of industr y in Germany Structural Data Businesses in Germany Number of employees Annual turnover in millions Sector of industr y 25,9 26,4 33,5 36,7 62,4 6,4 64,1 14,7 3,9 4,5 7,2 10,6 < 50 staff < 10 Mio. Euro annual turnover Ser vices > 50 – 499 staff > 10 up to 50 Mio. Euro annual Manufacturing sector > 500 staff turnover Construction sector > 50 Mio. Euro annual turnover Other 0,2 no statement © CCCD 2007 3,7 no statement Wholesalers Retailers In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany
  • 12. 12 Structural Data US Businesses Number of employees Annual turnover in millions Sector of industr y 13 26,4 21 28,3 13,1 28 59 17 57 12,6 10,5 9,2 < 50 staff < 10 Mio. $ annual turnover Ser vices > 50 – 499 staff > 10 bis 50 Mio. $ annual turnover Manufacturing sector > 500 staff > 50 Mio. $ annual turnover Construction sector 2,0 no statement 3,0 no statement Other © CCCD 2007 Wholesalers Retailers In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany Fig. 2: Businesses per number of employees, annual turnover, and sector of industr y in the USA real net output, meaning it is ver y comprehen- part of the sur vey process, 58,3 per cent of sive, so the results gained from it can by and attempted inter views had to be counted as large be applied to the all private businesses systematic failures: 29,7 per cent refused to in Germany. take part, in 28,6 per cent of the cases the tar- get person could not be interviewed in the requi- As far as the evaluation of the American sur vey site time. The coverage rate of the sample was “The State of Corporate Citizenship in the US ” 41,7 per cent. This coverage rate would be con- (2005) is concerned, there are 1189 comple- sidered fairly good in telephone poll terms, and ted polls of companies but, for evaluation pur- is significantly above the success rate of writ- poses, it is important to bear in mind that the ten sur veys. Altogether, we obtained comple- authors of the American study have a different ted inter views from 501 companies. approach to the Germans in the way they defi- ne company size. The definition for small com- There is no consensus to date about a standard panies is 99 staff, medium companies up to German translation of the Anglo-American term 999 staff, and large companies over 1000 staff. “corporate citizenship” which is why the English In addition, the sales figures for the US com- term appears to be becoming the usual word panies are given in US Dollars rather than in used in politics, business, and academia. Despi- Euros. te this, it cannot be assumed that ever yone inter viewed is familiar with the term. That is why In Germany, board members or members of in the sur vey, the term (voluntar y) corporate corporate PR departments were inter viewed. As community commitment was used.
  • 13. 13 Given this background, a comprehensive intro- für Mittelstandsforschung Bonn (Bonn Institute duction was used to assess whether a compa- for Medium-sized Enterprise Research), for rea- ny had any involvement at all in the communi- sons of better legibility of results, a distinction ty: on the one hand, initially, corporate citizen- is made between 5 : ship was defined as “all measures and activi- ties the company in question employs to affect its social environment, thereby voluntarily assu- small businesses with up to 49 staff or less ming social responsibility ”. On the other hand, than 10 million Euros annual turnover, the issue of whether a company shows active public commitment was analysed with the help medium-sized businesses with between 40 of a list of possible types of public commitment; and a maximum of 499 staff or an annual in other words, it was defined by way of con- turnover of between 10 million to below 50 crete activities. million Euros, Following the EU threshold values of 1st Janua- large businesses with a minimum of 500 staff r y 2005, as well as the definition of the Institut or 50 million Euros annual turnover 3 The term Corporate Citizenship can be incorporated into a comprehensive debate on Corporate Social Responsibility (CSR) with the two terms overlapping slightly even in literature. CSF also comprises improvements in staff working conditions, whereas Corpo- rate Citizenship focuses more on the socio-political dimension linked with community commitment by companies. Even terms such as Corporate Responsibility, sustainability or triple bottom line are not truly helpful in drawing the dividing lines; the interna- tional debate continues to rage. Compare Bradley Googins, Corporate Citizenship: Lost in Translation, CCC News 07, June, www.bcccc.net. 4 The following types of commitment were included: Cash donations, gifts in kind, free of charge provision of ser vices, free of charge permission to use company facilities, equipment or premises, releasing staff members for community activities, support for staff volunteering, cooperation with non-profit organisations, organisation of fundraisers and charity collections, establishment/fun- ding of a foundation, miscellaneous (an open categor y).The list of commitment types carefully excludes the instrument of sponso- ring, as this is seen as a strategic tool for image promotion, i.e. business practice, based on a contractual obligation the reci- pient of sponsoring has to fulfil in return. 5 This organisation differs from the EU definition concerning distinctions between medium and large-sized enterprises to the extent that the large business categor y is defined as having 500 and not 250 staff. This corresponds to the rule adopted by the Bonn Institute for Medium and Large Enterprise Research. Both approaches use 50 million Euros annual turnover as the yardstick defining a large business.
  • 14. 14 V. Empirical Findings from the German Survey and Transatlantic Comparison of Selected Issues An unequivocal “ Yes” to Corporate Retail companies appear to consider corpora- Citizenship te citizenship as particularly important. The fact that ever y one of the companies polled is inve- The findings show that 96 per cent, or virtually sting in its social environment, is probably due all the German businesses sur veyed, participa- to the fact that, unlike wholesalers for instance, te actively in some form of corporate citizen- retailers are typically in direct contact with their ship. Among businesses with at least 500 staff end consumers. Social commitment could con- participation is 100%. Even the commitment tribute to improved customer contact through level of small and medium-sized enterprises, the targeted measures tying the consumer to the predominant size of businesses in Germany ’s company. corporate landscape, is on a markedly high level. Fig. 3: Committed businesses, broken down into number of staff and sector of industr y Businesses with Corporate Citizenship total 95,6 staff up to 49 95,2 50 to 499 95,8 500 and more 100 sector Manufacturing Sector 97,0 Construction Sector 97,3 Wholesalers 97,2 Retailers 100 Ser vices 93,4 Other 96,2 © CCCD 2007 In percentage ter ms 50 100 Source: Opinion poll on corporate citizenship of companies in Germany
  • 15. 15 Types and Tools Corporate Giving 91,0 among others Cash donations 83,4 Donations in kind 59,7 Organise fundraisers and collections 19,7 Establishment and maintenance 3,8 of foundations Corporate Volunteering 60,5 among others Support for corporate volunteering 47,9 Release of staff for Corporate 32,3 Citizenship Ser vices free of charge 54,1 among others Provision of ser vices 41,3 Permission to use company facilities, 31,4 equipment, or rooms Cooperation with non-profit par tners 47,0 Other types of commitment 2,6 © CCCD 2007 50 100 In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany Fig. 4: Types and tools of corporate citizenship Types of Corporate Citizenship by comparison, despite the current nationwide Corporate Giving – referring to donations of boom in new foundations, including corporate money and in kind – is the preferred type of foundations. corporate citizenship. Virtually ever y company showing social commitment uses this traditio- A modern form of donation has also evolved; nal type of commitment to support the com- with managerial staff and executives donating mon good. Cash donations are the most fre- time and know-how, commonly grouped under quent form, the type of commitment used by the buzzword corporate volunteering. The cor- 83 per cent of companies. Three out of five porate volunteering tool, which the survey revea- respondent undertakings make donations in kind led is being used in significantly more than half or give products or goods to organisations or the companies analysed, can be employed in individuals. In addition to which, one business different ways. At least two aspects play a role: in five organises fundraisers or collections for the first covering support for those employees, charitable purposes. Instances of companies who are already engaged in society at large choosing to set up foundations are quite rare outside working hours. Forty-eight per cent of
  • 16. 16 businesses support such types of civic involve- Deploying Companies’ Material and Human ment. The second aspect goes beyond accep- Resources for Corporate Volunteering ting private staff engagement in the company by allotting working hours to this external civic A nuanced analysis of those businesses (48 per engagement. Among the respondent compa- cent) which state they promote community com- nies, 32 per cent release their employees for mitment by their staff, concluded as follows: such activities, putting in time with the volunta- r y fire brigade for example. Releasing employe- Eighty-one per cent of these businesses allow es for civic involvement can also mean using the staff to use business resources (i.e. PC, such people for selected projects of a non-pro- copier, company phone, company car) for fit type. What comes to mind are one-off acti- their civic involvement. vities by all members of the staff, or individual departments (so-called activity days, e.g. a Seventy-eight per cent of these businesses manual work day), or sitting in on classes or allow their staff to engage in civic involve- courses for several days, or a longer-term len- ment during working hours. ding of staff to ser ve charities in a managerial function. In addition to a company providing mate- rial and human resources for civic engage- Entrepreneurial resources of a different kind, ment, one in four of these businesses also involving neither cash nor people, can also be makes money available, by supplementing used, as is shown by at least 54 per cent of cash donations made by members of the businesses which make such corporate resour- staff (matching funds). ces as ser vices (41 per cent) or infrastructure (e.g. premises and equipment) available to soci- Less than one in ten (9 per cent) of this group al concerns free of charge (31 per cent). of companies actively encourages employe- es to engage in civic involvement in certain Moreover, the companies sur veyed frequently projects and areas. opt for corporate citizenship in conjunction with non-profit partners. Cooperation with charita- ble organisations is practised by 47 per cent of the businesses in the sur vey. As a rule, such a partnership with a non-profit organisation tack- les projects aimed at resolving social problems, bundling corporate resources and non-profit know-how, which are then used jointly to achie- ve a specific objective.
  • 17. 17 Preferred areas for Corporate Citizenship The foremost benefactor of Corporate Volun- teering is the area of “ neighbourhood and In choosing areas for commitment, the busines- community ”, followed by “sports and leisu- ses involved concentrate largely on “sports and re time” and “social affairs” leisure time”, primarily through funding sports and leisure time clubs. Other areas of commit- The ranking of subject areas for cooperati- ment, namely “education and training” also play on with non-profit partner organisations is a role, as do “ neighbourhood and communi- led by the sector “social affairs”, with “sports ty ”, or “social affairs”, which are also important and leisure time” in second place, followed for many of the companies participating in the by “education and training”. sur vey. Adopting different policies, companies commit in a variety of ways. All in all, companies presumably prefer those areas which can contribute to creating an If cash or donations in kind are involved, the attractive environment for their business loca- most frequently quoted recipient is the sports tion. There appears to be a clear focus on crea- and leisure time sector. The available data ting a well-functioning public life with a working does not, however, allow conclusions to be infrastructure, promoting the education of the drawn concerning the scale of support given local people and mitigating social problems in to this or other areas of involvement. the vicinity. Fig. 5: Cooperation between businesses committed to the community and other organisations and institutions Cooperation with a Par tner with partner without partner 41,1 58,9 © CCCD 2007 In percentage terms Source: Opinion poll on corporate citizenship of companies in Germany
  • 18. 18 Involving par tners in Corporate Citizen- social networks to resolve a specific task in a ship sustainable way. Corporate citizenship often occurs in the form The majority of the companies involved (59 per of cooperation with other organisations and insti- cent) operate their corporate citizenship acti- tutions. This frequently has the advantage of vities in conjunction with at least one partner, providing a local partner for concrete corpo- not necessarily a non-profit organisation. rate citizenship projects who is familiar with the partnership between a company and a local Whether or not a partnership is sought with pressure group, a kindergarten, a charitable another organisation varies according to com- organisation, or part of a local administration. pany size. Three out of four medium-sized enter- prises, and four out of five large companies, In such cases, businesses support the work of declared having entered into partnerships for the external partner by using resources such as their corporate citizenship activities, while smal- cash, gifts in kind or human resources, while the ler companies only rarely cooperate with a partner provides know-how, competence, and partner. Fig. 6: Partner specification Par tner Specification Local volunteer organisations (e.g. sports clubs) 41 Nurser y schools, schools, hospitals, etc. 25 Charitable organisations 22 Local authorities 21 Other businesses 13 Employers’ Organisations, Confederations of Industr y 12 Churches 12 International Aid Organisations 11 Lobby groups 11 Government at county and regional level 6 Political parties 4 Trade Unions 2 Other partners 5 © CCCD 2007 25 50 In percentage ter ms Source: Opinion poll on corporate citizenship of companies in Germany
  • 19. 19 Approximately half the smaller businesses enga- nisations as clubs, projects, and initiatives. ge in the community without having a coope- ration partner. The presumed reason is that small On the following ranks are public institutions companies often show their social commitment such as education facilities and hospitals (25 by donating smaller amounts and adopting per cent), national charitable organisations (22 measures which do not need the support of an per cent), international aid organisations and external partner. Broken down into sectors, only lobby groups (11 per cent each) as well as chur- retail companies stand out by having at least ches (12 per cent) are found. one partner in seventy-one per cent of their commitment, all the others are the average On the other hand, businesses turn increasing- level. ly to governmental and political bodies: at least 21 percent cooperate with local authority In principle, partners are not essential for cor- departments, 6 per cent with borough or regio- porate citizenship; after all, 41 per cent of busi- nal governments and 4 per cent with political nesses have so far dispensed with this type of parties. cooperation. Still, it could be argued that irre- spective of company size, this implies a loss of In this context, cooperation with industr y play- benefit from valuable experience, together with ers, specifically other businesses (13 per cent), possible efficiency increases for corporate citi- or employer organisations or trade unions enjoy zenship. relatively high popularity (12 per cent). Scrutinising the partners of companies with The variety of different cooperation partners community commitment in greater detail indicates that a considerable number of busi- shows that local organisations such as clubs nesses actively collaborate with representatives a n d l o c a l i n i t i a t i v e s c o m e f i r s t. A m o n g t h e from the three sectors: state, market and, espe- undertakings cooperating with a partner, 41 cially, the tertiar y sector, when implementing per cent work with such types of voluntar y orga- corporate citizenship.
  • 20. 20 Corporate Citizenship with a clear local mitment of almost one in ten small companies Emphasis exceeds the regional sphere. The great importance given to local volunteer The range covered by individual corporate citi- associations as cooperation partners, indicates zenship measures therefore hinges on the con- that corporate citizenship concentrates predo- text in which the business concerned operates. minantly on a company ’s immediate vicinity. Companies with a geographically limited mar- ke t a n d s u p p l i e r s, s t a f f, c u s t o m e r s e t c. , a l l Among the committed companies, three quar- coming from the immediate neighbourhood, ters state they operate within their region and also tend to limit their engagement to this area. in the local environment around their sites. By Assuming that large companies tend to opera- contrast, companies rarely become involved in te on a national and global scale, the data sug- a national (15 per cent) or international con- gest a geographical overlap between the envi- text (14 per cent). Therefore, businesses tend to ronment in which a company conducts its busi- focus primarily on an intact environment for their ness, where it also focuses its social commit- company HQ, or their production site/s. Given ment. how important a functioning corporate environ- ment is for a successful business, this result does This assumption is supported by studying the not come as a surprise. extent of corporate citizenship efforts in indivi- dual sectors of industr y: primarily ser vice-cen- Higher staff levels and higher sales also mean tred businesses (17 per cent) and the proces- a geographical extension of corporate citizen- sing industr y (15 per cent) are running corpo- ship measures. At the same time, the kind of rate citizenship programmes with an internatio- corporate citizenship which reaches out to a nal focus. Whereas the commitment of retailers national or even international arena emerges deeply anchored in their local communities only as an activity not left exclusively to medium and rarely reach national (1 per cent) or even inter- large-sized enterprises. After all, the social com- national (5 per cent) level. Fig. 7: Range of corporate citizenship Range of Corporate Citizenship total ▲ ▲ ▲ Local/ regional, in the vicinity of the business HQ 73,8 79,5 64,4 57,9 Local/ regional, in the vicinity of business sites 24,3 17,8 32,5 57,9 National 14,5 11,4 19,4 26,3 © CCCD 2007 International 13,6 8,4 22,0 21,1 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany
  • 21. 21 Amount in Euros for 2005 total ▲ ▲ ▲ Up to 5,000 max 29,1 37,9 15,6 5,3 From 5,000 to 10,000 max 17,2 19,5 13,8 10,5 From 10,000 to 50,000 max 30,5 28,9 36,3 10,5 From 50,000 to 100,000 max 5,2 4,0 6,9 10,5 100,000 plus 6,5 1,7 12,5 31,6 © CCCD 2007 no statement/don’t know 11,5 8,1 15,0 31,6 In percentage terms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany Fig. 8: Corporate citizenship expenditure in 2005 Investment in Corporate Citizenship and cost intensive corporate citizenship mea- sures remain the province of big business. Invest- Adding up the costs involved or investment ments exceeding one million Euros are compa- required for corporate citizenship measures, ratively rare. including project and HR costs, donations and PR expenses, yields a ver y diverse picture. In this context, it is extraordinar y how many busi- nesses did not answer this question or claimed In 2005, 38 per cent of the companies with up not to know the amount spent on corporate citi- to 49 employees spent less than 5,000 Euros on zenship measures, because the overriding majo- corporate citizenship. By contrast, 32 per cent rity of those which did not provide information of companies with 500 or more staff invest more about the financial cost of their commitment than 100,000 Euros in this field. are large companies (5 per cent “ no answer ”, 26 per cent “don’t know ”). The fact that a majo- Adding these figures up shows that three quar- rity of these proved unable even to estimate ters of businesses spend below 50,000 Euros. the amounts involved either points to insuffi- Small companies in particular, but even medi- cient controlling of their civic engagement or u m - s i z e d o n e s t o o, v e r y r a r e l y e x c e e d t h e indicates few such funds are available within 50,000 Euro limit. Thus far-reaching, large-scale, the company in question.
  • 22. 22 Corporate and Community Objectives there are discrepancies, occasionally ver y large at the Focus of Commitment ones, between big business and other underta- kings. Large companies assess virtually ever y one of the objectives as more important than The central issue for committed companies is s m a l l a n d m e d i u m - s i z e d o p e r a t i o n s d o. T h e an awareness of corporate citizenship and obvious conclusion is that the concept of cor- efforts to create a “healthy ” environment around porate citizenship, an Anglo-American import commercial or production sites. Just about half after all, is recognised more clearly by large of businesses involved consider these objecti- German companies because their manage- ves important or ver y important. This means that ment is more familiar with corporate citizenship unequivocally society-related objectives are at and its terminology in terms of socio-political the focus of the corporate citizenship efforts of issues. businesses, whereas strategic considerations relating to the economic success of the com- As shown in figure 9, a proportionally larger num- pany play a less important role. ber of respondents rate society-related objec- tives highly for their business: 95 per cent cite Yet there are also striking differences in how the applied social responsibility as important; 74 different categories of businesses, depending per cent consider maintaining and improving on their size, assess these objectives. After all, the local environment around the company site Fig. 9: Corporate citizenship objectives – top two findings (critical and high importance) Objectives total ▲ ▲ ▲ Being aware of social responsibility 58,1 51,5 66,7 94,5 Maintaining and improving the environment 49,1 46,3 52,2 73,7 at business HQ/sites Improving own competitive position 24,1 24,9 22,7 21,1 Investing in society as a prerequisite for 22,5 20,5 23,8 47,3 corporate economic success Promoting corporate volunteering 22,4 22,5 22,2 16,7 Allowing society to participate in business suc- 22,1 17,8 28,9 27,8 cess Communicating on a political level with lobbies 19,9 17,5 23,3 31,6 and committed citizens. © CCCD 2007 Improving the bottom line 11,9 12,9 8,7 20,0 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale from 1 = critical, up to 5 = no impor tance Source: Opinion poll on corporate citizenship of companies in Germany
  • 23. 23 Comparing Corporate Citizenship Objectives in Germany/the US Importance of objective corporate citizenship engage- ...improving conditi- ...supporting ...responding to ment within the business com- ons in your communi- employee volunteer- community/ interest munity ty ism groups regarding issu- es they care about How about... D 18,0 26,0 37,0 Not at all important USA 0,7 7,1 6,3 D 8,0 22,0 22,0 Somewhat important USA 9,5 22,7 26,5 D 25,0 29,0 21,0 Important USA 34,5 39,6 41,8 D 37,0 20,0 15,0 Ver y Important USA 45,3 25,5 21,8 D 12,0 2,0 5,0 Critical USA 9,6 4,3 3,4 D 0,0 0,0 0,0 don’t know USA 0,0 0,0 0,0 D 478 478 478 © CCCD 2007 Total USA 1158* 1158* 1158* In percentage terms *no statement 0,4 *no statement 0,9 *no statement 0,3 Source: Opinion poll on corporate citizenship of companies in Germany Fig. 10: Comparing corporate citizenship objectives in Germany/the US to be important, and 47 per cent believe cor- pursued in a diffuse way becomes even more porate citizenship a prerequisite for economic clear when we relate this to comparable results success. from the 2005 sur vey “The State of corporate citizenship in the US ”. Data is available for three This is a relatively high result. But at the same of the objectives cited in illustration no. 9. Com- time it is clear that market and customer-rela- paring the top two results of US businesses with ted objectives are not the main focus, becau- those of German businesses on the issue of se only 20 per cent of companies relate their “ maintaining and improving the environment public involvement to improvements in the bot- around a business or production location”, shows tom line. that businesses on both sides of the Atlantic rate this question equally highly in relative terms The picture which emerges of objectives being (US 55 per cent, Germany 49 per cent). Strikin-
  • 24. 24 gly different is the fact that 18 per cent of Ger- engagement ”. In Germany 22 per cent rate this man businesses but only 0,7 per cent of Ame- objective highly and in the US the figure is 30 rican businesses state this objective bears no per cent rate. It is hardly surprising that this so- relation to their own corporate citizenship acti- called “corporate volunteering” is not yet wide- vities. ly known in Germany, what is surprising is the fact that 26 per cent of German companies, There is a similar result for “Political communi- as opposed to just 7 per cent of US companies, cation with lobby groups and engaged citizens”. consider this issue to be of no importance wha- Here again, there is not much difference bet- tever. ween the top two results (US 25 per cent, Ger- many 20 per cent). And a striking feature in this Obviously, German companies still have diffi- context is the number of German businesses culties in consistently determining the objecti- which do not assess communication with sta- ves linked to their corporate citizenship activi- keholders having any importance (Germany 37 ties. Their perception of social responsibility alt- per cent, US 6,3 per cent). hough highly rated, does not yet follow a stra- t e g y o f c o r p o r a t e a n d c o m m u n i t y- f o c u s e d The same differences come up in the third area engagement together with a corresponding o f c o m p a r i s o n “ Pr o m o t i o n o f s t a f f v o l u n t e e r communication concept.
  • 25. 25 Happening by Chance or Business Stra- nesses as a whole tend to shape their involve- tegy Planning of Corporate Citizenship ment in a reactive way. The majority of respon- dent businesses only become involved in the Measures community when appropriate charitable or soci- al concerns are suggested from outside. The- Corporate Culture as Orientation refore, only a minority of 38 per cent is active- In more than three quarters of all cases corpo- ly looking for a way to show societal steward- rate citizenship is part of the way a company ship and invest in the common weal with con- sees and defines itself. Just as many busines- cepts and projects initiated in-house. Having ses take care to ensure that any outside sug- corporate citizenship deeply anchored in cor- gestions for involvement in issues fit the busi- porate culture, while at the same time having ness, and that the business model plays a vital a more reactive approach to it, reveals a discre- role in determining the planning and implemen- pancy which does not match the clear strate- tation of societal stewardship activities, corpo- gic positioning of the idea of corporate citizen- rate citizenship in most German businesses can ship in the company. But here again, compa- be counted an integral part of the corporate ny size plays a role which should not be over- culture. looked: the larger a business, the more strate- gic and active the planning and implementa- At the same time, the data suggest that busi- tion processes for corporate citizenship appe- Fig. 11: Strategic anchoring of corporate citizenship measures Strategic Approach to Corporate Citizenship Corporate citizenship is part of our self-image and we total ▲ ▲ ▲ provide money, working hours, gifts in kind especially 78,2 78,5 76,7 84,2 for this. We take care that any request is fitting for our compa- ny. 77,2 75,2 78,6 75,2 We follow our company model in planning and imple- menting our social involvement. 68,5 64,1 74,4 84,2 We are, ourselves, actively looking for ways to com- mit. 37,5 33,3 42,1 63,2 Our community commitment follows clear, measura- ble targets. 31,5 33,2 27,7 31,6 There is a predetermined action plan for our commu- nity commitment. 12,9 11,4 14,5 21,1 We have evaluation tools for our commitment measu- 13,1 9,4 26,3 © CCCD 2007 12,3 res. In percentage terms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany
  • 26. 26 ar to be. Another finding also comes into play Corporate Citizenship no PR-tool in this context – large enterprises tend to put greater emphasis on evaluation, i.e. employ- Among engaged businesses it is the large com- ing tools to evaluate corporate citizenship mea- panies with large turnovers in particular (89 per sures. cent) which make their corporate citizenship engagement clear to the public. Usually, this is done via press notices and press reports (79 per Responsibility for Corporate Citizenship in the cent of large companies), via the company Company homepage (58 per cent) or via customer maga- zines (32 per cent), all of which provide written Responsibility for societal stewardship rests pri- information about corporate citizenship. In addi- marily with company executives. In larger busi- tion, all sorts of events are used to draw people’s nesses, management and organisation of cor- attention to this engagement. Also, 21 per cent porate citizenship measures are also delega- of companies with high staff levels mention their ted to more than one person. As a rule, the cor- corporate citizenship activities in their annual porate citizenship theme is then part of the reports. Fig. 12: Responsibilities for corporate citizenship within the business Responsibilities total ▲ ▲ ▲ Owner/manager 90,2 93,6 86,9 65,0 Board 7,7 5,0 11,3 21,1 Press/PR department 6,9 3,7 10,0 31,6 No particular responsibility/ever yone is responsi- 1,9 0,7 3,8 5,3 ble Cross-sectional unit from different departments 1,9 0,7 3,1 10,5 Specially established department/body for cor- 1,5 0,7 2,5 5,3 porate citizenship © CCCD 2007 Other departments/staff 6,9 5,0 8,8 21,1 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Source: Opinion poll on corporate citizenship of companies in Germany responsibility of both the press and PR depart- A mere 16 per cent of large-sized enterprises ments, as well as being addressed as a cross- use their image as corporate citizens in active sectional task by a variety of other concerned self-promotion in the print and electronic media. areas. But it is rare to find a dedicated depart- This means that only a tiny group of companies ment for corporate citizenship established wit- tie their community commitment in with promo- hin the company; though where such depart- ting their marketing and sales activities. The fact ments do exist, they are not exclusively the pro- the German public might take a rather scepti- vince of large-scale businesses. cal view of a link between civic engagement
  • 27. 27 and business self-interest, may explain this atti- as a PR tool. Unlike large companies, SMEs do tude. Companies have no wish to expose them- expend much effort on publicising their com- selves to complaints of having abused corpo- munity commitment. Half the small businesses rate citizenship as a PR tool, which might put and 43 per cent of medium-sized enterprises their credibility at risk. It seems equally likely, even state they do not report their activities in though, that companies simply do not expect the community at all. The motto “do good and sufficient benefit from extensive communicati- talk about it ” therefore seems to apply much on of corporate citizenship activities. more to large-sized companies. They use diffe- rent ways in which to communicate their civic For small and medium-sized businesses corpo- engagement and tr y to publicise this in a cre- rate citizenship hardly appears to matter at all dible and responsible manner.
  • 28. 28 Socio-political Attitudes of Companies porate citizenship than is perceived by the with Regard to Corporate Citizenship public. Among the companies inter viewed in the US, 92 per cent agree with this statement. In Germany, the view is held predominantly by The sur vey “The State of corporate citizenship small and medium-sized companies, (83 per i n t h e U. S. ” h a s p r o v i d e d c o m p a r a t i v e d a t a cent each), in other words, by those which do regarding the complex issue-related attitudes least to publicise their civic engagement, whe- which companies have vis-à-vis corporate citi- reas in the US, mainly large businesses subscri- zenship, the effect of factors with both positive be to this opinion (98 per cent). and negative influence, as well as a selection of core areas for corporate citizenship. In Ger- Similar views are expressed by German and many, just 83 per cent of companies sur veyed American businesses when asked whether cor- assumed that many companies have more cor- porate citizenship should be regulated by the Fig. 13: Comparative findings of socio-political attitudes, Top two findings (fully agree, agree) Attitudes total ▲ ▲ ▲ D 82,8 83,0 83,2 73,6 Many companies do a great deal more for their communities than is talked about or known USA 92 91 90 98 D 80,5 80,4 81,5 73,7 Corporate citizenship should be completely voluntar y - no laws / regulations should govern it USA 80 81 78 75 D 66,2 64,1 69,2 66,7 Many companies promote corporate citizenship, but are not truly committed to it USA 47 49 48 42 D 60,6 61,6 57,7 66,7 Corporate citizenship needs to be a priority for companies USA 81 77 87 98 D 46,1 41,5 52,9 63,1 The public has a right to expect good corporate citizenship from companies USA 69 66 69 91 D 40,4 40,7 40,1 42,1 Corporate citizenship makes a tangible contribution to business' bottom line USA 64 61 65 84 © CCCD 2007 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale: from 1 = agree completely, to 5 = do not agree at all Source: Opinion poll on corporate citizenship of companies in Germany
  • 29. 29 state. On this, there is agreement across the German companies are far more self-critical border: 81 per cent of German and 80 per cent and therefore also fairly realistic when asses- of American companies reject this. In Germa- sing how well they implement corporate citizen- ny, though, this opposition is clearly more pro- ship in practice. 66 per cent of German respon- nounced (68 per cent of German businesses dents are of the opinion that civic engagement reject this totally compared to 40 per cent of may well be highly rated within the company, US businesses). This has to be considered against but is not implemented sufficiently well. 67 per the backdrop of histor y, where in Germany there cent of large-scale businesses agreed with that. is already an institutional system which has evol- I n t h e U S, o n l y 4 7 p e r c e n t o f r e s p o n d e n t s v e d o v e r t i m e, t h e s o c i a l m a r ke t e c o n o m y, agreed. which institutionally integrates businesses into society at large; e.g. the dual vocational trai- The huge gap which exists in both countries con- ning system, sustainability strategies, or clima- cerning their assessment of a tangible contri- te protection programmes. Still, businesses are bution of corporate citizenship to business suc- interested in being independent in selecting cess is remarkable. The American response is a whether and which type of corporate citizen- good 63 per cent, clearly above the German ship practices to choose, and to use their resour- response by 23 per cent. Irrespective of com- ces freely without restrictions imposed by the pany size, only about 40 percent of German state. In both countries, it is above all the small businesses admitted to deriving a positive busi- and medium-sized enterprises which are the ness effect from corporate citizenship, where- ones to reject state inter vention. In principle, as in the US, the response differs more clearly the type and scale of corporate citizenship is according to company size. 84 per cent of Ame- something they believe should be decided on rican large-scale businesses give a positive ans- a voluntar y basis. wer. This last comparison in particular shows how different companies see and define themsel- As far as questions of attitude are concerned, ves in this respect, which is the key point for cor- clear distinctions can be made between Ger- porate citizenship on both sides of the Atlantic. man and American companies, indicating how deeply anchored corporate citizenship is in the Positive Reinforcement Factors for Corpora- way American companies see themselves as te Citizenship coming from the tradition of “ welfare capita- lism”. The postulated statement that society has When asked which factors reinforce corporate a right to expect companies to be societal ste- citizenship, a similar picture emerges, indica- wards meets with the full or partial approval of ting that corporate citizenship is anchored to a 69 per cent of American businesses sur veyed, different extent in the two countries’ businesses. with large-scale enterprises by far the ones most in favour. Only 46 per cent of German busines- Here again, there are clear differences between ses share this view but here, too, 63 per cent Germany and the US, regarding the attitudes of of large-scale companies are in favour; putting small and medium-sized enterprises as well as them clearly above the average. Just about 61 large businesses. On average, 62 per cent of per cent of the German companies asked con- all German companies agree that corporate sider societal stewardship a corporate priority, citizenship fits in well with the tradition and the while in the US this amounts to as much as 81 values of the company, but for large-scale busi- per cent. nesses the figure is 83 per cent. About 73 per
  • 30. 30 Factors of Positive Reinforcement of Corporate Citizenship total ▲ ▲ ▲ Internal factors D 61,8 60,1 62,9 83,3 It fits our company traditions and values USA 73 68 79 91 D 49,6 45,8 54,4 73,7 It improves our reputation/image USA 56 54 57 76 D 30,1 30,8 28,3 36,9 It is part of our business strategy USA 44 41 45 64 D 14,7 12,4 14,0 50,0 It helps to recruit and retain employees USA 30 25 34 55 External factors D 38,3 36,7 38,2 70,0 It is expected in our community USA 24 20 24 50 D 24,2 21,1 28,3 36,8 It is important to our customers/consumers USA 36 33 36 53 D 3,1 3,7 1,2 5,3 It responds to laws and political pressures USA 14 14 12 18 © CCCD 2007 In percentage ter ms ▲ Small enterprises ▲ Medium-sized enterprises ▲ Large-scale enterprises Scale from 1 = ver y strong positive reinforcement effect, to 5 = no positive reinforcement effect at all Source: Opinion poll on corporate citizenship of companies in Germany Fig. 14: Comparative findings of factors with positive reinforcement on corporate citizenship in Germany/USA Top two findings (ver y strong positive reinforcement effect, strong positive reinforcement effect) cent of the American companies in the sur vey, are an important factor for one German busi- and 91 per cent of large businesses, confirm ness out of two, with three quarters of large- this reinforcing effect. scale business respondents making this clear. In the US too, image matters to 56 per cent of With regard to the second most important moti- all companies, in particular to 76 per cent of vation for corporate citizenship, image impro- large businesses. vement, we notice similar differences concer- ning company size in Germany and the US. On A major difference between American and Ger- average, opportunities for image improvement man companies emerges when asking whether