Chapter 10 - Civil Society and Business Ethics

What are the three sectors in society?

• State sector: Government

• Market sector: Business

• Civil society sector: NGOs, unions, charities, pressure groups, etc.

What are civil society organizations?

Groups that are not government or business, such as NGOs, pressure groups, charities, religious groups, and other actors that promote specific interests, causes, or goals.

What dimensions show how diverse CSOs can be?

CSOs vary by:

• Scope (individual → global)

• Type (community groups, research orgs, unions, religious groups, business associations)

• Structure (informal, formal, co-operative, professional, entrepreneurial, networks)

• Activities (research, information, campaigning, protests, boycotts)

• Focus (environment, social issues, development, poverty, human rights, animal welfare)

Why are CSOs considered highly diverse?

Because they differ widely in what they do, how they’re organized, what issues they target, how big they are, and what type of group they are — from small grassroots collectives to large global NGOs.

Why are civil society organizations important stakeholders?

CSOs have grown massively in number, power, and influence.
They now shape public debates and government policies on corporate behaviour.

What kind of stake do CSOs hold?

Their stake is indirect and representative:

• Represent interests of individual stakeholders

• Represent interests of non-human stakeholders (e.g., environment, animals)

What is a “social licence to operate”?

• The ongoing approval and acceptance of a company’s activities by society—especially local communities and civil society.

• CSOs help shape whether a firm is seen as having this continuing social approval.

How do CSOs “self-declare” themselves as stakeholders?

CSOs often position themselves as stakeholders by:

• Issuing public statements

• Launching campaigns

• Taking action toward a corporation
  But self-declaring does not guarantee recognition from the company.

Why is ignoring CSOs risky for companies?

Because dismissing CSOs can create serious long-term consequences, including reputational damage, public pressure, loss of social licence, and escalating conflict.

What is indirect CSO action?

Actions taken without direct confrontation, often through information campaigns.
Sometimes criticized for being misleading or biased.

What is violent direct action?

• Involves violence or illegal acts

• Generates the most publicity

• Raises the question: is it still “civil” society action?

What is non-violent direct action?

Includes:

• Demonstrations & marches

• Protests

• Boycotts

• Occupations

• Non-violent sabotage/disruption

• Stunts

• Picketing

What is a boycott?

• A tactic where people are urged not to buy certain products in order to achieve a specific goal.

• It is the most common CSO tactic.

What are the four purposes of boycotts?

• Instrumental: force a policy change

• Catalytic: raise awareness

• Expressive: communicate displeasure / want to be heard

• Punitive: punish the company by causing harm

What is business involvement in charity and community action?

A starting point for how companies engage with civil society. It is mostly one-way support: communities receive benefits, but have little voice in shaping corporate behaviour

What types of community involvement do businesses use?

1. Corporate foundations → channel philanthropy

2. Employee volunteering, which aims to:

• Make meaningful social contributions

• Develop employee skills

• Enhance corporate reputation

• Boost employee morale

• Build social capital in the community

What are closer business–CSO relations?

These are social partnerships—more interactive, collaborative relationships between corporations and civil society organizations to address social issues.

What are the limitations of business–CSO collaborations?

• Cultural differences make relationships hard to manage

• Hard to maintain consistency and commitment

• Partnerships may hide hostility or power imbalances

• Example: big companies partnering with CSOs (e.g., Coca-Cola, Google, Microsoft) to address issues like modern slavery

Why are CSO–business alliances increasing, and what is venture philanthropy?

• More CSOs are partnering with businesses to use market-based solutions for social problems.

• Venture philanthropy (philanthrocapitalism): applying venture capital methods (strategy, metrics, investment discipline) to charitable grant-making.

What is a social enterprise?

An organization built (since the 1990s) to solve social problems from the start, blending:

• Social goals, and

• Economic/market goals
  in its core design and operations.

How do the aims and profit roles differ across social enterprises, CSOs, and corporations?

• Social enterprise: Social + economic value; earns profit but limits distribution

• CSO: Social value only; nonprofit

• Corporation: Economic value; profit-maximizing

How do activities and funding differ across the three types of organizations?

Activities:

• Social enterprise: Produces/trades social goods & services

• CSO: Social goods/services + campaigning, advocacy, research, grant-giving

• Corporation: Produces/trades goods & services

Funding:

• Social enterprise: Self-funding (at least partly)

• CSO: Grants, donations, membership dues

• Corporation: Self-funding (sales, investment)

How does governance differ across social enterprises, CSOs, and corporations?

• Social enterprise: Participatory & democratic among stakeholders

• CSO: Participatory & democratic among stakeholders

• Corporation: Accountable to providers of capital (shareholders)

What problems can threaten a social enterprise’s mission and legitimacy?

• Mission compromise: Market pressures can cause mission drift.

• Moral legitimacy loss: Acting too much like a business can weaken trust from key stakeholders.

What operational risks do social enterprises face?

• Escalation of risk: Emphasis on innovation and risk-taking may endanger essential services or vulnerable clients.

• Market prioritization: Need for sustainable revenue pushes focus toward profitable social goods/services, neglecting unprofitable but more needy groups.