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 that promote specific interests, causes, or goals.

What dimensions show how diverse CSOs can be?

CSOs vary by:

• Scope (individual → global) (hoe big they are)

• Type 

• Structure 

• Activities

• Focus

Why are civil society organizations important stakeholders?

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

How do CSOs “self-declare” 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?

dismissing CSOs can create serious long-term consequences, including:

• reputational damage

• public pressure

• loss of social licence

• 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 different purposes of boycotts?

• Instrumental: aim to force a policy change

• Catalytic: aim to raise awareness

• Expressive: aim to communicate displeasure

• Punitive: seek to 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.

• One-way support – benefits communities but does not usually allow them much voice in shaping corporate action.

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—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

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

• it suggests an increased attention in the sector to use market-based solutions to address social problems

• Venture philanthropy is the application of venture capital techniques to grant making

What is a social enterprise?

An organization built to solve social problems from the start, blending:

• Social goals, and

• Economic/market goals

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 social enterprises, CSOs, and corporations?

• Social enterprise: Produces/trades social goods & services; self funding

• CSO: Social goods/services; Grants, donations, membership dues

• Corporation: Produces/trades goods & services; Self-funding

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

• Social enterprise and 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:
  Innovation + risk-taking can put core services or vulnerable clients in danger.

• Market prioritization:
  Chasing revenue pushes orgs toward profitable services, not the neediest clients.