¿Qué CSR, Señora?

By Amanda Coffin

Perhaps to the disappointment of some readers, the Global Latinas in the title of Lourdes Casanova’s newly-released book (INSEAD Press, 2009) include neither Mexican telenovela starlets nor Shakira, but rather a sampling of South American multinational companies.

Dr. Casanova asserts that most research on multinationals has focused on those from developed nations. What research has emerged on developing markets has looked primarily to Asian companies. Aiming to fill this void, she examines the unique challenges to building a global business in South America, and some of the correspondingly unique success stories.

The book’s first six chapters are tidily organized, well-annotated and readable. They address such issues as the obstacles that Latin American history and politics have thrown in the way of corporate development, and the creative means that various Latin entrepreneurs have used to circumvent them. She proffers several examples of firms that have successfully navigated the bumpy road to privatisation, a trend that has increased across the continent since the 1990s. Dr. Casanova’s case studies span a broad spectrum of geography and industries, including Cemex, the Mexican cement-manufacturing giant, and Concha y Toro, the firm that first brought Chilean wines to global tables.

Chapter 6 investigates relationships between South America and Asia, looking at trade in both directions. While acknowledging that North America and Europe are currently the most significant investors in and trading partners of South America, the author points out that Asia is poised for too much growth to be ignored. She discusses past and current Japanese investments in Latin American industry, as well as the struggles faced by those learning to do business with China. Ultimately, she encourages “competition and co-petition”, whereby countries on both sides of the Pacific can exchange knowledge as well as goods, learning from each others’ successes and stumbles along the way towards development.

The topic of CSR makes a late appearance in the book. Chapter 7, the final chapter, seems almost to have been an afterthought, as if an INSEAD Press editor had read the manuscript and asked, “What? Nothing about CSR?”

Dr. Casanova co-wrote Chapter 7 with an INSEAD Research Assistant, Anne Dumas. The unfortunate result is a disorganized tangle of opinion and data which too often contradicts itself. The chapter title, “From Global Latina to a Corporate Citizen: Are Poverty and Inequality Business Issues?” hints at the authors’ lack of clarity on the topic. In the absence of a clear definition of CSR and its goals, their discussion of how the global Latinas are (or aren’t) practising good corporate citizenship devolves into a rambling stream of anecdotes, leaving the reader disheartened, encouraged and confused in turns.

The authors begin with a claim that the generally accepted definition of CSR is deficient when applied to developing nations: “CSR has been shaped by the North and therefore reflects its [the North’s] specific characteristics and needs.” They complain,  “So far, labor conditions, human rights and sustainable development have been at the heart of CSR policies, while poverty alleviation has not been a high priority…” Poverty is, of course, crushing in Latin America, where even recent economic advances have left the majority far behind, and the book provides a grim parade of statistics to this effect.  One must ask, however, doesn’t the eradication of poverty fall into the category of human rights? Must we really discard this definition of CSR as a self-serving policy of the North?

The authors seem to think so, for the next section is “Corporate Social Responsibility: The Latin American Way.”  It opens with a definition of CSR from Marcello Linguitte of the Ethos Institute, a Brazilian advisory firm: “CSR is about the way a company manages its business so that it can become ‘co-responsible’ for social and sustainable development.”  If there is a difference between this and the “Northern” definition of CSR, it’s elusive, indeed. Linguitte’s definition says nothing specific about poverty reduction nor any other pointedly South American issue.

Moreover, whether or not the Global Latinas should be responsible for poverty alleviation (as asked in the chapter title) seems to be an open question. “CSR is high on their agenda for a variety of reasons,” Casanova states, “but it is unclear if, beyond that, they should consider that they also have a duty to contribute to the alleviation of poverty.”

According to the authors, there are three channels by which companies can help alleviate poverty:

• The Enterprise Channel, “when a foreign firm employs people locally.” This has not worked well in Latin America, as privatisation has often resulted in fewer jobs, and a largely unskilled labor force fails to meet employers’ needs.
• The Distribution Channel, which “involves the poor as consumers.” For example, the Mexican telecom, América Móvil, offers a pre-paid, low-cost mobile phone card to the very poor, who have no established credit rating with which to apply for a fixed line. While offering valuable services at a reasonable cost is laudable, the money is still flowing in only one direction – from the pockets of the poor into the coffers of the telecom company. How, precisely, does this help to eradicate poverty?
• The Government Revenue Channel, AKA taxation. The authors admit that this channel has been fruitless. The governments have failed to collect big taxes from the global Latinas, and no one seems displeased with this. South American governments, after all, are famously corrupt. Tax money is hardly likely to fall into the hands of the impoverished. The authors concede: “…no Latin American country can pretend that it has a successful fiscal policy. As a matter of fact, only 25% of the region’s population believes that their taxes are being well spent.”

The reader might at this point be forgiven for concluding gloomily that there is no real CSR, anywhere, in all of Latin America.

The authors, however, go on to cite several examples of “corporate philanthropy,” although such activity does not quite constitute CSR, in their opinions. (“…most business managers in Latin America do not understand the nuances between corporate philanthropy and CSR.” Since they neglect to make the distinction, many readers may also fail to grasp the nuances.) Regardless, the global Latinas have formed foundations and organizations practising philanthropy from Mexico to Chile. These foundations boost health care and education, build better irrigation systems, reward ethical management practices, conserve the environment, etc.  These final pages of the chapter are an inspiring catalog of South American companies doing good for the local societies. Is that not the heart of CSR, after all? Regardless of where on the globe it is practised?

For more on Global Latinas, click here.◊

Tweet This Post Plurk This Post Buzz This Post Delicious Digg This Post Facebook Reddit Stumble This Post