Peace through Commerce: Responsible Corporate Citizenship and the Ideals of the United Nations Global Compact

IBM and Corporate Citizenship

C H A P T E R 1 5 IBM and Corporate Citizenship Stanley Litow Corporate citizenship describes a company’s total dealings with the community—local, regional, national, or global. It encompasses traditional corporate philanthropy as well as activities far beyond the traditional. A company’s record of social responsibility is a critical component of its brand value, and if properly planned and delivered , it can provide a significant competitive advantage in the marketplace. Corporate citizenship, therefore, is of material benefit to the company and essential to a business’s success wherever it operates , including emerging markets. Corporate citizenship exists at the nexus between a company’s business and community interests. While there are certainly inherent conflicts between these elements, and natural tensions that need to be balanced and resolved, it is possible to resolve these conflicts satisfactorily and for a business to be successful as both an economic and social enterprise. To be effective as a business, it is vital that a company fully understand the global communities where its employees and customers reside and where it does its business; this is true both of the local and international communities. It is impossible to do this well without engaging and interacting comprehensively with neighboring institutions—public, private, and voluntary—through sustained civic activity. Polls, grants, studies, committees, or third parties are not enough for building this type of relationship; rather, direct participation and engagement by the company, its employees, and its leadership is necessary. To understand the value of corporate citizenship , a firm needs comprehensive and effective ways to benchmark and measure performance; as with any other element of 336 IBM and Corporate Citizenship 337 business, corporations must learn what works and what does not and how to improve through innovation. It is for these reasons that IBM helped to form the Global Leadership Network (GLN), which consists of nearly two dozen world-class companies seeking to identify how high to set the bar for performance and how to measure their performance using a framework that lends itself to both benchmarking and continuous improvement .1 In the best sense, private sector resources both build and sustain communities . Their employment rolls and taxes support community infrastructure , government, and schools. Company employees participate as voters, parents, and taxpayers and support the civic and community sector financially and by offering stewardship and full participation. In this scenario , the community and its businesses are not adversaries but full partners . Through its labor practices and behavior, a company can contribute to the community work life, and company practices can promote safer, cleaner, and sounder environments and the ethical behavior critical to community health and vitality. At IBM and many other companies—but certainly not all—a code of ethics is embedded into the expectations set for every employee on a global basis. IBM’s code of ethics is part and parcel of all company business practices. While companies must meet their commitments as full partners, it is also true that communities must do the same. The manner by which a community or a company approaches issues such as regulation, taxation, energy costs, transportation, and labor practices impacts the ability of a company or a community to succeed. Local schools, social welfare infrastructure , and the arts are vital to business success and contribute to decisions concerning a business location, expansion, or contraction. Because of the interdependency of business and community, no one business or sector can “go it alone.” Collaboration and partnership across all sectors of the economy is critical and essential for community stability. Progressive companies see their social investments and policies as being intrinsically linked to their core values. Sustaining values requires that these values be linked closely to the company’s business strategy. Without a link to values and principles, it is impossible to initiate broad strategic efforts or to respond to crises. Great companies—and real leaders—have a set of core beliefs that defines the corporate culture and a company’s behavior. They are able to sustain those beliefs or values over time, beginning with the quality of a company’s goods or services and the 338 Stanley Litow way it treats its employees and customers and extending to how it treats the broader community. A corporate culture of this kind encompasses business ethics, environmental actions, and fiscal and labor policy. Great companies prize the core values of integrity and trust. They...