Enhancing Business-Community Relations

Enhancing Business Community Relations:
The Role of Volunteers in Promoting Global Corporate Citizenship

Philippine Business for Social Progress
United Nations Volunteers
New Academy of Business

Editorial Board
Ramon R. Derige, Associate Director, PBSP
Elvie Grace A. Ganchero, Manager, PBSP-Center for Corporate Citizenship
David F. Murphy, PhD, Director, New Academy of Business
Rupesh Shah, PhD, Action Researcher, New Academy of Business
Beatriz Fernandez, Programme Officer, UNV

Project Coordinator
Angelito A. Nayan, Senior Program Officer, PBSP-CCC

National United Nations Volunteer
Charmaine Nuguid-Anden, Business-Community Relations Specialist

Cover Design and Layout
Katrina B. Villa

Philippine Business for Social Progress (PBSP) was created by socially responsible business people in 1970 as a response to the
socio-economic crisis confronting their time. Today, the Foundation has firmly established itself in the social development sector
and has reaped various achievements. Working with other sectors of society, it has made a difference in the lives of thousands of
underprivileged Filipinos. It has, likewise, been at the forefront of the practice of corporate social responsibility. As it marks its 33
years, the Foundation is planting new seeds – charting directions and creating active responses to the challenges posed by the
times.

The United Nations Volunteers (UNV) programme is the UN organization that supports human development globally by promoting
volunteerism and by mobilizing volunteers. It is administered by UNDP and operates amidst growing recognition that volunteerism
makes important contributions, economically and socially, to more cohesive societies by building trust and reciprocity among
citizens. Every year some 5.000 UN Volunteers from more than 150 different nationalities actively support the programmes of the
United Nations itself and almost all UN funds, programmes and specialized agencies.

The New Academy of Business is committed to transforming business and management practice through education and research.
New Academy creates innovative learning materials to explore social, ethical and environmental questions, helping entrepreneurs,
leaders, managers, workers and students respond to sustainability and organisational responsibility. New Academy also works with
partners to develop insights into these complex issues through a people-centred learning approach known as ‘action research’. Based
upon continuous cycles of reflective observation and practical application, action research creates new understandings and supports
personal and organisational change.

continued on inside of back cover

ENHANCING BUSINESS COMMUNITY RELATIONS:
THE ROLE OF VOLUNTEERS IN PROMOTING
GLOBAL CORPORATE CITIZENSHIP

PHILIPPINE COUNTRY REPORT

W hen we began to explore collaboration between United Nations Volunteers (UNV) and New Academy
of Business in 1999, the various individuals involved in our initial discussions agreed on the need
to promote greater international understanding of the experience of responsible business practice in
developing and transitional countries. At the global level, we noted the dominance of Northern and Western
perspectives on corporate citizenship and corporate social responsibility. Much of the impetus for these
new or reformulated business concepts appeared to be coming from European and North American
multinational corporations and NGOs. So we wanted to find ways to give greater international voice to the
diversity of business and community experience on responsibility issues in other parts of the world. We
also wanted to identify and promote new models of doing business that would build upon and be relevant
to local experience in the majority world.

In mid-2001, UNV and the New Academy launched the ‘Enhancing Business-Community Relations’ action
research project together with various partners in Brazil, Ghana, India, Lebanon, Nigeria, Philippines and
South Africa. In the Philippines, we have benefited from working with Philippine Business for Social
Progress (PBSP), one of the world’s leading organizations mobilizing and supporting the role of business in
social development. Established in 1970 more than a decade before Business in the Community in the UK,
PBSP has developed a deep understanding of the social, economic and environmental benefits of closer
more mutually beneficial business-community relationships.

With the publication of PBSP’s timely report – ‘Enhancing Business Community Relations: The Philippines’
– the invaluable development experience and knowledge of Filipino companies, communities, NGOs and
government agencies is brought together for wider global dissemination. We have very much valued this
opportunity to work together with PBSP and UNV on this project in the Philippines, and look forward to
future, fruitful collaboration.

Dr. David F. Murphy
Director
New Academy of Business
Bath, 9 October 2003

4

EBCR Philippine Country Report

FOREWORD

A s the role of government is shrinking because of globalization, more and more companies are
expected to take an active role in socio-economic development. Leadership companies, in
particular, believe that beyond philanthropy, investing in people and society makes good business
sense. These companies are beginning to realize that if they are to make a lasting and sustainable
contribution to society, they need to look into their core competencies and share their internal values
and skills to benefit, for instance, community-based organizations, the youth or women entrepreneurs.
Indeed, this is an opportune time for both large and small companies to help make a positive impact
on society by sharing their most precious resource – their people.

It is, therefore, with great pleasure that the Philippine Business for Social Progress (PBSP) partnered
with the New Academy of Business (NAB) and the United Nations Volunteers (UNV) to produce an
‘action research project’ entitled, Enhancing Business-Community Relations: The Role of Volunteers
in Promoting Global Corporate Citizenship, after two (2) years of collaborative inquiry.

The Philippine Country Report, in particular, focuses on determining innovative corporate-community
relations model and the characteristics of genuine corporate-community partnership (CCP) building.
Likewise, ten (10) case studies of select companies are highlighted, illustrating their unique “brand”
of Business-Community Relations (BCR).

Indeed, PBSP, UNV and NAB strongly believe that it is strategic for companies to pursue corporate
volunteerism as a strategy and mechanism for BCR initiatives within the context of corporate social
responsibility (CSR) or corporate citizenship.

5

This research project not only identifies major drivers and innovative models of BCR in a developing
country such as the Philippines, but also, and more importantly, recommends action points on the
following: improving the quality of stakeholders engagement; enhancing the role of government;
maximizing volunteerism as a strategy; and ensuring the effectiveness of BCR engagements through
enabling factors.

We hope that this action research, together with six (6) other EBCR Country Reports from Brazil,
Ghana, India, Lebanon, Nigeria, and South Africa, will help bridge the gap in understanding and
cultivating relationships between communities and businesses that are more socially just and
ecologically sustainable.

GIL T. SALAZAR
Executive Director
Philippine Business for Social Progress

6


Community Relations,” implemented internationally in partnership with the New Academy of
Businessand the United Nations Development Programme, and within the Philippines with the Philippine
Business for Social Progress. This project has generated a wealth of knowledge, and this Philippines
Country Report is one of its key publications.

there is a rich and promising future for corporate volunteerism and partnerships between the private
sector and UN Volunteers.

7


TABLE OF CONTENTS

13
I. INTRODUCTION
14
A. The Overall EBCR Project
1. Action Research
2. Partnership Promotion and Building

19
B. The EBCR Project in the Philippines
1. The Context and Objectives of the Philippine EBCR Project
2. Application of the Action Research Methodology in the Philippine Project Study
a. Volunteerism as a Mode of Partnership of BCR
b. The Emerging Models of BCR

II. ANALYSIS AND FINDINGS 35

A. Business-Community Relations in the Philippines: A Review of Literature 35
1. Emergence of BCR in the Philippines
2. Drivers of BCR
3. Emerging Models of BCR
4. Quality of Stakeholders Engagement
5. Volunteerism as a Key Component of BCR

B. Business-Community Relations in the Philippines: Action Research Findings 56
1. Findings from Survey and Scoping Research
a. Emergence of BCR in the Philippines
b. Drivers of BCR
c. Emerging Models of BCR
d. Quality of Stakeholders Engagement
e. Volunteerism as a Key Component of BCR
2. Findings from Case Studies
a. On Emerging BCR Models and Strategies of Engagement
b. On PBSP’s Experience as a Model BCR
c. On Corporate Volunteerism
d. Distillation Phase

9

III. CONCLUSIONS 75

A. PBSP’s Corporate Citizenship as a Model Framework 75
B. On the Quality of Stakeholders’ Engagement 76
C. On the Enhancement of Government’s Role 78
D. On Volunteerism as a Strategy 80
E. Enabling Factors for Effective BCR Engagements 82

IV. OVERALL RESEARCH FINDINGS: INTERNATIONAL TRENDS 87

ANNEX 1: Country Background 97

ANNEX 2: Case Studies

• CEMEX with a Heart: A Holistic Approach to Community Development 107
• Davao Light and Power Company: Street Lighting Program 119
• Figaro Coffee Company: Save the “Barako” Bean 127
• In the Business of Making Peace: La Frutera and Paglas in the Philippines 134
• DTI/Nestlé: The “Kapihan sa Quezon” Program: A Partnership Towards Community 142
Development
• Organized Advocacy for Corporate Citizenship: The PBSP Story 153
• The Petron Corporation: Volunteerism in Action (VIA) 168
• Building Community Partnerships: The Community Technical Working Group 182
(CTWG) Experience: Silangan Mindanao Exploration Company, Inc.
• Sun Microsystems Philippines, Inc.: Open Source/StarOffice Training Volunteering 192
Case
• Unilever/DTI : Growing Cucumbers: A Case Study on Unilever and DTI 200

10


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INTRODUCTION

W ith business, trade, and commerce becoming more global and complex, new and greater demands
for enhanced corporate social responsibility and transparency are being placed on companies by a
wider range of communities or stakeholders. Businesses today are realizing that they are expected not
only to concern themselves with the quality of management in their workplace (employees, shareholders,
union) and marketplace (customers, suppliers), but also to take active interest in and produce an overall
positive impact on society. The latter includes sub-contractors, government agencies, local communities,
NGOs, multilateral organizations, religious organizations, the media, academic institutions, and various
other internal and external interest groups.

To make globalization work for all the world’s people, the UN Secretary General, Mr. Kofi Annan,
introduced the Global Compact in 1999, calling on business leaders to embrace its nine principles
upholding human rights, labour rights, and environmental responsibility. More than 300 companies
worldwide have already lent their support to this new global partnership initiative.

Alongside achieving their corporate goals and building goodwill toward other companies, corporations
are expected to also provide solutions to social problems, and to strengthen the local economy.

Business-Community Relations (BCR), therefore, encompass various interactions between private sector
organizations and local communities that promote community development, environmental sustainability,
improved labor practices and other dimensions of corporate citizenship. Business Community initiatives
include but are not limited to cause-related/social marketing, corporate community involvement (CCI),
community economic development and philanthropy. Businesses may show social responsibility by
undertaking initiatives/projects related to socio- or economic issues such as education, environment,
health, business ethics, intellectual property rights, culture, agriculture, human rights, human resources,
poverty, gender, etc. (Mahajan, UNDP)

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A. THE OVERALL EBCR PROJECT

I n mid-2001 United Nations Volunteers (UNV) and the New Academy of Business, U.K., launched an
18-month action research project entitled “Enhancing Business-Community Relations: The Role of
Volunteers in Promoting Global Corporate Citizenship.” This project was conceived as one of
numerous initiatives that UNV launched during the International Year of Volunteers1. At the time it
was recognized that little was known about the extent to which healthier relationships were being
forged between communities and businesses in developing and transitional countries and the role
that volunteerism would play in these relationships.

The objectives of the collaborative project were:

1. To explore current trends in business-community relations and corporate citizenship in
seven developing countries – Brazil, Ghana, India, Lebanon, Nigeria, Philippines and South
Africa.

2. To identify and promote new models of business-community relations and enhanced
corporate citizenship practices at the local level in these developing (or transitional)
countries.

3. To engage the participation of volunteers as partnership facilitators between UNV and
other agencies businesses, and local communities.

Seven locally based “UNV Specialists in Business-Community Relations” spearheaded the action research
efforts. The project drew upon the strengths and resources of host partners: Instituto Ethos in Brazil, the
Association of Ghana Industries (AGI) in Ghana, The Energy and Resources Institute (TERI) in India, Philippine
Business for Social Progress (PBSP) in the Philippines and the African Institute of Corporate Citizenship
(AICC) in South Africa. For the Lebanon and Nigeria components, the UNV Specialists were based at United
Nations Development Programme (UNDP), coordinating efforts with UNDP’s wider private sector engagement
in these two countries.

1
see http://www.unv.org/infobase/anrep/2001/ar01_en.pdf.

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Implementation agencies were:
OVERVIEW OF THE ACTION RESEARCH
1. The United Nations Volunteers METHODOLOGY
programme (UNV)
In order to create sustainable and
UNV is the volunteer arm of the United responsible business practices, companies
Nations. Established by the UN General are confronted by paradoxes which arise
Assembly in 1970, UNV, which works when they attempt both to shift cultures
through UNDP’s country offices around the and frames of reference as well as to
world, promotes volunteer contributions to institute new action. Much writing and
development and serves as an operational research on these issues has been
partner in development cooperation at the theoretical, or has taken the form of
request of the UN member states. advocacy:2 little of it is based on practice,
documenting what is being learned by those
2. The New Academy of Business, U.K. who are actively working at change towards
sustainable and responsible business, at
New Academy of Business is an both small and large scales. This project has
independent business education sought to use an approach to research
organization and a registered UK charity known as collaborative inquiry, drawn from
that was established in 1995 by Anita the ‘action research’ family of
Roddick, founder and Co-Chair of The methodologies, to explore current trends in
Body Shop International Plc. Since its business-community relations and related
inception, the NAB has been at the corporate citizenship initiatives in seven
forefront of a new wave of business countries.
thinking and action on global corporate
responsibility. Action research is unlike traditional
research in that participants seek to act in
The project is composed of two phases: an action ways that are both useful to the people
research phase and a partnership promotion and involved – producing knowledge that is
building phase. relevant and practical – and empower the
participants as they construct and use
1. Action Research knowledge.3 Work is done – in both personal
and group settings – to bring the values,
This phase included a qualitative research ‘theories’ and practices of an individual
study aimed at businesses to investigate closer together. Participants engage in
why and how they became involved in cycles of action and reflection: individuals
development initiatives. Research and groups move between acting, observing
findings from each country were compiled

2
See articles in the Journal of Corporate Citizenship or Business and Society Review, for example
3
For elaborations on the family of practices labelled as action research – around which the New Academy bases its research
activity – see Handbook of Action Research by Reason and Bradbury (2001). For research into corporate responsibility using
15
action research methodologies see Bendell (2002), Prieto and Bendell (2002) and Shah (2001). 15

and jointly analyzed. The UNV and the
New Academy of Business coordinated the OVERVIEW OF THE ACTION RESEARCH
research in the seven countries and METHODOLOGY (...continued)
would disseminate the findings via
conferences, workshops and publications. experiences and then reflecting upon these,
with the intention that more meaningful
action can be generated. Collaborative
2. Partnership Promotion and Building inquiry is a form of action research that
seeks to promote open, shared reflection
The project would offer to individual about organizations. This, in turn, enables
companies tailor-made strategies that participants in the research process to
would benefit both their firm and local address organizational and personal value
communities. Various activities under the differences and to find creative ways of
project include: resolving paradoxes.

a. Creating awareness through The project has been designed to enable
written, audio visual, and virtual each UNV specialist to undertake research
media (web-site and e-mail list). with his or her UNV colleagues, working in
similar but different ways in other parts of
b. Identifying and forming the world, but with common objectives. By
partnerships between various finding ways to connect with co-inquirers,
stakeholders including UNDP, to share experiences and discoveries –
other lead UN agencies, civil including what each found difficult about
society, local community-based their action – the aims were to enrich the
associations and NGOs, businesses, process, build a shared understanding of the
associations, chambers of work being done, and develop skills in
commerce, universities, etc. collaboration that were directly relevant to
the partnership-building task.
c. Organizing national workshop to
bring together businesses and This form of inquiry is often seen as having
development actors together for four main characteristics:
brainstorming, dialogue and joint
action. • It is conducted in repeated cycles of
action and reflection. The interplay
d. Publishing reports, brochures, between what is discovered and
newsletters, case studies, and a achieved through action, and what
guidebook on business- sense is made of this through reflection,
community relations.

16


OVERVIEW OF THE ACTION RESEARCH
METHODOLOGY (...continued)

e. Formulating Project Document/ is important, lending a discipline to the
Joint Project Proposals with UNV/ process
UNDP/UN Agencies/ New
Academy of Business. • It seeks a balance between inward,
reflective attention and outward,
f. Attending to other activities as practical attention.
may arise within the course of the
project. • Being an action inquirer also requires
the development of a ‘critical’
perspective – being able to get some
distance between both the action and
Project Activities experience, and evaluate it, in the light
of ideas, theory, reading, and other
During the project each of the UNV specialists perspectives.
undertook a range of collaborative inquiry and
networking activities. Following the orientation in • Working in this way demands that the
the UK in September 2001, the project specialists researcher develops participation and
returned to their respective countries and began collaboration, with other co-inquirers
gathering information and resources regarding the and with those with whom they are
state of business-community relations at the working such as sponsors, hosts, and
national level and documenting good practice those who supply information. The
examples. Between April and September 2002 intention is that this kind of research
national workshops were conducted in each of the is conducted not on people, but with
seven countries. In seeking to go beyond traditional people.
research, the specialists also developed their
understanding by engaging in partnership-building
at the national level and sharing experiences across
the seven countries through online discussion
and sense making.

17

Project Reports

1. The various activities at national level are described in the seven country reports. Each country
report offers the reader an overview of current national trends in business-community relations,
corporate citizenship initiatives and the role of volunteers in these processes.

2. Additionally each report presents ten case studies (total 70 case studies from the seven countries)
that highlight specific practices in the area of business-community relations.

3. A final global report will be made available towards the end of 2003. It will draw together the
work from the seven countries and develop a synthesis of international trends in business community
relations, with special attention given to the role of volunteers in promoting responsible business
practice.

4. Finally, follow-up projects will be developed, all aimed at continuing to create healthier relations
between communities and businesses.

Project Benefits

How will the corporate sector benefit from this project?

1. The project will directly benefit businesses and local communities which participate in projects
that are generated, as well as local sub-contractors and suppliers that are directly and indirectly
affected by relations between participating communities and companies.

2. By engaging in community initiatives, companies will clearly benefit from:

• New partnerships with UN agencies;
• Enhanced brand image and reputation;
• Improved customer goodwill and loyalty;
• Increased attractiveness to investors;
• Strengthened relationships with all stakeholders;
• Improved prospects for long-term financial and organizational success;
• Enhanced perception among communities and the public;
• Strengthened employee loyalty, commitment, morale, retention, and performance; and
• Enhanced ability to attract more talented and motivated employees.

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Other benefits of the project are:

• enhance international understanding of the meaning and experience of business-community
relations across different geographical and socio-economic contexts;

• facilitate international learning and networking for the development of partnerships and
promotion of locally grounded models of healthy business-community relations; and

• encourage the active participation of volunteers in the promotion of business-community relations
and related global corporate citizenship practices.

B. THE EBCR PROJECT IN THE PHILIPPINES

W hile globalization, especially in the past decade, has brought about positive changes in the socio-
economic and political environments of many countries, it has put developing countries like the
Philippines in a disadvantaged position. The issues and problems that have surfaced in the country because
of globalization have called for redefining roles of government, civil society and businesses, and have
demanded new approaches and strategies to address these concerns.

Government, business and civil society have responded to this challenge by way of exercising their influence
and power. In order to achieve development at national and local levels, these three sectors are learning
to be more inclusive, more efficient, transparent and accountable in the way they operate and more
strategic as they aim to institutionalize and sustain their efforts. These sectors have recently emerged as
organized stakeholders instead of beneficiaries and have new demands and expectations from one another
toward sustainable community development.

Some members of the business sector have come to a point where involvement for social good is no
longer considered optional. Corporate Social Responsibility (CSR) or Corporate Citizenship (CC) serves
as a guiding principle that compels companies to make strategic choices based on an understanding
of the total impacts of their business to the community, in particular, and to society, in general. CSR
posits that corporations have social and environmental objectives on top of their economic purpose.
Recently, the notion of CSR has been reviewed in the light of the challenges brought about by
globalization. The slowdown of Philippine economy has an effect on the amount of resources that
business will channel for social welfare. Thus, corporations are looking for models of CSR that work

19

best for the company and society and practices that create greater value to both business and
community. An understanding of such models will also enable CSR advocates to innovate and sustain
their efforts within the context of the changing roles of the various stakeholders in a globalizing
environment.

1. The Context and Objectives of the Philippine EBCR Project

In the Philippines, the project was hosted by the Philippine Business for Social Progress (PBSP), a leading
corporate-led foundation which promotes business sector commitment to social development. The project
was specifically billeted in the program portfolio of the Center for Corporate Citizenship (CCC), which
serves as the Foundation’s arm for research and advocacy, program development, dissemination and resource
mobilization for corporate citizenship.

As shown in Fig. 1, PBSP over a period of 30 years has seen corporate citizenship expressed in four, often
overlapping, areas:

1. Environmental Stewardship;
2. Managing Workplace Concerns;
3. Social Investment; and
4. Corporate-Community Partnership.

The EBCR project was grouped under the latter two areas of the Center’s work plan with emphasis on
Corporate-Community Partnership (CCP).

Figure 1: The PBSP Corporate Citizenship Framework©

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Under PBSP, the Philippine EBCR project objectives focused on determining innovative Philippine
corporate-community relations models and the characteristics of genuine corporate-community
partnership building. The project sought to examine the dynamics of corporate-, community- and
government-facilitated BCR, the enabling and hindering factors they face in BCR promotion and
impacts of their efforts to the community. The project also intended to look at volunteerism as a key
component of BCR. Since the Philippines is one of the few developing countries with a long history
of CSR, the project aimed to promote CSR not only for local advocacy but also as model or benchmark
for other developing countries. PBSP, a pioneer and strong player in Philippine CSR, was also considered
a UNV partner for potential joint projects, aside from companies and communities.

2. Application of the Action Research in the Philippine Project Study

The project adopted the action research as a methodology to explore current trends in business-community
relations and related corporate citizenship initiatives in the Philippines. Following PBSP-CCC’s Program
Development Management System, the action research and project proposal phases were stretched to a 5-
phase loop: Research, Distillation (generally done with external publics), Program Development and Piloting,
Evaluation and Documentation and Dissemination. As the Overall Project itself only has 2 phases, the
applicability to the local Project is only until the 3rd phase. Any work that would extend to the 4th and
5th phases would be part of the work on the implementation of the proposal itself.

Figure 2: Program Development Management System and the CC Framework

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Research Phase

Under the Research phase, new actionable and emerging issues that touch on the four CC themes were
identified. Employing the Scoping Research Terms of Reference developed by PBSP, ten (10) case studies
were developed and used as the base for thematic-sectoral analysis (Government, Business, Civil Society).
These ten case studies were developed using key informant interviews, focus group discussions (with the
stakeholders involved in each identified engagement), as well as document analysis.

Presented on the next page is the Philippine research implementation matrix.

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Table 1: Research Implementation Matrix

Research Themes Specific Research Research Components
Objectives/ Agenda
Overarching Theme: Enabling Volunteerism and Stakeholder Partnership as a Context and Method for
Corporate Responsibility

PBSP (Center for Corporate • Identify specific challenges/ Case study on the Center for
Citizenship) as a developing opportunities for corporate Corporate Citizenship
country model of corporate citizenship in a developing country
citizenship context

Quality of Stakeholder • Identify trends and gaps in • Scoping Research on
Engagement (Business- stakeholder engagement (i.e. Corporate-Community
Community Relations to business, civil society, Engagements (in the context
Corporate Community communities, etc.) of Volunteerism)
Partnerships) • Identify alternative/ non- • 6 case studies
traditional activities/ venues for
corporate responsibility/
volunteerism
• Identify alternative venues for
promotion of quality stakeholder
engagement
• Promote stakeholder view of
communities
• Promote internal (i.e. employees),
virtual, national & global
community concepts
• Promote views on volunteerism as
a context and mechanism for
stakeholder relations
• Provide a mechanism for
community/civil society pursuit of
corporate responsibility -
empowerment of communities

Enhancing Government Role • Enhance the role of national govt. • Scoping Research on
in encouraging responsible in encouraging corporate Government-facilitated
corporate behavior responsibility Business-Community
Relations
• 3 case studies
• Survey on Correlation of
Fiscal Incentives and Socially
Responsible Corporate
Behavior

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Distillation Phase

The Distillation phase involved the conduct of interactive sessions with internal and external groups in
order to get additional input and broad-based understanding and/or support for particular options or
positions.

To a large extent, the Meeting of Minds (MOM) at the 1st Asian Forum on CSR was used as an ad hoc
interactive session to share preliminary findings. For more focused discussion, a Roundtable Dialogue was
conducted with key internal and external audiences. The final version of the Country Report itself was
subjected to a Round Table Discussion on September 9, 2003.

Program Development Phase

The Program Development Phase employed a management systems approach to ensure institutionalization
of programs and projects with the following aspects: policy development, strategic program development
and implementation, systems development, and measurement.

Table 2 on the next page shows the input–mechanism—output matrix of the Philippine Research Project.

24


Table 2: Input-Mechanism-Output Matrix of the Country Project

COMPONENTS ACTION RESEARCH PROGRAM ADVOCACY
DEVELOPMENT AND
Project Proposal PROMOTION

PBSP as CC Incentives/ Govt.-led CCP/
expression CCP and Volunteering/
Perception Poll
PROCESS

INPUT • Key • Scoping Research Design • Research results • Research
Informants Secondary Data • Companies results
• Records of • Key Informants • Communities • Leading CSR
CSR Practices • Networks practices
• Government
RESOURCE/ • CSR Evolution • Benchmarking tools • Dialogues and • IEC Materials
METHODS Analysis • Research tools (i.e. discussions and other
• Review of survey, questionnaire, • Resource promotions
CSR literature interviews, dialogues, etc.) mobilization • Dialogues
• Interviews & • Volunteer effort • National
Dialogues Workshop

OUTPUT • CSR Evolution • Position on volunteerism • Partnership • Increased
Documentation as context and strategy generation awareness,
• Identification • CCP, Incentives & acceptance
of new CSR alternative volunteering and level of
trends/ cases practice
practices • Impact indicators of CCP
• Validation of and CSR
CSR • Research papers
Framework • Project Synthesis papers
• Country Paper

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Research Focus

The study focused on two major areas: volunteerism as a component strategy of BCR and the models and
strategies of quality engagement in BCR.

A. Volunteerism as a Mode of Partnership of BCR

Volunteerism can mean many different things across cultures and states. Volunteering is an act of exchange
and reciprocity that is likely to have multiple meanings, takes different forms, and is defined by its
environment. A UNV background paper prepared for the Expert Group Meeting on Volunteering & Social
Development held in 1999 suggested a framework of voluntary actions with the following defining
characteristics:

• Actions should not be undertaken primarily for financial reward, although reimbursement of
expenses and some token payment may be allowed.

• Free will is an essential element of voluntary actions.

• Actions can occur within or outside formal organizational or institutional settings.

• Actions should benefit some individual or group other than just the volunteer himself/herself.

• The levels of commitment can vary depending on the person, activity and resource.

PBSP distinguished four kinds of volunteering activity delineated according to final outcome or final
purpose: mutual aid or self-help, philanthropy or formal service delivery, participation or civic engagement
and advocacy or campaigning as shown below. Each is described in Table 3.

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Table 3: Characteristics and Kinds of Volunteering Activities

Characteristics of Volunteering Kinds of volunteering activity

Volunteering takes different • Mutual aid or self-help plays a primary role in community welfare
forms and is defined by its in many parts of the developing world. It is often the main
environment. However, there are system employed for social and economic support.
key defining characteristics of
• Philanthropy or Formal Service Delivery is distinguished from
what are deemed voluntary
self-help in that the primary recipient of the volunteering is not
actions:
the member of the group him or herself but an external third
• Not taken on primarily for
party, though it is acknowledged that philanthropy includes an
financial benefit
element of self-interest.
• Taken on according to an
individual’s free will, though • Participation or Civic Engagement refers to the role played by
grey areas exist in this individuals in the governance process, from representation on
aspect. govt. consultation bodies to user-involvement in local dev’t.
Must benefit someone other projects. It is most developed in countries with a strong tradition
than the volunteer, or society at of civic engagement.
large, though it is recognized • Advocacy or Campaigning are often instigated by volunteers, also
that the act brings significant known as activists, specifically targeted to effect legislative
benefit to the volunteer as well. change or other forms of broad sweeping social improvements.

The kinds of volunteering activity identified during the Expert’s Group Meeting provide the contexts for
engagement that can be formed by other sectors with the business sector. This is especially challenging
because the characteristics of business activities and goals are often not the same as the characteristics
of volunteerism. Thus, there would be a need for a framework by which the different stakeholders could
obtain the same goals and equitably-shared benefits and risks under the auspices of volunteerism.

The EBCR study was expected to help determine the connection between volunteerism and BCR practices.

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B. The Emerging Models of Business Community Relations

There has been a lot of debate on the definitions of Corporate Social Responsibility (CSR), Corporate
Citizenship (CC) or Business Community Relations (BCR) as all of them reflect in one way or another the
diverse policies, methods and processes that the business sector uses in interacting and relating with the
other sectors and communities.

Philippine business associations agree on these definitions:4

• That CSR is the baseline behavior (i.e., compliance) that companies should demonstrate in
society. It embodies the social mission of corporations on top of their economic purpose.

• That corporate citizenship is about companies going beyond the expectations of communities,
government, and civil society.

Underpinning these definitions is the concept that business is responsible for more than profit-
making. Because of its inherent strengths, such as resources and technical capability in an increasingly
market-driven society, the business sector should also be responsible for and contribute to society-
building.

There are four paradigms of CSR that are implemented in the Philippines:5

1. Corporate-Giving or Philanthropy

Corporate-giving or philanthropy is defined as providing resource to intended beneficiaries.
Over time, this can develop a dole-out mentality and over-dependence on corporations. To
prevent this mindset, corporations have begun to treat corporate-giving or philanthropy as a
community or social investment, thereby reframing giving in terms of what the returns to the
community or society are.

2. Business Community Relations

BCR is the direct involvement of the company in community-based programs either by themselves,
in partnership with an NGO/a community association/a local government, or in coalition with
other businesses. The partnership approach to development is common in the Philippines.
There is the prevalent desire to pool corporate resources to achieve greater impact.

4
Taken from a series of Focus Group Discussions on Benchmarking CSR in the Philippines conducted by PBSP.
5
Juan Miguel Luz, Corporate Social Responsibility in the Global Community: A View From The Ground: Building Partnerships
For Development, 2000.

28


3. Business/Industry Practices

Business and Industry Practices type of CSR is shown through codes of conduct where “best
practices” begin to be viewed as standards for operating businesses. These have become important
self-regulating mechanisms and vehicles for corporations to buy into industry-wide practices.

4. CSR as business strategy

CSR as business strategy is the new area of development with two modalities: (1) as an
alternative delivery mechanism for a public good, and (2) privatization of the public service.
This means that businesses can provide the services that government cannot deliver.

These paradigms of CSR define the roles and the strategies of business organizations in relation with the
other drivers of CSR — the government and civil society — to effectively implement their social responsibility
actions and programs. As BCR is just one of these paradigms, the EBCR study posited that there are
emerging models of BCR in the Philippines and that these models present different ways of engaging with
the different sectors involved in BCR.

In order to understand the strategies adopted by the stakeholders of BCR, the study looked at the following
areas of research:

a. Government Influence on CSR

In recognition of the greater role the private sector plays in social development, government has
been proactive in encouraging and implementing tri-partite efforts towards development,
particularly in the rural areas where the bulk of poverty exists.

The presence of a government advocate can at times promote or hinder business-community
relations. Some private sector participants allege that the strong state (or government) element
promotes a compliant rather than a voluntary environment, which would make participants less
innovative.

Incentives have been used by government to indirectly influence private enterprise behavior. In
the last decade, with the intent of spreading job creation and social development, incentives were
offered for businesses to start up in poor regions.

The EBCR project looked at government-led, business-oriented partnerships to assess the
viability of such engagements. The research looked at how government influences companies

29

to engage in CSR through incentives. Given that incentives and similar instruments are
dependent on the government’s perception of businesses, in the overall context of this project,
there might be a need to assess the awareness of government offices about CSR and to
identify the most effective government action that promotes CSR behavior.

b. The Community and Civil Society: Stakeholder or Beneficiary?

Companies often define their communities based on their operation’s areas of immediate impact,
i.e., host communities of plants or headquarters, sectors in line with the business, etc. These are
often done through community relations programs or personnel specifically assigned for the task.
However, despite cases of best practices in this area, the level of participation in communities and
within the company in general has been argued to not be that extensive. In this arrangement, the
beneficiary approach seems to be most prevalent, and in some cases has proven to be detrimental
to both parties as the level of dependence escalates.

This project challenged the traditional perception of communities by business by looking at emerging
community models, such as treating the community as a “stakeholder.” With PBSP, the project
also looked at ways of improving traditional corporate-community engagements. In order to
promote partnerships between business and communities, it was found imperative that a two-
pronged approach be taken to influence not only corporate but also community behavior.

c. Organized Business Involvement: PBSP as Model of CSR/CC in Developing Countries

Business involvement in the development of communities in particular and society as a whole
started very early in the Philippines. The colorful evolution of this corporate social responsibility
is summarized in the section Findings Based on Review of Literature.

Organized business involvement can be considered to have begun about thirty years ago. In
December 1970, in what was known by the top executives of the 50 biggest corporations in the
country as “a divine conspiracy for development”, the Philippine Business for Social Progress was
formed. Now thirty-three years in existence, PBSP continues its mission of championing the
social development cause in the business sector. Held together by a purely voluntary working
board of 21 CEOs and a professional social development staff, the organization has gone through
various stages of work — from that of fumbling around in the dark (“What do we know about
social development?”) to operating a highly professional social development NGO that integrates
business goals with social goals.

30


The research also looked at the evolution of CSR in the Philippines in order to provide input
to other UNVs’ drivers/enabling mechanisms they can look for or develop to promote corporate
citizenship in their countries. The project focused on PBSP’s Center for Corporate Citizenship as a
developer and promoter of corporate citizenship from a developing country’s perspective. This
study includes a presentation of the learnings distilled from PBSP in its 33 years of life.

31


33


II. ANALYSIS AND
FINDINGS

T he data and information about EBCR in the Philippines were drawn from two major research
sources. The first source was the extensive literature on the evolution and development of BCR
in the country. The second source was the findings of the surveys, case studies, and action research
conducted by PBSP in collaboration with UNV and New Academy.

A. BUSINESS-COMMUNITY RELATIONS IN THE PHILIPPINES: A REVIEW OF
LITERATURE

The application of CSR in the Philippines is well documented. This desk review shows the evolution of BCR
in the Philippines, the drivers of BCR, the emerging models of BCR and the strategies adopted to improve
the quality of engagement with BCR stakeholders.

1. Emergence of BCR in the Philippines

The involvement of business in social activities can be traced to the time when it was the practice of
wealthy families to give donations to the Church and charitable institutions. (Read the country’s profile
in Annex 1: Country Background).

From the 1960s to the 1990s, corporate philanthropy underwent a process of transformation. The strong
influence of the Roman Catholic Church on personal, state, and economic affairs paved the way for
business altruism. The practice of corporate social responsibility emerged during the late 60s as a
business response to growing social unrest. Amidst activism in the 60s and the 70s, to the concern for the
environment in the 80s and 90s, corporate philanthropy took on a new meaning. From then on, businesses
became proactively involved not only in the economic affairs but also in the socio-political affairs of the
society, mainly through their CSR programs and efforts.

35

Presented in the next pages is a summary of Velasco’s (1996) study of corporate philanthropy in the
Philippines. It describes briefly the periods that Philippine corporate philanthropy underwent and the
various socio-political events that affected it.6

The First Decade (1960s): The Decade of Donations

Social involvement of business during this period was very simple and uncomplicated. Usually, private
companies provided charitable institutions with donations in kind or in cash.

Social inequity was beginning to take its toll during this period. The top 5% of families were receiving an
annual income 33 times the average of those in the lower 20%. As a result, social unrest erupted.
Discontent in the countryside and in factories led to massive protest demonstrations that came to be
known as the riotous period of “the First Quarter Storm.” As witnesses to demonstrations within the
financial district where they worked, progressive business leaders reassessed the role they played in the
country’s development. The conclusion was while businesses had been supporting charitable activities in
a sporadic, fragmented and uncoordinated basis, there was a growing need for organized, professional and
continuing assistance.

The Second Decade (1970): The Decade of Organization

Inspired by Dividendo Voluntario para la Comunidad, a business association in Venezuela, several business
leaders (among whom were Jose Soriano of San Miguel Corporation, Sixto K. Roxas of the Economic
Development Foundation, and Howard Dee of the Association for Social Action) organized the Philippine
Business for Social Progress (PBSP). PBSP aimed to develop a method of attacking national ills “in a way
which parallels the vigor and industry with which private enterprises tackled the challenge of economic
development in the country.” Support for the organization came from annual voluntary contributions
from member companies who pledged to commit 1% of their pre-tax net profits. Of this amount, 60%
was channeled through PBSP to finance development projects for the member companies while the rest
was retained by the company for its own programs.

PBSP’s primary activities during this period included capacity building of its staff and partner NGOs,
developing a focused grant-making program, and maintaining the interest and commitment of its member
companies.

Aside from PBSP, the Bishops-Businessmen’s Conference (BBC) and the Association of Foundations (AF)
were founded in 1971 and 1972, respectively. BBC served as the venue for the Church and the business

6
Ma. Gisela T. Velasco, Corporate Philanthropy in Asia: The Philippine Case, 1996.

36


sector to address their common concern for the poor. The AF, on the other hand, was the country’s
first network of foundations. PBSP, BBC and AF operated independently but shared a common role in
promoting corporate social responsibility.

The Third Decade (1980s): The Decade of Involvement

The early part of the decade saw the Philippine economy shrinking in size and foreign investments pulling
out. This situation was triggered by the worsening debt crisis, the political turmoil after Benigno Aquino’s
assassination and insurgency in wider areas of the country. In the midst of this crisis, communities turned
to the companies near them to provide much needed support. Many companies responded by providing
services to the communities. This practice evolved what is now known as Community Relations or Comrel.

The initial Comrel efforts were largely welfare-oriented responses to a crisis. Companies viewed Comrel as
a means of improving the economic conditions of their communities in order to promote peaceful business
operations. Companies began to expand their notion of stakeholders — from shareholders to employees to
external publics such as the community — and redefined the meaning of their responsibilities.

In January 1993, PBSP conducted a survey of 110 companies known to have Comrel programs. There were
55 respondents. The survey findings were:

- Comrel was practiced by companies regardless of size, sector or location

- The CEOs were the drivers of Comrel

- Companies with plant-based operations or geographic considerations implement Comrel with
wider target base and broader concerns

- Comrel was provided with limited manpower and was managed on a part-time basis under
the Human Resource Departments

- Comrel issues include the need to translate social policies into coherent programs and to
secure greater support from internal constituents such as employees and shareholders.

Comrel entailed the building of new types of relationship with the public. It prompted the companies to
balance their interest for profit with community concerns. Finding the right fit was the challenge and the
key to success.

37

The Fourth Decade (1990s): The Decade of Institutionalization

Corporate Citizenship emerged during this period. CC suggested that “a corporation that derives profit
from society has duties and responsibilities that must contribute to society’s well-being.” CC encompassed
a variety of initiatives that businessmen were beginning to take part in, from corporate giving to Comrel,
policy formulation and networking.

Acknowledging the important role of CEOs in thinking through and trying to resolve the problems that
beset the country, PBSP created the Center for Corporate Citizenship (CCC) in 1992. CCC addressed itself
to the growing demands of an increasingly complex society or community as well as profit-making needs.

The Center served as a venue where CEOs discussed long-term issues on environment, education,
local governance, and countryside development. Here, CEOs identified strategic social investments
that business could undertake – “strategic” and “social” in order to focus on what would give the
greatest returns to society given the limited corporate resources; “investments” as a way of thinking
about more permanent interventions rather than mere ad hoc reactionary giving.

The Fifth Decade (2000s): The Decade of Continuous Improvement7

On its 30th anniversary, PBSP reconstituted the mandate of its CCC to include conducting research
and test programs and setting up management frameworks that would enable companies to carry out
their CSR properly and provide them with the means for continuous improvement.

Recognizing the country as a seriously fragmented society, divided economically and socially and where
50% are poor and disempowered, PBSP renewed its focus on poverty alleviation. This time, it pushed for
the participation of corporate citizens in improving access to basic services, education, and credit, and
developing new skills for the workforce to help them improve their lives.

It was within this period where PBSP launched the “Benchmarking Corporate Citizenship” and the “Corporate
Volunteer Program: Linking Worlds.” The first promotes ethically, socially, and environmentally responsible
business as exemplified by the best practices of its member companies. The second program, on the other
hand, encourages companies to mainstream volunteerism into their regular functions by providing them
with support services. These services include matching companies with volunteering opportunities,
developing viable models in corporate volunteering, assisting companies in adopting a systematic approach
to employee volunteering, facilitating volunteer engagements, and giving due recognition to outstanding
employee volunteer programs and projects.

7
PBSP Annual Report 2002.

38


The evolution of BCR in the Philippines manifests the great contribution of PBSP in CSR. Currently,
PBSP is the largest grant-making business organization in the Philippines. In 33 years since it
ventured into social development, PBSP has mobilized and invested over P5 billion pesos in social
development programs from membership contributions and funds from Official Development Assistance
(ODA). Working with over a thousand partner organizations worldwide, it has trained NGO workers
and grassroots leaders who serve the needs of close to two million marginalized Filipinos.

2. Drivers of BCR

Luz (2000) described the drivers for BCR as external and internal. The external drivers include: (1)
government- its regulation and laws; (2) increasing demand of society for business to alter behavior, as
articulated by the civil society; and (3) market forces. The internal drivers are: (1) individual managers’
behavior; (2) employees’ participation; and (3) BCR as strategy for better operations.8

a. Societal Demand and Market Forces

The Philippines’ poor growth performance due to economic mismanagement and political instability
are seen as the main causes of poverty. There is a wide gap in income distribution between the rich and the
poor who has limited access to basic social services. This gap is wider in Southern Philippines, where
abject poverty is a major reason for strife between Christians and Muslims. Infrastructure is still a major
deficiency in several areas of the country and contributes to the high cost of business and development.
Political instability, even after the “EDSA 2” revolt continues to harm the image of the country in the
world. National security has been threatened as outlawed political organizations have exposed long-
standing operations in the country.

It is within this context that corporations recognize the need for greater CSR approaches and strategies.
According to two prominent business leaders in the Philippines:

“Corporate Citizenship is not an option but an obligation to humanize the free market
system and give it a measure of social responsibility. Helping the poor help themselves
is the most effective, sustainable approach to reducing poverty, releasing human
potential and achieving better socio-economic equity.”
— Andres Soriano III9

8
Juan Miguel Luz, Corporate Social Responsibility in the Global Community: A View From The Ground: Building Partnerships For
Development, 2000.
9
A Quarter of a Century in Social Development, Philippine Business for Social Progress, 1995.

39

“The members of the corporate sector possess the resources and the management
expertise and organization to respond to the challenge. They will likely benefit from
the windfall of sustained economic growth if the gap between the rich and the poor
is narrowed. It is their businesses that will make use of the country’s larger consumer
base and its greater disposable income. If the corporate sector was conscious of its
social obligations and the benefits it would reap by addressing our country’s social
issues, it can be a major force of development.”
— Washington Sycip10

Market forces have become a major driver, however, in the past fifteen years or so and with it the idea
of best practices was tied to distinctly CSR behavior. From the idea of best practices arose the notion
of benchmarks that could be viewed as “collective best practices” impacting industry practices. With
the entry of societal demand as a driver for CSR behavior, the envelope has been expanded and with
it the necessary thinking of CSR as strategy.11

b. Government as External Agent of BCR

According to Luz, the Philippine government frames the policy environment in which businesses conduct
themselves. Although Philippine companies engaged in BCR have had different motivations for
doing so, the Philippine BCR experience shows that companies engage with government whether
they intend to or not. This is because both national and local governments design a number of
development programs, usually focused on special interest groups, wherein the involvement of the
private sector should be an integral component because of its capacity to sponsor or serve as funding
source.

It is clear, however, that most of these programs look at the private sector either as resource provider or as
potential violator not only of laws but of community and individual rights. For those companies with
purely profit motives, government becomes the most appropriate intermediary because of its moral and
legal authority. Even in one case where business dealt directly with the community (for profit), government
was supporting the engagement through the community, albeit from backstage.

10
Our Legacy, Philippine Business for Social Progress, 2000.
11
Juan Miguel Luz, Corporate Social Responsibility in the Global Community: A View From The Ground: Building Partnerships For
Development, 2000.

40


Where corporations are more developmental, government not only provides the enabling policy
environment but also the capability for both business and community to engage. In these cases
government provides the environment for companies to seek on their own the means to deepen their
relationship with communities.

The government promotes CSR because it is mandated to improve the living conditions of the
constituents. The government taps or partners with businesses to deliver development programs that
address community needs. The government issues policies and regulations to encourage businesses
to do CSR activities and also to compel them to protect communities (i.e., environmental laws).
Incentives have been used by the government to influence business behavior toward activities that
are deemed to have positive economic benefits. Government initiatives are directed at income
generation, enterprise development, or environmental protection.

In summary, the government’s major driver for facilitating or supporting these CSR engagements is its
mandate to serve the primary constituency, the community, and raise them out of poverty. The additional
resources obtained from the private sector allow the government to more effectively carry out its mandate.
Additional revenue and economic activity are a greater driver for the provincial, regional and national
governments.

c. Societal Demand as Articulated by Civil Society as Driver of BCR

Civil society started as a watchdog of government performance in public service. As local, regional,
and national governments failed to deliver appropriate services in certain areas, many civil society
organizations launched programs as alternative solutions. Today, many NGOs in the Philippines are
involved in a wide range of public service delivery — health, education, micro-enterprises, cooperatives
development, etc. As civil society organizations have institutionalized themselves into non-profit
organizations, companies have recognized that they too can be involved in similar areas where they
can share not only their financial resources but also their managerial expertise. Thus evolved their
higher level of engagement in CSR.

A major consideration for communities in engaging in CSR is how drastically the activities will
change their way of lives. Community people easily buy into activities that will improve their
social conditions and their communities such as the establishment of education and health centers.
Businesses are moved to engage with communities as an aspect of reputation management and
corporate citizenship. As communities become more self-reliant, the cost of further engagement
decreases over time. This means that as communities become more empowered, businesses
would be able to minimize costly philanthropic activities and engage with communities on more
business-oriented terms.

41

d. Corporate Interests as Drivers

According to Luz, BCR is internally driven by individual managerial behavior — that BCR is an expression
of an “enlightened self interest.” Increasingly, however, leadership companies have seen the importance of
operational efficiencies as the driver for BCR and very few have taken this further to the level of strategy.

Luz added that an understanding of what drives change in BCR behavior can be derived on at least three
levels:

• If regulation were the primary driver, then the BCR effort is significant only up to the level of
compliance – paying the mandated minimum wages, paying the right taxes, complying with the
letter of the law.

• If individual behavior were the driver, then BCR conforms with the individual’s view of what
constitutes integrity as far as responsible management is concerned.

• In most cases and in most companies, external demands are the driver. Reaction or response
about this aspect has been limited. Over time, however, prescient business leaders have looked to
the internal drivers as a way to take control over such external factors and to be proactive in their
approach to BCR.12

12
Ibid.

42


3. Emerging Models of BCR

There are three emerging models of BCR in the Philippines: Systems Thinking Model, Business Excellence
Model and Business Case Model.

a. Systems Thinking Model

As an expression of corporate social responsibility, business-community relations has been a “professional”
practice in the Philippines since the mid-1980s (although some companies with company towns have
been known to do it since the turn of the 20th century mostly to take care of its personnel).

In the early 1990s, a call for industry community relations standards led to the formation of the
National League of Community Relations Practitioners (NLCRP).13 In 1997, PBSP and NLCRP produced
a systematic framework of “comrel” practice that takes into account the unique role of “comrel”
practitioners as mediators between their companies and communities. It was the first attempt to
professionalize the practice through the installation of systems thinking. The developed framework
(see Figure 4) takes both inward (i.e., management) and outward (i.e. community) perspectives. The
entries located within the diamond denote the higher option that “comrel” practitioners can take and
those pointing outward as the minor options that can be taken.

The major limitation of this model is the implication that only management can decide how it can
value a community, and that “comrel” practitioners must find a way for their activities to be aligned
to business in order to ensure sustainable support. It does not seek to explain how a community is
valued by a company, or what influences business strategy. More importantly, it fails to show what,
how and who influences business strategy, such as how external players can stipulate necessary
elements of an operation, thereby directly influencing business strategy.

13
Juan Miguel Luz, A Handbook for Community Relations Managers, Philippine Business for Social Progress, 1997.

43

Figure 4: Framework of Community Relations vs. Communities and Company Management14

PART of Business Strategy NOT Part of Business Strategy

Comrel unit as an “Agent” “Personal emissary”
Relatively Autonomous Strongly Aligned

for the company Comrel unit serves
to carry out
management’s
Organizational Relationship

wishes
Creates new Comrel vehicle
role for comrel for a new vision for
within mainline business the company

Innovator Comrel to be Pathfinder/
(New assumptions Breaking new ground
to the business) (New models, new
Comrel
theories)
stretches
Business so
far from mainline Ad hoc/
(potential conflicts with Reactionary comrel
mainliners)

PART of Business Strategy NOT Part of Business Strategy

Business considerations Treated as a special
overshadow Comrel project (could be
Stakeholder
Relationship with the Community

considerations isolated from
Major

mainstream)
Non-business
Access to considerations important
resources + mutual benefit for company as a whole
Stakeholder/Public

Favorable results make
community a major Ad hoc program/projects
NOT Major

public (maybe important to individuals
but not to company as
Business an organization)
overrides
community-relations

14
Juan Miguel Luz, A Handbook for Community Relations Managers, Philippine Business for Social Progress, 1997.

44


b. Business Excellence Model

Realizing that “comrel” is actually part of a larger stakeholder engagement practice by business, several
models have surfaced that attempt to put a systematic face on this aspect. The European Foundation for
Quality Management (EFQM) and British Quality Foundation (BQF) Business Excellence Model (See Figure
5: The Business Excellence Model) integrates a company’s impact on society as a key element of business
process, and it is a widely recognized quality standard. It is consistent with quality principles of
environmental and social performance - criteria springing from the concept of Triple Bottom Line.15

Figure 5: The Business Excellence Model

Leadership People Processes People Business
Management Satisfaction Results

Policy & Customer
Strategy Satisfaction

Impact on
Resources Society

3 Enablers 43 Results 4

Business Results

The Business Excellence Model is a tangible framework for assessing the degree of excellence in an
organization. It contains nine elements (referents) identified as key components of business excellence
and served as basis for giving quality awards in Europe. In the Philippines, such model is used to award
those who comply with industry standards such as environmental standards, ISO 9001, etc.

15
Triple Bottom Line is the sustainability concept (i.e., economic profitability, social equity and environmental sustainability)
promoted by SustainAbility and John Elkington.

45

Business Excellence Model Process Stage Quality Principles
referents
Enablers Leadership Policy & Issue Identification Core corporate values &
Strategy policies
Completeness
People Management Stakeholder
Resources consultation Inclusiveness
Dialogue
Processes Management &
Information systems Integration &
Embeddedness
Evolution
Results People Satisfaction Measurement
Customer Satisfaction Quantitative & qualitative
Impact on Society Comparability
Business results Differentiation

Innovation & Developing action
Learning plans Continuous improvement

Business Results Reporting
External verification

The limitation of the model is that it encourages compartmentalized thinking,16 even though the
model was meant to be integrative. “Compartmentalization” is still a prevalent practice where structured
organizations are necessary in order for business to actually function. As more and more aspects of business
either are sourced from or become exposed to communities, it becomes apparent that stakeholder
engagement is something that must be integrated into several aspects of business. This means that as a
business function, community relations can be a tool in various aspects of business operations, regardless
of sector or industry.

16
Business in the Community, Business in Society: Assessing the Impact, 1998. p. 22

46


c. The Business Case Model

Businesses in post-World War II Philippines operated under the vacillating influence of both laissez-
faire market-capitalism and the welfare state.17 Social responsibility was heavily influenced by other
institutions as well, such as the Roman Catholic Church and the extended family. As such, the BCR
orientation of businesses and governments were in line with capitalist and welfare state paradigms.

These CSR paradigms placed greater emphasis on impacts to society and placed little relevance to impacts
on business or the business case. Surprisingly, the actual improvements of these activities to society had
not been fully explored. This deficiency of strategy and accountability of all stakeholders involved has
entrenched a view in business that social responsibility is, at times, an expendable cost center. The
impetus for business activity is results, whereas most other stakeholders such as government and civil
society are more driven by the motivation behind those results. Strategies that accommodate both drivers
could be more effective in defining social responsibility roles.

As the margins of engagement move from mere regulatory compliance to a highly proactive developmental
stance, business is also in a position to demand from other sectors delineation in roles. One of the key
factors in community development that meshes well with the benefits-orientation of business is the
asset-based community development (ABCD) approach. The key feature of the ABCD approach is that
communities drive the process of development through the identification and mobilization of often-
unrecognized social assets. The objection its developers have over needs-based development (which is the
prevalent practice of governments, civil society and business) is that needs-based development creates
dependency — a donor-benefactor relationship — between developers and impoverished communities. In
essence, the ABCD approach inherently looks at communities as stakeholders and partners for their own
development where corporate-community partnerships can be forged. With this approach, resource-
strapped government and dependency-wary business can engage communities knowing that it would be
beneficial to all involved.

The integral power of government lies in its ability to wield prescriptive policies that no business can
successfully ignore in the long term. These prescriptions provide an environmental framework for businesses
to act in a community, for socially responsible corporate behavior. Many contest these regulatory options
as contrary to the voluntary nature of corporate citizenship, thus minimizing the effectiveness of corporate
citizenship as a competitive strategy. However, regulation is still one of the most effective options granted
to communities and civil society in the developing world for the universal implementation of appropriate
development practices.

17
David Logan, Global Corporate Citizenship-Rationale and Strategies, 1997.

47

Previously such regulatory sanctions were considered as additional costs to business in developing
countries. However, as corporate citizenship becomes a standard for competitiveness in developed
countries, it becomes clear that it is also within the government’s mandate to promote and ensure
responsible business behavior in the country (ergo, citizenship). For example, the United Kingdom is
the first country in the world that has a Department of Corporate Social Responsibility lodged in its
Ministry of Trade & Industry.

As the world of business grapples with issues of sustainability and how it could possibly impact the
bottom line, government and civil society are developing means of quantifying impacts that previously
had only been noted as “smiles in glossy pictures.” SustainAbility has pioneered the concept of the Triple
Bottom Line, where business does not only have an economic bottom line, but also social and environmental
bottom lines. This has precipitated the concept of the “business case” for social involvement and as a
movement it is gaining momentum worldwide, as exemplified by the UN’s Global Compact. This trend
provides the direction for governments and civil society to work with the private sector. (It is not the
purpose of this section to provide a comprehensive guide for developments in corporate citizenship, but
only to highlight specific developments that directly relate with and affect the cases in focus.)

As the corporate citizenship movement progresses alongside enhanced community development and
globalization, it is safe to assume that business-community relations can become equitable partnerships
through changes not only within business, but also within the community, government and civil society.

4. Quality of Stakeholders Engagement

Besides the emerging models of BCR, there are two other models of engaging with BCR stakeholders.
These two models are the partnership strategy model and the stakeholders relations model.

a. Partnership Strategy Model

The partnership strategy is considered the most “evolved” paradigm for engagement as it is founded on
mutual respect, understanding and agreement as well as equitable (as opposed to equal) sharing of benefits
and risks among all players, including business. It stands as the most effective means of ensuring
development since it encourages ownership and commitment among all partners. In an environment
where these aspects are not present and cannot be introduced (for instance, where there are unresolved
ideological conflicts), a partnership may not immediately ensue but can develop and emerge once conflicts

48


are resolved. In an environment where these aspects are lacking but can be acquired, building the
capacities of all potential partners to equitably share risks becomes part of the partnership strategy.
Institutional partnerships claim broad gains. However, specific gains that would serve as impetus for
business to be involved are often identified as merely “the potential to earn alternative attractive
returns on their investment.”18 It is left solely to business to identify gains from the partnership,
but, more often than not, business is not expected to seek returns in the quantifiable manner that it
is used to.

Multi-sectoral, also known as tri-sectoral, partnerships in development often refer to the confluence
between business, the public sector and civil society, and are designed to solve particular problems. This
is also known as a convergence of primary stakes. The chart below (Figure 6: Tripartite Partnership) shows
a non-exhaustive list of specific kinds of stakeholders within these groupings.19

Figure 6: Tripartite Partnership

Tripartite Partnerships*
* Symbol taken from the PPPUE diagram on partnerships, stakeholder types from Guiding Hand

Government Business
National Government, Federal States, National and International Formal &
Municipalities, Educational/ Informal Enterprises, Business
Academic Institutions, International Associations, Enterprise Dev’t.
agencies, National & Local Agencies, Financial Institutions,
Governments, Public Sector services, International companies, Joint stock
QUANGOS (quasi-autonomous non- companies, National Companies,
governmental organizations SMMEs (Small, Medium & Micro
Enterprises)

Civil Society
Communities, Research Centres, Educational/
Academic Institutions, Campaign groups, Community-
based organizations, Donor agencies, Labor
organizations, NGOs, Private voluntary organizations,
Religious institutions

18
Public-Private Partnerships for the Urban Environment (PPPUE) Facility Brochure, 2000
19
Tennyson, R. and Wilde, L. THE GUIDING HAND: Brokering partnerships for sustainable development. United Nations Staff
College and The Prince of Wales Business Leaders Forum, 2000. Symbol from the PPPUE Facility.

49

Yet “partnership” has become a highly abused term. Any form of multi-sector engagement has
come to be labeled a partnership despite the lack (or ill-preparation) of mutually and equitably
agreed upon aspects like benefits and risks. (See Figure 7: Social Engagement Framework)

Figure 7: Social Engagement Framework

Business

Partnerships

State Civil
Society

Community/
Society

b. The Stakeholders Relations Model

The term “stakeholders” has generally come to mean parties that would either be impacted or have an
impact on a particular activity and/or party. This implies that stakeholders are not just parties that can
affect one activity or party, but can also be impacted on. This dichotomy gives rise to the argument that
the term “stakeholders” is only a politically correct label for a beneficiary. The new term denotes that
parties included or involved in an activity are recognized as co-equal in participation and decision-making,
risks and benefits, despite unequal resource endowments.

Stakeholders impact each other, often in ways that may not be captured as a primary stake (with reference
to an agenda) in a partnership. The implication is that there is a larger basis for the partnership aside from
the confluence of primary stakes. Operationally not all these impacts will set the basis for partnership,
hence the persistence of the beneficiary approach. However, this does not mean that this “larger basis”
will not affect the partnership.

Often, when business and public sector-led partnerships take a beneficiary approach to partnerships, they
do so because of the perceived high costs of instituting and maintaining a genuine stakeholder approach,

50

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