Let’s face it, a company cannot do CSR if it is not in good financial position. That is why we see businesses linking their CSR programs with their core business and supply chain to meet both their obligations to their shareholders while practicing sound social responsiveness to the community and the people surrounding the business. Today, it makes more sense for a business to be socially responsive rather than just dole out material benefits. In the end, a strategically embedded CSR program can effectively create reputational benefits and ethically obtained profits.
However, a dilemma arises when big multinational corporations decide to implement a CSR program in countries of operation. What happens when a foreign company invests locally and what kind of CSR strategy could be pursued vis-à-vis local context? An accompanying communications strategy for the firm’s CSR program becomes crucial when the considerations go beyond than just business practices and legal compliance. The communication strategy must also be sensitive to the social, political and even cultural contexts of the host country. In today’s article, I’d like to introduce a few concepts on Filipino psychology and how they could be applied to corporate communications vis-a-vis CSR implementation.
CSR Then and Now
R. Edward Freeman sparked the stakeholder theory discussion in his book Stakeholder Approach to Strategic Management (1984) and this definition is most often quoted in CSR discussions: “[Stakeholder] is any group or individual who can affect or is affected by the achievement of the organization’s objectives.” Since then CSR activities emerged as instruments that will either make stakeholders simply happy with the firm’s good behavior or will be used as a vital component of the overall corporate strategy to produce better corporate performance. Companies practice CSR because satisfied customers and happy stakeholders are desirable ends. Other firms practice CSR because it is a moral duty asked of them in a society of wants. Businesses are placed in a position of power and affluence and failure to seize this opportunity to do good could result in losing this position. CSR today then seeks to achieve an end goal that is beyond the economic and technical interests. We now see the development of CSR as a central component in the policy formulation process and not just an incidental activity added to the firm’s profit-maximizing goals. The orientation of CSR has changed from that of obligation and responsibility to that of responsiveness.
A business is well advised not to jump into the bandwagon of the CSR fever. A truly effective CSR program is one that has assessed the areas of need where the company is in the best position to help, identified the key stakeholders and linked the CSR prerogative to the business imperative. As often the case of a closely connected global village, the activities of multinational companies can now be scrutinized easily. Obviously, there is a gap between the regulatory environments of the country of the mother company and that of the host country of the subsidiary. The United Nations Research Institute for Social Development (UNRISD) gathered CSR research with special focus on the new agenda of CSR and development. The realization that was reached in that conference was that the prevailing neoliberal policies have created a lopsided situation wherein transnational corporations were benefiting much from operations in the developing world without assuming commensurate responsibilities or returning obligations. For example, in the Philippines and South Africa, research on the food and beverage sector has shown that the CSR agenda ignores key issues to do with food security, ethical marketing, nutrition and consumption patterns.
CSR in the Philippines
The bayanihan spirit, the symbolic value of a community acting together to help its members, best captures the essence of Filipino generosity. Pakikipagkapwa (a shared sense of humanity), pagtutulungan (mutual aiding), and kawanggawa (charity) are cultural traits that tend to underlie Filipino philanthropy.
After World War II, public rehabilitation organizations were formed to support the rehabilitation of war-torn cities and to aid philanthropic groups. In the 1950s and 1960s, private philanthropy gained more prominence as wealthy individuals and corporations began spearheading fundraising activities and campaigns, complementing the work of the Church and government. By the early 1970s, efforts to coordinate philanthropic activities resulted in the creation of aggrupations like the Philippine Business for Social Progress (PBSP) and Association of Foundations.
The dictatorship of the Marcos regime in the country from 1960s to 1980s has exposed the inefficiency of the government to provide for the welfare of the people. By the time the regime was ousted in 1986, half of the country was living in poverty. The environmental degradation has been rampant and the national coffers were decimated leaving nothing for the newly installed democratic government to stimulate economic recovery. It was during this period that focus was turned to civil society and non-governmental organizations (NGOs) to fill in the void of the socio-economic development agenda.
Today, the Philippine Government has a poverty alleviation program, and recently an environmental agenda. Most of the country’s developmental goals are hinged on the United Nations Millennium Development Goals and the resulting policy that came after the ratification of the Kyoto Protocol, which provided companies avenue to pursue climate change related CSR activities. Another important area worth mentioning is the effort on conflict resolution in the southern part of the Philippines where Filipino Muslim minorities have been affected by the war on terrorism. The poorest province can be found there and the quality of life is ranked lower compared to the other regions of the country. The business sector is expected to take a more hands-on role in nation building. Hence, businesses need to integrate with society more meaningful and one way of doing that is through CSR.
CSR Practices in the Philippines
Figaro Coffee: Saving Local Farmers
The Philippines was historically one of the world’s top producers of coffee, with export earnings of at least US$150 million before 1986. However, the situation started to decline in the 1990s until only 500kg per hectare can only be produced. This change affected 60,000–80,000 coffee families, the majority of which are small farmers. Demand had fallen because of imported Arabica and large-scale domestic production of Robusta by large corporations. In 1998, the Figaro Coffee Foundation was formed to boost Filipino coffee production, particularly Barako, the indigenous liberica coffee species grown in the southern regions of Luzon Island. The company’s view of its community has subsequently expanded from its consumers to the farmers that produce its products. While the task of rehabilitating the local coffee industry and saving the Barako remain challenging, Figaro and its various partners have developed the right channels and networks to solidify and integrate their efforts as a collective unit making longer-term success achievable.
The ‘Save the Barako’ cause has somehow given the coffee added value as portion of the bean sales is channeled back to into a project to promote the revival of the Barako. The project encompasses awareness programmes, new plantings, research, and targeted marketing, and is coordinated with the Figaro Coffee Foundation. The waning supply of Barako beans prompted the company to be more aggressive in securing supplies. The ‘Save the Barako’ campaign is its showpiece effort, and has earned the company a reputation as a company that cares for the coffee farmer. More than just to sustain its core product or core business, Figaro has become the trailblazer on how ‘out of the box’ ideas can be used to encourage farmers to plant the Barako again, motivate local governments to do their part and get cooperatives working toward one goal.
Food Wrapped In A Leaf: The Story of Binalot
The Philippines is a culture of tradition. Its colorful and vibrant traditions are a product of many influences. Three hundred years of Spanish colonization inspired the local food and fiesta culture. The most popular form of public transportation is the Jeepney, an adapted military jeep left behind by the Americans after World War II. It was from this idea that the business of Binalot was created – a company that is both socially responsible and culturally sensitive. Binalot wanted to recreate and reintroduce a lost piece of Filipino culture to modern urban dwellers. The company also wanted to make Binalot the number one fast-food chain in the Philippines by promoting Filipino humor, values, and culture. Binalot started serving food to its customers the traditional way—wrapped in banana leaves.
As the business grew, its founders realized that there was another, equally important purpose behind the business. What is uniquely Pinoy (slang for Filipino) is the practice of hospitality, that sense of community, and the strong belief that each is responsible for one another. In most villages, banana farmers earnings barely afford them the necessities of life. This led to creation of the Binalot Foundation to help farmers find diverse uses for the banana, such as making flavored banana chips or finding a bigger market for the banana flower as a vegetarian delight. The result was the Binalot DAHON community. DAHON is an acronym for Dangal at Hanapbuhay para sa Nayon, which means “Livelihood and Dignity for the Rural Community.” Under its CSR program, the company has helped the farming community by getting banana leaves direct from the farmers to eliminate the middlemen, and teaching the village women to cut and pack the leaves, which provides jobs. Soon, the women became more skilled and could finish the job in ninety minutes, and their rate of pay rose significantly. They also trained villagers to make banana chips, which were sold in Binalot stores, giving them another source of income. Binalot buys all the harvests from these communities, ensuring their market and income, and in turn, building a happy supply chain partner.
Filipino Psychology vis-à-vis CSR
From the cases of Figaro and Binalot, one could observe the cultural underpinnings that drove both companies’ CSR programs. CSR itself should be seen in socio-cultural terms aside from political economy settings. Communicating the CSR policy and activities of a transnational company would certainly require ample understanding of Filipino psychology if the message must be transmitted and interpreted properly.
According to Virgilio Enriquez, the Father of Filipino Psychology, Sikolohiyang Pilipino is defined as ‘‘the study of diwa (‘psyche’), which in Filipino directly refers to the wealth of ideas referred to by the philosophical concept of ‘essence’ and an entire range of psychological concepts from awareness to motives to behavior.” It is based on assessing historical and socio-cultural realities, understanding the local language, unraveling Filipino characteristics and explaining them through the eyes of the native Filipino. These resulted in a body of knowledge, which includes indigenous concepts and methods. This particular field of study is thus designed to be a psychology of, for, and by Filipinos, one appropriate and applicable to dealing with health, agriculture, art, mass media, religion, and other spheres of everyday life.
The values within Filipino Psychology
Filipino Psychology locates the identity of the individual in terms of the web of his social relations. For instance, the experience may be a response to colonial oppression (Philippines was a colony of Spain for 300 years, USA for 30 years and Japan for 3 years during the occupation). In terms of areas of protest, Sikolohiyang Pilipino is against a psychology that perpetuates the colonial status of the Filipino mind. It is against a psychology used for the exploitation of the masses. Hence, CSR programs must treat community members as partners and not as passive recipients of dole outs.
Enriquez and his school of thought unfolded the concept of kapwa (shared identity), which is at the core of Filipino social psychology, and which is at the heart of the structure of Filipino values. He discovered that it is not maintaining smooth interpersonal relationships that Filipinos are most concerned with, but pakikipagkapwa, which means treating the other person as kapwa or fellow human being. In this realm, the Filipino views someone as ‘outsider (ibang tao) and ‘one of us’ (hindi ibang tao). Understanding the nuances of these perceptions will enable the communication of CSR program to be more effective because the rapport will have to be established at a higher level of personal interaction.
Sharpening one’s shared inner perception or pakikiramdam is a particularly desirable skill in many situations involving Filipino social interaction. Pakikiramdam is especially useful in conducting community extension work that may be part of the whole CSR process. If time were allowed to understand the local community’s cultural ways, they would feel comfortable enough to disclose their opinions, knowledge and experiences to the company. How the company is placed in the Filipino stakeholder’s perception determines the level of interaction that will be afforded to it. For example, if one is regarded as ibang-tao, the interaction can range from civility to interaction, conformity or getting along with. If one is categorized as hindi-ibang-tao, then the firm can expect acceptance and being one with the community, which is the desired state of interaction in order to make the CSR program truly effective.
Communicating CSR programs in the Philippines would inevitably focus on the levels of interactions with the local community stakeholders. A certain level of mutual trust, understanding and rapport should be reached, at the minimum, in order to be assured of harmonious relations. The dichotomy of the ‘‘one of us’’ and the ‘‘outsider’’ categories reflects a value for defining membership in a group which determines the boundaries or the extent by which the dimensions of the CSR program should take its effects. As a general rule, the firm needs to explore the meaning and experience of business-community relations at the local level, giving importance to the Filipino’s aspirations as a people. Knowing what kind of citizenship the firm will assume will determine greatly the CSR path it will pursue in the host country. Tapping into the wealth of those values in the Filipino psyche becomes useful when analyzing the multiple claims or interests that stakeholders hold while matching the citizenship role that the firm intends to assume.
To serve the company’s strategic business thrusts, CSR must be rooted in the nature and demands of its operations and reconciled with the needs and expectations of the stakeholders. Creating solid partnerships with stakeholders, most especially with the community, enhances the success of any CSR program. Working beyond what is required will do a lot of wonders for both company and stakeholders. Although laws and regulations dictate that the firm must comply, going the extra mile will provide added business security in the long run.
In the Philippines, there is a big opportunity for the government to harness business enthusiasm for CSR to achieve its goal of improving the quality of life of poor Filipinos. Right now, what needs to be done is to identify, and strengthen, CSR priorities and incentives that will work in the Philippine context. With the ongoing crisis in corporate capital that resulted in more and more Filipinos towards poverty, there is good reason to agree that society needs CSR now more than ever. The business sector, as the country’s economic prime mover, could also be the country’s driving force in effecting a timely and relevant social change. It’s time to walk the talk and take the big CSR leap. This then should be the driving force for doing CSR in the Philippines. One simply has to recognize, appreciate and emphasize the indigenous elements and rethink the foreign formula of CSR and put them in the context of the Philippines as a country of strong values. What is important is the positive impact that CSR will create in solving the problems in Philippine society.