Corporate Social Responsibility and Emergent Models in Management of Stakeholder Capital in Philippine Conglomerates
Serafin D. Talisayon
Fifth International Research Workshop on Asian Business Singapore Management University, Singapore 13 April 2009
The paper adopts a social benefit-cost analysis framework to look at three stages in the historical development of management of stakeholder capital of corporations in the Philippines. The first two stages were government-driven. Stage One is internalization and moderation of some social costs starting with the Environmental Impact Statement System adopted by the Philippine government under President Marcos in 1981. Stage Two consists of reforms in the political economy started in
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Stakeholder capital is the quantity and quality of a firm’s external relationships that result to value creation and business success, e.g. formal and informal relationships not only with customers but also with employees, suppliers and external consultants, partners, franchisees/franchisor, government as well as communities and publics affected by the operations of the business. Stakeholder capital is built on trust and confidence on, and reputation of, the corporation. Brand is part of stakeholder capital. A formal relationship such as a franchise agreement is another example of stakeholder capital. Corporate executives and corporate planners exhibit different levels of appreciation of stakeholder capital. Many corporations are serious about managing their stakeholder capital although they do it under different management labels: customer relations management, community relations, public relations, brand management, business development, account management, marketing, government relations, corporate social responsibility, etc. On the other hand, there are executives who ignore stakeholder capital until an external issue arises that visibly affect or threaten corporate profits. A social benefitcost analysis framework5 (see Diagram 1) shows why this happens. Environmental and social costs are externalities; they are costs that are external to a firm’s accounting system. As such, they are normally not factored in enterprise decision making.