Several days ago, I was invited to deliver a speech at a
corporate citizens forum and the organizers asked me to comment on
multinational companies' corporate social responsibility in China.
I agreed happily.
Why happily? Because CSR is a significant part of China's social
progress and a commitment to corporate responsibility from
multinationals is especially anticipated by the public.
The fact that the organizers picked the topic indicates the
focus the whole society has on this topic. China used to treat
multinationals as guests and offered them preferred treatment over
domestic companies.
Now people have begun to see multinationals as part of
society.
The Chinese have a tradition of treating foreigners with
generosity and hospitality, so a guest usually gets better
treatment. But becoming a family member means taking on
responsibility.
Against this background, we have begun to ask multinationals to
consider their social responsibility.
This is not asking too much from them, because they are capable
of doing so. Compared to Chinese private and State-owned
enterprises, multinationals have the power and influence to play a
significant role in helping China's social progress.
Dissatisfaction
To be frank, this expectation from the Chinese reflects their
dissatisfaction about the status quo.
In many donations by multinationals, we see a lot of genuine
willingness to grow with the local community, but they are not
enough. I think multinationals can be more helpful in the following
four areas:
First, multinationals should operate honestly like they do in
their home markets, with the consciousness of a local citizen.
For example, we take many foreign medicines, which have been in
use in overseas markets for many years. But multinationals should
be clear China's healthcare system is quite different from the
Western systems.
So what marketing and sales strategies should multinationals
take and how should they build their sales teams?
This is not just a business activity, it is also an ethical
issue. What I mean by providing products with a citizen's
consciousness is multinationals should be responsible to consumers,
for example offering training and education to doctors on the
proper use of their new medicines.
In this area, multinationals still have room for
improvement.
Some multinational pharmaceutical companies even hide
information or mislead doctors. If we compare the instructions
printed on some medicines in China and in overseas markets, there
are significant differences in wording, completeness, and details
of side-effects.
Second, multinationals should purchase and produce with the
consciousness of a citizen.
As we know, multinationals set up factories in developing
countries in the past in order to get closer to raw materials or
supplies, but this also brought environmental issues.
Now, they outsource problematic issues to local companies. But
this does not stop the pollution and exhaustive exploitation of
local resources. Of course, it is unfair to put the responsibility
of government agencies on multinationals.
But multinationals do have a role to play. Multinationals'
Chinese operations can help reform their suppliers, who generate
profit from the blood and sweat of their laborers.
Third, multinational companies can help build a system of
citizen consciousness. We know China has many problems, such as
corruption. So, operating in such an environment, multinationals
can participate in corruption, or help reduce it, taking advantage
of the systems in their home countries to help the government fight
graft.
Why are they well behaved at home, but in China ignore business
ethics and just chase profits?
Finally, I hope successful multinationals will help set an
example for domestic companies in terms of how to become
influential and respected businesses.
The author is a professor at the School of Economics and
Management with Tsinghua University, and executive deputy director
of the National Center for Economic Research with the
university.
(China Daily January 17, 2007)