The Pursuit of Responsible Business: Corporate Responsibility of Finnish Companies in Their Global Operations

Abstract

Nowadays, increasing global business operations call for internationally accepted business conduct and socially responsible management. Since there is no over-the-boundary global legislation, the institutionalization of various CR programs and initiatives is challenging for many globally-operating companies. This is true to a few Finnish, globally operating companies, too. Many businesses and policy researchers have been clarifying the global business environment by normative means, such as the development of various corporate responsibility (CR) management programs or initiatives.

This paper looks at some examples of operations of Finland-based companies in six different operation areas to determine the adequacy of national and international CR initiatives in various operation environments and to map out the institutionalization process behind the CR initiatives. The cases were analyzed using the normative ISO 26000 CR guideline interpreted into the Finnish context by the Finnish Corporate Social Responsibility Network (FIBS). The analysis was expanded beyond the Finnish home market, as the major responsibility debate has concentrated on the international operations of large Finnish companies.

The analysis showed that the Finnish business aimed at proactive CR consideration in the studied cases but failed partly in this target due to three reasons; Finnish trust on local legislations and institutions, inadequate base guideline for CR strategies, and inadequate knowledge on local business environment. The work illustrates the diversity of CR challenges within the global business. The strategic CR approach through the standardized and certified core operations creates a basis for legitimate operations both in home and host countries. Profound understanding of local socio-cultural nuances together with large stakeholder consideration and communication strengthens the legitimacy of the operations promoting CR implementation.

ISO 26000 CSR guideline provided a relatively comprehensive framework for the CR implementation, but the detailed revision of the cases indicated the technical-social social focus of the ISO criteria set. The environmental issues covered well energy, recycling, and clean technology issues, but the case studies showed the relevance to complete the guideline with raw material related issues, such as the origin of raw material and sustainable and equal governance of natural resources. Furthermore, the responsibility towards shareholders is recommendable to consider within a common CR-framework in addition to Corporate Governance.

The companies adjusted the operations proactively according to the understanding of the business environment in addition to the reaction on the business challenges, such as land tenure debate or employee arrangements in the context of production unit closing. A few clues indicated the recognition of the strategic potential of CR practices to produce indirectly benefits, such as good reputation, efficient management through standardized practices, and brand strengthening.