Multinational companies are inevitably key cogs in modern society, but they can often give the sense that they stride above rather than integrate into the societies in which they operate. Research from HEC Paris explores how multinationals engage and interact with civil society, both in a conflictual sense and a cooperative sense.
The former are perhaps more commonly known as they often generate the most publicity. For instance, the researchers cite the example of Royal Dutch Shell’s operations in apartheid era South Africa, which led to considerable protests against the company. Collaborative examples are no less frequent, however, with the authors citing examples such as The Body Shop, which regularly collaborate with NGOs and trade unions.
Collaborative interactions are obviously beneficial, as they not only help companies avoid reputational damage, but also help society to achieve broader goals, such as bolstering labor rights or protecting the environment.
Limited understanding
The paper explains that much of our understanding of the relationship is through the lens of resource-intensive industries, where civil society activism tends to be more pronounced. This shouldn’t blind us to the importance of relations with civil society in other sectors, however.
The authors suggest that the best approach is for multinationals to be proactive in their engagement with civil society rather than reactive. This is especially so if their operations are likely to have a significant environmental or social impact. By working with local stakeholders, companies can understand their concerns and ward off any potential conflicts.
This can often be best achieved by working with NGOs, which the researchers suggest can help to reduce both conflict and public criticism of firms. This is especially important if they’re operating in unstable regions as it can help ensure that the company doesn’t exacerbate existing issues.
This can be especially useful when entering a market for the first time, as companies can work with local NGOs and capitalize on their existing relationships within communities. It’s crucial that companies view these relationships as long-term ones rather than one-off engagements.
Held to account
From the opposite perspective, collaborative relations with companies can help civil society actors hold firms to account and ensure that their social and environmental impacts are as positive as possible. This can involve engaging with the media to ensure sustainable practices are deployed while also raising awareness of broader societal issues.
Partnerships between big companies and civil society groups offer powerful ways to shape corporate behavior and achieve social and environmental goals. By combining their unique expertise and knowledge, these groups can make a real difference in promoting sustainable practices across industries, from renewable energy and plant-based foods to ethical fashion and fair-trade coffee.
Policymakers should recognize the potential of these alliances to spur positive social change. Governments can encourage such partnerships by creating spaces for open discussion, offering tax breaks for social impact programs, and helping to build local NGOs’ capacity. However, officials should also keep an eye on the limits of voluntary partnerships, since some companies might only engage to improve their public image. When needed, regulations or targeted incentives can help ensure that these corporate actions truly serve broader societal goals.
The relationship between big companies and civil society has become a core part of today’s business landscape. Though they often have different agendas and sometimes clash, learning how to support effective partnerships is just as important. Only through cooperation across different sectors can we tackle some of the biggest challenges of our time. Unlocking the potential of these partnerships is essential for meaningful social and economic progress.
