Towards an understanding of corporate citizenship and how to influence it

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Abstract
Companies are in effect citizens of the countries where they operate and increasingly, with globalising markets, of the world. The potential positive environmental and social contribution of companies is every bit as great as their potential for harm. Good corporate citizenship is about understanding and managing an organisation's influences on and relationships with the rest of society in a way that minimises the negative and maximises the positive. The importance of the effective management of a company's citizenship performance is growing both for itself and society as a whole. There are a number of forces based on self‐interest and mutual advantage, in addition to ethical values which underpin any civilised activity, which if better understood and harnessed, can be used by company managers and stakeholders to enhance the positive contribution and lessen the negative. The key to this is the development of an effective ‘reputation market place’ which relies on the creation of countervailing power to balance that, particularly, of multinational companies. The main source of this power is coming from the emergence of campaigning non‐government organisations (NGOs). The article argues that companies will increasingly need to manage their citizenship performance in order to maintain and grow competitive advantage, that NGOs need to learn how to combine pressure with collaboration when engaging companies in addressing solutions to major environmental and social problems and, finally, that business schools should take more account of this new phenomenon in their research and teaching programmes.

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