In the past, a company only needed to be a blue chip company and offer a competitive salary to have fresh recruits lining up at their doors. Although prestige and salary are still powerful motivators, job-seekers today are beginning to grade potential employers on other factors. One of those factors, rapidly gaining popularity, is how a company practices Corporate Social Responsibility (CSR).

CSR is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.

“the Japanese business environment always had a certain ethic about what the corporation is and how it needs to be responsible to the community and its employees,”
- Samuel Kidder, Executive Director of the ACCJ

The fact is that job seekers and employees from different cultural backgrounds are now becoming increasingly aware what CSR means to them. Several reports recently released highlight the fact that what Japanese consider to be acceptable CSR is slightly different from what Americans and Europeans consider acceptable CSR. What potential and current employees expect from a socially responsible company has now become imperative for HR managers to understand in order to hire and retain a talented multicultural workforce.

CSR Gap between Japan, US and EU

Edelman Japan K.K. (2007), an international public relations agency, released a report on the international comparison of CSR. According to the report, Japanese think the most important issue to be addressed by global companies is “global warming” (79%), compared to 42% in the US and 56% in the EU. 57% of Japanese also think “poverty alleviation” should be addressed, while the figure is 40% in the US. “Security” is also a highly important issue in Japan (50%), whereas in the US, it is 40% and 33% in the EU.

The report also shows factors which destroy trust in companies. The biggest issue in Japan is an “environmental crisis caused by a company” (68%), compared to 37% in the US and 58% in the EU. As can be observed in the recent food scandals in Japan, “defective products/product liability” is also a major issue in Japan (68%), while 55% in the US and 46% in the EU have the same concern.

As any budding economist knows, global companies operate abroad to benefit from economies of scale. Most people, however, view the cost advantage that firms gain in a negative way, associating it with exploitation of the local environment and community. But, unexpectedly, the report shows 72% of Japanese people have a positive image about global companies, compared to 54% in the US and 53% in the EU.

“Industry-driven” CSR in Japan

Fujitsu Research Institute (Ikuta, 2008) recently published a report on CSR practices by Japanese companies in the global market, pointing out different social backgrounds of CSR in Japan, the US and EU.

In the US, CSR has been “market-driven”, which is led by pressures in the market, such as those from consumers and investors on corporate crimes. Hence, compliance, corporate ethics and philanthropy have been playing important roles in CSR in the US.

In EU countries, CSR has been “policy-driven”, which is actively promoted by governments in order to bridge market competition and social harmony. Consequently, diversified stake holders are involved in CSR and diversified CSR management tools have been created.

In Japan, CSR has been “industry-driven.” Business organizations, such as Nippon Keidanren and Japan Association of Corporate Executives (Keizai Doyukai), have created industrial guidelines in order to adapt to global markets based on the Western concept of CSR. While CSR is now seen as an important corporate activity in Japan, the pressure from domestic stake holders within Japanese companies is still weak and the Japanese government is still in its infancy trying to regulate it.

However, do not count Japanese companies out, yet. Japanese companies’ CSR strength, especially in the manufacturing industry, lies in its long-term and close relationships with trade partners and rich knowledge of quality control management.

CSR expectations between employers and employees

While CSR is now becoming a widely shared corporate idea in Japan, a rift has emerged between what Japanese employers and employees see as good CSR.

A Keidanren survey (2008) shows that those in management positions tend to see labor issues as one of the lowest priorities (18.7%), and quality/safety management of product/service as the most important social issue (80.9). Managers, especially corporate executives, tend to see CSR as a tool for improving corporate image and brand, especially in environmental issues. The Japan Trade Union Confederation (RENGO) is the largest trade union organization in Japan, representing the interests of more than 6,000,000 union members (2006). RENGO points out that different perceptions of CSR exist between employers and employees in Japan. RENGO’s report (2007) calls for more communications between employers and employees to discuss the labor relations as part of CSR to protect labor rights in Japan.

CSR as the DNA of an organization

Samuel Kidder, Executive Director of the American Chamber of Commerce in Japan (ACCJ), said in an interview with Japan Today (Jan 25, 2008) that “the Japanese business environment always had a certain ethic about what the corporation is and how it needs to be responsible to the community and its employees,” underlining the need to understand the varying perceptions of CSR in Japan, the US and Europe.

Understanding and implementing localized CSR is becoming more and more important in the global business world. CSR, which is a symbolic concept of the good, is undoubtedly different between Japanese and non-Japanese employees, and companies which realize this trend will be better suited to retain and find new talented job-seekers much better than companies who ignore CSR activities all together.

Reference

Edelman Japan K.K. (2007). “Corporate Social Responsibility: The ‘Make Or Break’ Factor For Corporate Trust in Japan.”
Available online from:
»http://www.edelman.jp/data/ideas/csr.pdf

Ikuta, Takafumi (2008). “CSR supply chain by Japanese companies in the global Market”, Research Report, No,308, January, 2008.
Available online from:
»http://jp.fujitsu.com/group/fri/downloads/report/research/2008/no308.pdf

Japan Today (2008), “Advocating US Business Interests in Japan”, Executive Impact, January 25, 2008.
Available online from:
»http://www.japantoday.com/jp/executive/286

Keidanren (2008). “企業倫理への取り組みに関するアンケート調査結果 （Survey Result on Corporate Ethics）”, February 19, 2008.
Available online from:
»http://www.keidanren.or.jp/japanese/policy/2008/006.pdf

Rengo (2007). “労働ＣＳＲ－労使コミュニケーションの現状と課題 (Labor CSR – State and Issues in the Communication in Labor-Relations)”, NTT Publications.
The abstract is available online from

»www.rengo-soken.or.jp/dio/no215/houkoku_2.pdf