As more companies develop global operations with overseas manufacturing locations, supply chains and new consumer markets, they confront the question of what it means to be a responsible global citizen. How a company answers that question will affect its license to operate and may also add value in terms of new products, greater efficiency and new markets.

In a new research report titled Going Global: Managers’ Experiences Working with Worldwide Stakeholders, The Center provides the perspective of 29 managers from six leading global companies on managing complex and sometimes competing priorities, expectations, and cultural differences that are an essential part of conducting business on a global level today. It also explores the relationship between corporate headquarters executives in the U.S. and managers located overseas.

At the heart of the research are two new realities for today’s multinational companies operating globally:

1) managing social and environmental performance is increasingly part of business management, not something that can be isolated from other management spheres; and

2) stakeholder groups are more complex and broader-based than ever and their interests and needs go far beyond what companies have traditionally addressed.

No longer does being a good citizen simply mean giving something back; today companies are under growing pressure from a variety of stakeholders around the world to generate profits in a fair and responsible manner.  The expectations of these many stakeholder groups can appear contradictory and overwhelming. The research reveals how it is often overseas managers, rather than those at corporate headquarters, who are at the forefront of deciding what gets managed and how. There is no certainty that initiatives and experiences at the coal-face are being fed back into companies’ overall approach to managing its relationships with society.  Nonetheless, the findings show how managers in headquarters and overseas are becoming more sophisticated about identifying, balancing, and prioritizing social and environmental issues.

The research details the challenges managers face and the solutions they are finding.  Funded by the Levi Strauss Foundation, and based on interviews with managers from AMD, Cargill, GE Consumer Finance, Levi Strauss & Co., Nike, and Unocal, the research is probably the most comprehensive description to date of how managing social and environmental performance looks to line managers.

The research report looks at the gaps between what stakeholders expect and what companies are doing, and what managers are doing to narrow these gaps and prioritize where to take action. It shows how companies are trying to develop appropriate management structures and what one manager called a “citizenship mindset” that aligns thinking about societal relationships with managerial planning. It also shows the influence that different types of stakeholder, not the least U.S. consumers and advocacy groups, have on companies and the way this affects how the expectations of the most disadvantaged are addressed.

One overseas manager quoted in the report cautioned about a trend toward adopting international standards as a way of defining and managing corporate citizenship. As one manager said, “We fall into the trap of using culturally biased thinking to try to find out a solution…rather than allowing local communities to come up with solutions which might not necessarily be anywhere close to the realm that we would think of for that particular situation.”

The research project defined “going global” as the nature of doing business and the changing nature of the relationships companies have with society. Ultimately, “going global” redefines what it means to be a good corporate citizen, according to the report.  And an important message is that a company’s values can be as important as any business case when figuring out what to do.  A consistent approach to values presents new challenges for management – especially values linked to issues such as balance of power, conflicting ideals and expectations, consistency, and accountability. The Going Global report shows that there are few fixed answers to how companies should address these challenges, however, it provides many examples of what companies are currently doing. At this time it may be more important for companies to identify the questions that need to be asked than to produce the answers.

Download the complete report, Going Global: Managers’ Experiences Working with Worldwide Stakeholders (subscriber registration required)