Vol. I (2020), No. 2
THE IMPACT OF CORPORATE RESPECT FOR HUMAN RIGHTS ON THE COMPETITIVENESS AND LONG-TERM BUSINESS STABILITY
Ana Certanec https://orcid.org/0000-0001-7676-6983
University of Ljubljana, Slovenia
Original scientific article
JEL Classification: K38, L25, M14
Business enterprises operate in a constantly changing business environment. If they are to be successful in the long term they need to be constantly adapting to new situations and seeking new ways of improving their competitiveness. While the classic theories argue that businesses only have economic goals, modern ones emphasise the importance of broader social goals, such as ensuring long-term stability and protecting the interests of all stakeholders. This also involves respecting human rights but enterprises too often neglect this responsibility, seeing it as an unnecessary financial burden. In this paper the author will argue that long-term respect for human rights has a positive impact on competitiveness and long-term business stability. The author will first define the basic terms before presenting the theoretical foundations for a positive correlation between corporate respect for human rights and competitiveness and long-term business stability. Finally, the author will present the results of her own empirical study.
Key words: human rights law, business, competitiveness, corporate respect for human rights, long-term business stability, corporate social responsibility
Ambastha, A. and Kirankumar Momaya, K. (2004) ‘Competitiveness of Firms: Review of Theory, Frameworks and Models’, Singapore Management Review, 26(1), pp. 45-61.
Bertoncelj, A. et al. (2011) Trajnostni razvoj organizacije: ekonomski, družbeno-politični in ekološki vidiki. Ljubljana: GV založba.
Avery, C. et al. (2006) ‘Why all companies should address human rights – (and how the Business & Human Rights Resource Centre can helpʼ in Hennigfeld, J. et al. (eds.) The ICCA Handbook on Corporate Social Responsibility. 1st ed. Chichester: Wiley, pp. 69-98.
Barcelona Panda, B. (2013) ‘Multinational corporations and human rights violations: Call for rebuilding the laws of twenty-first century’, Journal of Financial Crime, 20(4), pp. 422-432.
Buhmann, K. (2011) ‘Integrating human rights in emerging regulation of Corporate Social Responsibility: the EU case’, International Journal of Law in Context. 7(2), pp. 139-179.
Campbell, T. (2006) ‘A human rights approach to developing voluntary codes of conduct for multinational corporations’, Business Ethics Quarterly, 16(2), pp. 255-269.
Chand, M. and Frase, S. (2006) ‘The Relationship between Corporate Social Performance and Corporate Financial Performance: Industry Type as a Boundary Condition’, The Business Review, 5(1), pp. 240-245.
Cragg, W. (2012) ‘Ethics, Enlightened Self-Interest, and the Corporate Responsibility to Respect Human Rights: A Critical Look at the Justificatory Foundations of the UN Framework’, Business Ethics Quarterly, 22(1), pp. 9-36.
Čater, T. (2007) ‘Dejavniki konkurenčne prednosti in uspešnosti podjetja’, Naše gospodarstvo, 53(1/2), pp. 18-27.
Čertanec, A. (2015) Varstvo človekovih pravic pri delovanju gospodarskih subjektov po Smernicah Združenih narodov. PhD Thesis. University of Ljubljana, Slovenia.
Čertanec, A. (2019) ‘The connection between corporate social responsibility and corporate respect for human rights’, DANUBE: Law and Economics Review, 10(2), pp. 103-127.
Deardorff, A.V. (2014). Terms Of Trade: Glossary Of International Economics. 2nd ed. Singapore: World Scientific.
Deva, S. (2003) ‘Human Rights Violations by Multinational Corporations and International Law: Where from Here?’, Connecticut Journal of International Law, 19(1), pp. 1-57.
Emeseh, E. and Songi, O. (2014) ‘CSR, human rights abuse and sustainability report accountability’. International Journal of Law and Management, 56(2), pp. 136-151.
European Commission (2011) CSR: A renewed EU strategy 2011-14 for Corporate Social Responsibility, COM (2011) 681, 25 October 2011.
Frankental, P. and House, F. (2000) Human rights: Is it any of your business? Amnesty International UK & The Prince of Wales Business Leaders Forum [Online]. Available at: www.amnesty.org/download/Documents/HRELibrary/sec010222008eng.pdf (Accessed: 15 May 2019).
Friedman, M. (1970) ‘The social responsibility of Business is to Increase its Profits’, N.Y. Times, 13 September, pp. 122-126.
Gugler, P. and Shi, J.Y.J. (2009) ‘Corporate Social Responsibility for Developing Country Multinational Corporations: Lost War in Pertaining Global Competitiveness?’, Journal of Business Ethics, 87, pp. 3-24.
Hillman, A.J. and Keim, G.D. (2001) ‘Shareholder Value, Stakeholder Management, and Social Issues: What’s the Bottom Line?’, Strategic Management Journal, 22(2), pp. 125-139.
HM Government (2013) Good Business – Implementing the UN Guiding Principles on Business and Human Rights [Online]. Available at: www.gov.uk/government/uploads/system/uploads/attachment_data/file/236901/
BHR_Action_Plan_-_final_online_version_1_.pdf (Accessed 15 May 2019).
International Organization For Standardization (2010) ISO 26000 ‒ Guidance on social responsibility [Online]. Available at: www.iso.org/iso-26000-social-responsibility.html 2010 (Accessed 15 May 2019).
Italian Government (2013) The Foundations of the Italian Action Plan. Available at: business-humanrights.org/sites/default/files/media/documents/foundations-ungps-nap-italy.pdf (Accessed 15 May 2019).
Jaklič, M. (2005) Poslovno okolje podjetja. Ljubljana: Ekonomska fakulteta.
Juholin, E. (2004) ‘For business or the good of all? A Finnish approach to corporate social responsibility’, Corporate Governance, 4(3), pp. 20-31.
Kinley, D. and Junko Tadaki, J. (2003-2004) ‘From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations at International Law’, Virginia Journal of International Law, 44(4), pp. 931-1023.
Korže, B. (2006) ‘Do takeovers downgrade the contents of human rights and freedoms in EU?’, The IPSI Bgd Transactions on Advanced Research, 2(1), pp. 51-60.
Korže, B. (2013) ‘The significance of the implementation of human rights in the functioning of economic operators for the prevention of the causes of economic and broader social crisis’, Lex Localis, 11(3), pp. 255-270.
Korže, B. (2014) ‘Obligations of the social market state and business enterprises according to the EU guiding principles’, International Journal Of Business and Public Administration, 11(2), pp. 1-22.
Kranjc, V. (2006) Gospodarsko Pogodbeno Pravo. Ljubljana: GV založba.
Lampe, R. (2010) Pravo človekovih pravic: sistem človekovih pravic v mednarodnem, evropskem in ustavnem pravu. Ljubljana: Uradni list RS.
Letnar Černič, J. (2009) ‘Družbena odgovornost gospodarskih družb’, Pravna Praksa, 9 July, pp. 9-11.
Letnar Černič, J. (2011) ‘Corporate Human Rights Obligations: Towards Binding International Legal Obligations?, Dignitas, 49/50, pp. 55-104.
Lowell, B.L. (2007) ‘The New Metrics of Corporate Performance: Profit Per Employee’, The Mckinsey Quarterly, 1 February, pp. 57-65.
Macmillan Dictionary (n.d.) Stability [Online]. Available at: www.macmillandictionary.com/dictionary/british/stability (Accessed 15 May 2019).
Makni, R. et al. (2009) ‘Causality between Corporate Social Performance and Financial Performance: Evidence from Canadian Firms’, Journal of Business Ethics, 89(3), pp. 409-422.
McCorquodale, R. (2009) ‘Corporate Social Responsibility and International Human Rights Law’, Journal of Business Ethics, 87(2), pp. 385-400.
Mcbeth, A. (2010) International Economic Actors And Human Rights. 1st ed. Milton Park (Abingdon), New York: Routledge.
McWilliams, A. and Siegel, D. (2001) ‘Corporate Social Responsibility: A Theory Of The Firm Perspective’, Academy of Management Review, 26(1), pp. 117-127.
Ministry of Foreign Affairs of the Netherlands (2014) National Action Plan on Business and Human Rights [Online]. Available at: www.business-humanrights.org/sites/default/files/documents/netherlands-national-action-plan.pdf (Accessed 15 May 2019).
Monshipouri, M. et al. (2003) ‘Multinational Corporations and the Ethics of Global Responsibility: Problems and Possibilities’, Human Rights Quarterly, 25(4), pp. 965-989.
Muchlinski, P. (2001) ‘Human rights and multinationals: is there a problem?’, International Affairs, 77(1), pp. 31-48.
Nolan, J. & Taylor, L. (2009) ‘Corporate responsibility for economic, social and cultural rights: rights in search of a remedy?’, Journal of Business Ethics, 87(2), pp. 433-451.
OECD (2011) OECD Guidelines for Multinational Enterprises [Online]. Available at: www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenterprises.htm (Accessed 15 May 2019).
Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. NY: Free Press.
Porter, M.E. and Kramer, M.R. (2006) ‘Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility’, Harvard Business Review, 84(12), pp. 78-92.
Rabet, D. (2009) ‘Human Rights and Globalization: The Myth of Corporate Social Responsibility?’, Journal of Alternative Perspectives in the Social Sciences, 1(2), pp. 463-475.
Robinson, M. (1998) ‘The Business Case For Human Rights’ in McIntosh, M. (ed.) Visions of Ethical Business. London: Financial Times/ Prentice Hall.
Ruggie, J.G. (2013) Just Business: Multinational Corporations And Human Rights. 1st ed. New York, London: W. W. Norton & Company.
Quairel-Lanoizelee, F. (2016) ‘Are competition and corporate social responsibility compatible? The myth of sustainable competitive advantage’, Society and Business Review, 11(2), pp. 130-154.
Sanford, C. (2011) The Responsible Business: Reimagining Sustainability and Success. 1st ed. San Francisco: Jossey-Bass.
Sharp Paine, L. (2000) ‘Does ethics pay?’, Business Ethics Quarterly, 10(1), pp. 319-330.
Soh, C. (2013) ‘Extending Corporate Liability to Human Rights Violations in Asia’, Journal of International and Area Studies, 20(1), pp. 23-38.
Steinhardt, R.G. (2005) ‘Corporate Responsibility and the International Law of Human Rights: The New Lex Mercatoriaʼ in Alston, P. (ed.) Non-State Actors and Human Rights. New York: Oxford University Press.
Stephens, B. (2002) ‘The Amorality of Profit: Transnational Corporations and Human Rights’, Berkeley Journal of International Law, 20(1), pp. 45-90.
Summers, D. (director) (2000) Longman Dictionary Of Contemporary English. 3d ed. Harlow: Longman.
Telesetsky, A. (2015) ‘Beyond Voluntary Corporate Social Responsibility: Corporate Human Rights Obligations to Prevent Disasters and to Provide Temporary Emergency Relief’, Vanderbilt Journal of Transnational Law, 48, pp. 1003-1027.
The Danish Government (2014) Danish National Action Plan [Online]. Available at: www.ohchr.org/Documents/Issues/Business/NationalPlans/Denmark_NationalPlanBHR.pdf (Accessed 15 May 2019).
Van Beurden, P. and Gössling, T. (2008) ‘The Worth of Values: A Literature Review on the Relation between Corporate Social and Financial Performance’, Journal of Business Ethics. 82(2), pp. 407-424.
Van Huijstee, M. et al. (2012) How To Use The UN Guiding Principles On Business And Human Rights In Company Research And Advocacy – A Guide For Civil Society Organisations. SOMO, CEDHA, CIVIDEP India [Online]. Available at: www.somo.nl/wp-content/uploads/2012/11/English-version.pdf (Accessed 15 May 2019).
Vilanova, M. et al. (2009) ‘Exploring the Nature of the Relationship Between CSR and Competitiveness’, Journal of Business Ethics, 87, pp. 57-69.
Waddock, S. and Rasche, A. (2012) Building The Responsible Enterprise: Where Vision and Values Add Value. Stanford, CA: Stanford University Press.
Waddock, S.A. and Graves, S.B. (1997) ‘The Corporate Social Performance-Financial Performance Link’, Strategic Management Journal, 18(4), pp. 303-319.
Waddock, S. (2008) ‘Corporate Citizenship: The Dark-Side Paradoxes of Successʼ in Flynn, G (ed.) Leadership and Business Ethics. Issues in Business Ethics 25. Dordrecht: Springer, pp. 251-268.
Weissbrodt, D (2005) ‘Business and Human Rights’, University of Cincinnati Law Review, 74(1), pp. 55-73.
Wettstein, F. (2009) ‘Beyond Voluntariness, Beyond CSR: Making a Case for Human Rights and Justice’, Business and Society Review, 114(1), pp. 125-152.
World Economic Forum (n.d.) Global Competitiveness Report 2015: Methodology [Online]. Available at: reports.weforum.org/global-competitiveness-report-2015-2016/methodology/ (Accessed 15 May 2019).