Expert View: America's big-hitters must stop playing hardball

A recent Harvard Business School study across 12 countries found that a consistent 13 per cent of the variance in consumer preferences among global brands was down to perceptions of their corporate social responsibility (CSR).

Many of us will pay a premium for a global brand's superior quality or status, but we also expect higher standards of CSR. We are not satisfied with mere cheque-writing philanthropy. We want big companies to use their technology and distribution skills to solve social problems.

And both consumers and governments, especially in emerging economies, know that setting higher standards for global brands benefits societies further by raising the bar for local companies.

European multinationals are leading the way. The likes of Heineken, Shell and Unilever now detail their environmental and social contributions separately from their annual reports. These inform socially concerned investors, motivate employees, reinforce consumer loyalties and neutralise sceptical non-governmental organisations.

Unilever, for example, is reaching the poor of India and Africa through low-cost business models and distribution systems that bring employment and entrepreneurial opportunities to villages, and make money for shareholders too. These consumers may well retain their loyalties to Unilever brands as their incomes rise.

Some US multinationals have been badgered into CSR initiatives. Drug companies have had to lower prices in developing countries. Merck's laudable efforts to eradicate "river blindness" have gone beyond making the drugs available to ensuring proper distribution and compliance.

But rare is the American company that has integrated social initiatives into its business model around the world. Think Exxon Mobil. Rarer still is the American company whose philanthropic efforts outside the US match the proportion of total revenues and profits coming from overseas. IBM is a notable exception: its On Demand Community programme provides software tools and training that enable thousands of its employees worldwide to provide free assistance to not-for-profit organisations in their communities.

In the face of widespread opposition to the "hard power" style of US foreign policy, however, more American multinationals are realising that soft power, expressed through CSR, can have value in the global market. A combination of defensiveness, threats against whistleblowers and aggressive lawsuits against competitors is as anachronistic in the corporate world as it is in politics.

Hardball tactics have their place - for example, in defence of intellectual property. But US multinationals need to embrace the culture of soft power and public diplomacy. This means more than minor "think local, act local" contributions, such as buying the kit for the high school football team. It means devoting money and intellectual muscle over many years to helping solve social problems - in education, health and the environment. For these are issues that can be addressed by a company's skills, experience and leadership.

Think Lord Browne at BP and global warming. Think Bill Gates at Microsoft and disease in Africa. These are tough business leaders who are prepared to tackle the big problems facing the world by leveraging the resources at their disposal, using their convening power and persuading others to their point of view. Soft power does not mean being soft; it means being smart.

John Quelch is a professor at Harvard Business School and co-author of 'The Global Market', published by Jossey-Bass.

On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style

Olympic diver has made his modelling debut for Adidas

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week