Corporate Social Responsibility and Sustainable Development Many different companies can significantly contribute to the integrated goals and targets of the United Nations’ sustainable development goals, such as poverty reduction by 2030 Poverty is not only about people living on less than $1.25 per day, but more fundamentally, it is their lack of capabilities and access to participate in productive economic activities If companies can contribute in order to provide access and the necessary skills, then individuals will have the capabilities to achieve their aspirations, including earning a higher income Corporate Social Responsibility and Sustainable Development supports Sen’s assertions that poverty can be alleviated if the capability of individuals is improved Beyond that, this book shows that sustainable development goals can be achieved when the company’s CSR programs and social capital development in improving people’s capabilities are combined with necessary finance access and market access for the poor The theoretical model developed from the journey of Astra International, one of the largest public-listed companies in Indonesia, is replicable for other companies aspiring to be sustainable in developing countries The model shows a virtuous cycle between the corporate aim, CSR programs, social capital and corporate sustainability This volume is of great value to academics, practitioners and policy makers interested in the themes of CSR, social capital and sustainable development of developing countries It also appeals to professionals in industry associations, development agencies and international organisations, as well as NGOs that are concerned with the achievement of sustainable development goals by 2030 Risa Bhinekawati is a corporate sustainability advisor and a lecturer who is very passionate about improving sustainable development in developing countries She is now a lecturer at Podomoro University, Indonesia, and also serves as an Advisory Board Member of Women in Global Business, Indonesian Chapter Finance, Governance and Sustainability: Challenges to Theory and Practice Series Series Editor: Professor Güler Aras, Yildiz Technical University, Turkey; Georgetown University, Washington DC, USA Focusing on the studies of academicians, researchers, entrepreneurs, policy makers and government officers, this international series aims to contribute to the progress in matters of finance, good governance and sustainability These multidisciplinary books combine strong conceptual analysis with a wide range of empirical data and a wealth of case materials They will be of interest to those working in a multitude of fields, across finance, governance, corporate behaviour, regulations, ethics and sustainability For a full list of titles in this series, please visit www.routledge.com/FinanceGovernance-and-Sustainability/book-series/FINGOVSUST Sustainable Markets for Sustainable Business A Global Perspective for Business and Financial Markets Edited by Güler Aras Sustainable Governance in Hybrid Organizations An International Case Study of Water Companies Linne Marie Lauesen Transforming Governance New Values, New Systems in the New Business Environment Edited by Maria Aluchna and Güler Aras Strategy, Structure and Corporate Governance Nabyla Daidj Corporate Behavior and Sustainability Doing Well by Being Good Edited by Güler Aras and Coral Ingley Corporate Social Responsibility and Sustainable Development Social Capital and Corporate Development in Developing Economies Risa Bhinekawati Cosmopolitan Business Ethics Towards a Global Philosophy of Management Jacob Dahl Rendtorff Corporate Social Responsibility and Sustainable Development Social Capital and Corporate Development in Developing Economies Risa Bhinekawati First published 2017 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2017 Risa Bhinekawati The right of Risa Bhinekawati to be identified as author of this work has been asserted by her in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Names: Bhinekawati, Risa, author Title: Corporate social responsibility and sustainable development: social capital and corporate development in developing economies/Risa Bhinekawati Description: Abingdon, Oxon; New York, NY: Routledge, 2017 | Includes bibliographical references and index Identifiers: LCCN 2016035098 | ISBN 9781138227583 (hardback) | ISBN 9781315395463 (ebook) Subjects: LCSH: Social responsibility of business–Developing countries | Sustainable development–Developing countries | Corporations–Environmental aspects–Developing countries | Management–Environmental aspects–Developing countries Classification: LCC HD60.5.D44 B495 2017 | DDC 338.9/27091724–dc23 LC record available at https://lccn.loc.gov/2016035098 ISBN: 978-1-138-22758-3 (hbk) ISBN: 978-1-315-39546-3 (ebk) Typeset in Times New Roman by Sunrise Setting Ltd, Brixham, UK Dedicated to leaders of Astra International Mr William Soeryadjaya (1922–2010) and Mr Michael Dharmawan Ruslim (1953–2010) Their legacy in building responsible business that brings prosperity to Indonesia has inspired me to undertake my PhD study and write this book This page intentionally left blank Contents List of figures List of tables Foreword by David Crowther Acknowledgements List of acronyms and abbreviations Introduction: corporations and sustainable development goals xi xii xiv xxi xxii Roles of companies in developing countries Lessons from a responsible company in a developing country Implications for sustainable development goals Structure of the book 10 References 11 Corporate social responsibility and sustainable development in developing countries 14 Sustainable development issues in developing countries 14 Extended roles of companies in developing countries 16 The concept of corporate social responsibility 18 Strategic corporate social responsibility (CSR) 20 The importance of stakeholder management in strategic CSR 22 CSR in developing countries 23 Conclusion 26 References 26 Social capital and corporate sustainability in developing countries Social capital as a form of capital 32 Definitions of social capital 34 32 viii Contents Bonding, strong ties, bridging, weak ties and structural holes 36 Social capital investment 37 Benefits from social capital investment to corporate sustainability 40 Conclusion 41 References 42 Theoretical linkages between sustainable development, corporate social responsibility, social capital and corporate sustainability 45 Theoretical framework 45 Research objectives, research gaps and research questions 49 References 51 Research approach 54 Considerations for qualitative case study 54 Research sampling and unit of analysis 55 Data collection and data management 58 Data storage and management 62 Data reduction and data displays 63 Data analysis 68 Discussions and drawing conclusions 70 Issues of qualitative case study 70 References 71 Indonesia, a very large developing country 74 Why Indonesia? 74 The roles of companies and CSR in Indonesia 75 Mandatory CSR but lack of government law enforcement 77 Research and knowledge gap on CSR in Indonesia 78 References 80 Astra, one of the largest companies in Indonesia Why Astra? 83 The journey from small business to very large public company 84 CSR as a strategic business investment 89 CSR and corporate self-regulation 94 CSR and stakeholder management 95 Taking lessons from Astra’s strategic CSR programs 99 References 100 83 Contents Empowering micro and small enterprises to build supply chain and prosperity ix 104 MSMEs and poverty alleviation in Indonesia 104 Evolution of the company’s MSME program 105 Sustainable development and the MSME development program 110 The MSME program formulation and implementation 113 The MSME program and social capital development 116 Social capital and corporate sustainability 121 Conclusion 126 References 128 Developing vocational education to secure skilled workers 130 Vocational education and lack of skilled workers in Indonesia 130 Evolution of the company’s vocational education program 131 Sustainable development and vocational education program 136 Vocational education program formulation and implementation 140 Vocational education program and social capital development 143 Social capital and corporate sustainability 147 Conclusion 150 References 151 10 Eradicating poverty by empowering smallholder farmers Palm oil plantations and sustainable development challenges in Indonesia 153 Public roles of a palm oil company in sustainable development 154 An overview of the company’s CSR program surrounding its palm oil plantations 155 Evolution of the company’s CSR program in palm oil plantations 158 Sustainable development and empowerment of smallholder farmers 161 Smallholder program formulation and implementation 164 Smallholder farmers’ program and social capital development 166 Social capital and corporate sustainability 172 Conclusion 177 References 179 153 222 Conclusion Waldman, D.A., Siegel, D.S and Javidan, M (2006) Components of CEO transformational leadership and corporate social responsibility Journal of Management Studies, 43(8), 1704–1725 Widjaja, H C (2014) The public contribution of Astra Paper presented at the Seminar Harmonizing government and non-government efforts in strengthening micro, small, medium enterprises (MSMEs), Jakarta Yu, X (2008) Impacts of corporate code of conduct of labor standards: A case study of Reebok’s athletic footwear supplier factory in China Journal of Business Ethics, 81, 513–529 Zahra, S (2010) Harvesting family firms – organisational social capital: A relational perspective Journal of Management Studies, 47, 345–366 Zadek, S (2007) The civil corporations Retrieved 17 October 2014 from http://www zadek.net/wp-content/uploads/2009/12/Civil-Corporation-2nd-Edition-First-Chapter.pdf Appendix Notes to contributors I would like to express my heartfelt gratitude for the knowledge and inspirations from the following stakeholders of Astra’s corporate social responsibility programs.1 Their spirits and resilience in developing a more prosperous and dignified Indonesia have kept me motivated during a very long journey of my PhD study at the Australian National University Argianto, Y., Network Control and Development Service Engineer, PT Astra Honda Motor (AHM) Aritonang, R., Owner of Gracia Service Station, Astra Honda Authorized Service Station (AHASS), beneficiary of the MSME development program Blacksmith, beneficiary of micro finance institution, Astra Agro Lestari subsidiary company CD Officer, Community Development Officer, Astra Agro Lestari subsidiary company Deliansyah, R., Head of Environment and Social Responsibility Division, Astra International Farmer 1, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 2, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 3, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 4, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 5, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 6, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 7, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 8, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 9, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 10, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 11, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 12, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 13, beneficiary the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 14, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Farmer 15, beneficiary of the PALMOIL program of Astra Agro Lestari subsidiary company Finance Manager 1, Astra Agro Lestari subsidiary company Finance Manager 2, Astra Agro Lestari subsidiary company Foreman, Astra Agro Lestari subsidiary company Graduate 1, fresh graduate of Astra Manufacturing Polytechnic, beneficiary of the POLMAN program Graduate 2, fresh graduate of Astra Manufacturing Polytechnic, beneficiary of the POLMAN program 224 Appendix Graduate 3, fresh graduate of Astra Manufacturing Polytechnic, beneficiary of the POLMAN program Hariko, H., Senior Manager, Technical Training Department, PT Astra Honda Motor (AHM) Hermawan, R., former Director, PT Nandya Karya Perkasa, beneficiary of the MSME development program Iqbal, M., General Manager, Dharma Bhakti Astra Foundation (YDBA) Istanto, A., Chief of Security, Environment and Social Responsibility, Astra International Karkono, A., Lecturer of Astra Manufacturing Polytechnic (Polman Astra) Kosasih, M., Senior Manager, Department of Automotive, Service Stations and Heavy Equipment, Dharma Bhakti Astra Foundation (YDBA) Kumala, B., Manager, Astra Honda Motor Foundation; Former Deputy Director of Polman Astra Liman, Y., Director of Astra Manufacturing Polytechnic (Polman Astra) LKM Manager 1, Manager of micro finance institution (LKM) of Astra Agro Lestari subsidiary company LKM Manager 2, Manager of micro finance institution (LKM) of Astra Agro Lestari subsidiary company Machrufin, P., Advisor, the Community of Astra Assisted Car Workshops, beneficiary of the MSME program Martono, F X S., Chief of Human Capital of Astra International and Chairperson of Dharma Bhakti Astra Foundation Mulyana, T., Technical Training Sub Department Head, PT Daya Adicipta Mustika, Honda dealer for West Java Region Nugroho, H D., Head of Public Relations, Community, and Student Affairs, Astra Manufacturing Polytechnic (Polman Astra) Nursim, Lecturer of Astra Manufacturing Polytechnic (Polman Astra) Parent 1, father of fresh graduate of Astra Manufacturing Polytechnic (Polman Astra) Parent 2, father of graduate of Astra Manufacturing Polytechnic (Polman Astra) Parent 3, father of a scholarship recipient and fresh graduate of Astra Manufacturing Polytechnic (Polman Astra) Pongoh, T., Deputy Director of Astra Manufacturing Polytechnic (Polman Astra) Rakhman, P., Purchasing Division Head, PT Isuzu Astra Motor Indonesia (IAMI) Rasjidin, D M., Executive Coordinator Purchasing Administration Department, Astra Daihatsu Motor (ADM) Setiawan, P., former Chairperson of Dharma Bhakti Astra Foundation Setyawan, H., Setia Jaya motor, car workshop partner of YDBA, beneficiary of the MSME program Sinurat, F., Department Head of Community Development, PT Astra Agro Lestari Sr CD Officer 1, Senior Community Development Officer, Astra Agro Lestari subsidiary company Sr CD Officer 2, Senior Community Development Officer, Astra Agro Lestari subsidiary company Sumardi, I., President Director of PT Galih Ayom Paramesti, beneficiary of the MSME program Suprapto, L., Founder and President Director of PT Adi Wijaya Citra, beneficiary of the MSME program Supriyono, J., Director of PT Astra Agro Lestari Suyoso, H., Plant Manager, PT Nandya Karya Perkasa, beneficiary of the MSME program Appendix 225 Taufik, Owner of Villa Motor, motorcycle workshop partner of YDBA, beneficiary of the MSME program Ubaydillah, Business Development Manager, Astra Mitra Ventura Utomo, E., Head of Service & Accessories Department, PT Astra International Daihatsu Sales Operations Warman, Y., Division Head of Corporate Communications, PT Astra International Widayanto, A E., trainer of Astra Green Company for MSMEs, Dharma Bhakti Astra Foundation (YDBA) Widiyanto, T., Former Faculty of Astra Management Development Institute (AMDI) Wijaya, A., Senior manager for Business Development Agency (LPB), Micro Finance Institutions (LKM) and Dharma Bhakti Astra Foundation (YDBA) gallery Yudiansyah, H., Operations Manager, PT Nandya Karya Perkasa, beneficiary of the MSME program Yuliarto, A., Senior Manager, Procurement Engineering Astra Honda Motor (AHM) Yuliastanti, N., Procurement Manager, PT Nandya Karya Perkasa, beneficiary of the MSME program Yunus, Owner, CV Aneka Teknik Utama, beneficiary of the MSME program Note Names are listed based on consent to be publicly named and identified This page intentionally left blank Index 3W strategy 88 5Rs 107 academic journals 78, 87 academies, technical 138 Academy of Technical Manufacturing Indonesia (ATMI) 132 accidents, work 94 accountability 19, 49 accreditations 135 Aceh 173 action (coding) 63 actions, collective 107, 109, 203, 209 actions, strategic 188 activity plans 90 actors 17, 39, 41, 54, 202; focal 41, 47, 51, 117, 190, 202–3 Africa 50 Aguinis, H and Glavas, A 9, 18–19, 49, 58, 99, 164, 189 Albareda, L 23, 217 Ameshi, K.M (et al.) 24 analysis 79; units of 55–8 analytical generalisation 69 Annual National Quality Convention 86 Ansari, S (et al.) 9, 39–40, 49–50, 204 archives 58–9, 61 arisan 166, 190 Asian Wall Street Journal 84 Asosiasi Emiten Indonesia 109 assessment programs 135 assets, confiscation 110 Association for Overseas Technical Scholarship (AOTS) 136 Association of Southeast Asian Nations (ASEAN) 124, 136, 144 Astra Agro Lestari (AAL) 59, 61, 83, 134, 146, 154–6, 162–5 Astra Agro Lestari (AAL) Foundation 91 Astra Automobile Group 108 Astra Component Group 108 Astra Cooperative 86 Astra Daihatsu Motor (ADM) 134, 143 Astra dealers 108 Astra Education Foundation 91 Astra Executive Training Centre 86 Astra Friendly Company (AFC) 88, 95, 150, 155, 188 Astra Graphia Information Technology (AGIT) 133 Astra Green Company (AGC) 87, 94–5, 110, 116, 120, 150, 155, 163, 176, 188 Astra Honda 135 Astra Honda Authorized Service Stations (AHASS) 108, 125–6 Astra Honda Motor (AHM) 108, 143 Astra Honda Motor (AHM) Foundation 91 Astra International (Astra) 56, 59; early history 84–6; international shareholders 88; listed public company 86–7; multidimensional crisis 87–8; towards 2020 88–9; valid case for study 83–4 Astra International Cooperative 91 Astra International Head Office (AIHO) 133 Astra Management Development Institute 86–7 Astra Management System 88, 90 Astra Manufacturing Polytechnic (POLMAN) 56, 139 Astra Mitra Ventura (AMV) 87–8, 107–9, 118, 125, 193 Astra Otoparts (AOP) 134, 143 Astra Pensioners’ Groups 118 Astra Pension Fund 91 Astra Pension Fund Foundation 86 Astra Total Quality Control Management System 86 228 Index Astra Total Quality Convention (InnovAstra) 86 Astra United Spirit for Indonesia (SATU Indonesia) 88 Atlas.ti 62–3 ATMI 138 ATMI Solo 149 Australian National University, The (ANU) 58 automotive components 125, 186 Automotive (Four-wheeler) program 134 Automotive (Heavy Equipment) program 134 automotive industries 86 awards 88, 94–5 back to basic (program) 109 Bali 109 Bandung 85 Bank Bumiputera 109 Bank Central Asia (BCA) 121 Bank Mandiri 109 Bank Niaga 109 bankruptcy 87, 99, 113, 159 banks 118, 126, 154, 176 Banks Ekspor Impor Indonesia 109 Baskin, J 20, 24 Basu, K and Palazzo, G 20, 45, 47, 89, 182, 202 behaviours 62, 144–5, 168, 193 benefits 40, 114, 166 bias 70–1 biodiversity 15, 154, 176 blacksmiths 106 Blowfield, M 24 Board of Directors 140–3 bonding 107, 109, 117, 143–4, 167, 190–2 bonuses 125 Bourdieu, P 33–4, 37–8, 40–1 bridging 107, 109, 143–4, 190–2 British Standards for Occupational Health and Safety Management (OHSAS) 94 Burt, R S 32–4, 37, 39–41, 50, 217 business capacity 56 business development 117 business environments 74 business ethics 19, 23, 88 business growth 85 business information 105 business leaders 17, 78 business needs 48, 110, 165, 183–6 business practices 23 buyer–seller relations 24 Campbell, J L 16, 219 campus 138, 145 capability transfer 50 capacity building 91, 95, 105, 120, 135, 186, 193 capital 32–4, 84, 105, 107, 117; economic 38, 47; human 147–8 career opportunities 194 Carroll, A.B 3, 17–20, 45, 113, 140, 194 case replication 55 case studies 24, 55, 62, 69, 78–9; design 55–7; selection 55–6; single embedded 56 Catur Dharma (four virtues) 86, 89–90, 107, 140, 162, 201 Central Java 109 Centre of Excellence in Manufacturing 136 certifications 147, 149, 196 certifying institutions 191 Chapple, W and Moon, J 78 Chief Executive Officer (CEO) 144 China 24 Christensen, J and Murphy, R 25 chronology 63, 68 civil unrest 25, 85–6, 110, 173 closed loop 85 coaching 106–7, 120, 126, 190, 193; PALMOIL (program) 160, 166, 168, 176 codes of conduct 25, 49, 76, 94 Coleman, J 33–4, 39, 47–8, 50, 191, 196; collective actions 116, 143, 166 collective actions 48, 120–1, 171–2, 191, 194 common goals 48, 121, 147, 171–2 communities 21, 38–9, 47–50, 76, 96, 194; cohesion 114; embeddedness 23–4; local 79, 154, 162; PALMOIL (program) 155, 163, 165; POLMAN (program) 145, 173, 186 community development 76, 113, 164, 167 community development index (CD Index) 165 Community Development Officers (CDOs) 160 Community Development Program Division 165 community income generation programs (IGA) 88, 92, 109 companies, political role 3–4 competence 147, 165; technical 105, 145, 168, 192–3; see also training Competence Test Institution 135, 144 competitions 47, 86, 136, 191 Index components 108, 116, 191 computers 131, 167 conceptual models 68 conflicts 40, 56, 154, 159; social 75, 114, 183–5; see also civil unrest consumers 23, 77–9, 84 contacts 36, 41, 147; see also networks contractors 165–6 cooperation 79, 203 cooperatives 106, 125, 154–5, 167 Cooperatives, Ministry of 109 Corley, K.G and Gioia, D.A 69, 201 corporate: actions 22, 76, 154; aims 47–8, 86, 90, 110–12, 138–9, 162–5, 188; citizenship 19; culture 58, 145; foundations 91–2; governance 22, 49, 77, 79, 83–4, 86–9, 154; leaders 49; legitimacy 22; motivations 49; performance 20; philosophy 86, 89–90, 110, 138–9, 162–5; policies 114, 188; political roles 3–4, 212; standards 188; strategy 20, 48, 59; structure 49, 58, 188; sustainability 22, 40, 47, 59, 62, 68–9, 150 Corporate Division of Organisation and Human Capital Development (COHCD) 91 Corporate Division of Communications (CORCOM) 91 Corporate Policy (health and safety) 87, 90–1 Corporate Security, Environment and Social Responsibility Division (CSESR) 91 corporate social responsibility (CSR) 18–20, 23, 49, 91, 218–19; strategic 20–2, 83 corporate social responsibility (CSR) programs 45–7, 59, 68, 99–100; into corporate policies 186–8; formulation and implementation 183–9; palm oil plantations 155–7; social capital 202–3 corruption 19, 25, 74–5, 79, 154 costs 21, 115, 133, 138–9; of polytechnic 145 Côte d’ Ivoire 25 Coutinho de Aruda, M.C 25 creative activities 131 Creswell, J W 55, 62, 70, 71, 219 crises 75, 87, 96, 108, 113, 189; POLMAN (program) 132, 138–9 crises, economic 75, 87, 96, 108, 113, 189 crops 75, 158–60 cross case analysis 68–9 229 culture 23–4, 39, 51, 76 currency depreciation 87, 96 curriculum development 132–4, 136, 139, 143–4, 147, 190 customers 85, 94, 99, 117, 123, 197 D4 program 136 Daihatsu 84, 123, 125 data 55, 58–62; analysis 68–9; coding 62–6; collection 70; displays 68; reduction 63–8 data inputting skills 167 Davis, K 17–18, 183, 188–9, 203 debts 88, 96, 106, 158, 167 De Oliveira, J.A.P 25 developing countries 23–6, 56, 74–5 development: agenda 24; economic 75, 84, 86, 99; regional 38, 105 Dictionary of Social Sciences 32 disasters 15, 76 dividends 84 documents 59, 61, 160 donations 106 Doppelt, R 22, 47, 202 Dunfee, T W 20 eco-labels 94 economies 38, 99, 110 education 25, 40, 75, 86, 92, 94, 186; higher 133; MSMEs (micro, small and medium enterprises) 109; PALMOIL (program) 165, 176, 199; POLMAN (program) 130–2, 134–5, 138–9; public goods 17 Eisenhardt, K 55–6, 58, 69, 71, 200, 219 electricity 25, 165 electronics 134 Elkington, J 15, 113, 121, 137, 147, 172, 204 embedded resources 117–20, 143–7 employees 59, 120, 123, 125, 163, 165; education 78; satisfaction 173, 197; stakeholders 91, 96 employment 77, 86, 89, 105, 134 endangered species 75 EndNote 62 energy efficiency 136 Engineering Metal Profession Certificate 135 English, proficiency in 131 entrepreneurship 104 enterprises, sustainable 105, 107–8, 149; definition 40; development 76, 83–4; owners 59 230 Index environment 21, 58, 87, 163–4, 193, 199; conservation 76, 79; degradation 75–6, 78–9, 154, 183–5; issues 23, 45; management 94; programs 92; protection 77, 113 Environment and Social Responsibility 88 epidemics 159 Equatorial Principles 76 ethical responsibilities 18–19 ethics 45, 58 ethnography 55 evidence 58–9, 61–2, 69–70 Executive Board 114, 140–3 exhibitions 118, 191 expectations 40, 117 explanation building 69 exploitation 38, 76 extended roles (companies) 16–18 factories 145; efficiency 173; utilisation 197 families 149, 166 farmers 59, 106, 153, 191, 193–4, 199 farmers’ groups 160, 166–7, 171, 176; see also WKAK (communication forum amongst farmers’ groups) farming 118; fish 159 Federal Group 108 Federal Motor 87–8, 106–8, 132–3 Federal Technical Academy (FTA) 132–3 Fernando, M 25–6 fertilisers, use of 176, 193, 199 FGTC (foreman goes to campus) program 135 finance 87, 191, 193, 195, 199; MSMEs (micro, small and medium enterprises) 108–9, 117–18, 123, 125; PALMOIL (program) 154, 160–1, 168, 171, 176 Finance Asia 84 fires 85 fishing 75, 106 forests 75, 176 forums 117, 190 framework, theoretical 48, 63, 69–70 Freeman, R E 22, 47, 95–6 Fuji-Xerox 84 Fukuyama, F 34, 47, 116, 143, 166–8, 193 funding 107, 143, 158, 191 GAM (Aceh Independence Movements) 173 GDP (gross domestic product) 74, 105 generalisability 56, 70–1, 219 Gillespie, P 5, 77–9, 154 Global Compact, OECD Guidelines for Multinational Corporations, Equatorial Principles, Global Compact and Social Accountability 76 Global Fortune 500 88, 110 globalisation 17, 25 Global Reporting Initiatives (GRI) 23, 76 Gonzales III, J 24 governance 16, 19, 23 Governing Board 114, 140–3 governments 75–6, 78, 118, 138–9, 163, 196; Indonesian 85–6; local 92 graduates 59, 125, 130, 132–3, 143–5, 148, 191 Granovetter, M 10, 37–41, 50, 71, 143, 196 green corporation initiatives 92 grounded theory 55 growth, economic 75, 85, 105, 214 guidelines 188 Gummesson, E 55 habitats 75 Hamel, J 70 Hart, S.L., Milstein, M.B and Caggiano, J 40, 126, 138, 147, 150, 161, 178, 200 harvests 158, 160–1, 167, 173 HBBA (community of car service stations assisted by Astra) 117 health and safety 87–8, 94, 193, 199 healthcare 17, 24–5, 39, 76, 79, 85–6; MSMEs (micro, small and medium enterprises) 92; PALMOIL (program) 163, 165 heavy equipment 134, 186 Heugens, P and Dentchev, N 22, 191 high conservation value (HCV) 75, 176 Honda 84–5, 87, 106–7, 139 Honda Motor Japan 132 housing 25, 163, 165 hubs 117 human capital 33–4, 38, 47, 88, 134, 193, 195 Human Development Index (HDI) 74–5 Human Development Report (UNDP) 17 human resources 88, 108, 130, 193 human rights 23, 94 Idemudia, U 25, 50, 217 income generation activities (IGAs) 56, 159, 165, 173 incomes 15, 38, 41, 75, 79, 85, 199; low 49, 130, 132; MSMEs (micro, small and medium enterprises) 105, 110; Index PALMOIL (program) 158, 160, 166, 176; POLMAN (program) 133 India 24–5, 78 Indonesia 4, 38, 56, 74–9; regional disparities 140, 199 Indonesian Centre of Excellence in Manufacturing 144 Indonesian Certification Body for Metal Machinery 135, 144 Indonesian Chinese (community) 75 Indonesian Engineering Metal Profession Certification 144 Indonesian State Bank (BNI) 158 Indonesian Stock Exchange (IDX) 78, 155 industrial clinic 106–7 industries 84, 134, 138–40, 143, 176; local 47 inequality 15, 17, 39, 214–15; incomes 74–5, 159 information flows 39–40, 117, 176, 190, 193, 199, 203 information systems 186 information technology 109 Infosawit 153 infrastructure 17, 24–5, 74, 76, 183–6, 195, 214; PALMOIL (program) 154, 163, 165, 168, 171, 176 initial public offering (IPO), shares 87 instructors 136, 144 insurance companies (Astra) 118, 191 interdependence 48 International labour Organization 135 International Labour Organization (ILO) 23 International Organization for Standardization (ISO) 23, 76, 94 international standards 76, 79, 87, 90, 136, 166 internships 133–5, 144, 193 interpersonal ties 37–8 interviews 55, 58–9, 61, 145 investment 107, 138, 140, 145, 163; foreign 76; long-term 113; unsustainable 25 investors 75, 84, 155; multinational 88 Isuzu 125 Jakarta 109 Jakarta Stock Exchange 87 Japan Vocational Ability Development Association (JAVADA) 136 Jardine Cycle and Carriage Ltd 87–8 Jasa Raharja 109 Java 155 231 jobs 85–6, 109, 112, 149; creation 176, 199 Kalimantan 123, 139, 155 KEHATI Foundation 155 Kehati Sustainability Index 76 Kemp, M 5, 76 key performance indicators (KPIs) 90, 143 King, N 70 Kirchgeorg, M and Winn, M 48, 203, 212 knowledge 39; centre 136; hubs 140; industry 145–6; local 79; transfer 84, 107, 158, 166–7, 190 KPIs 165, 188 Kumala, B 131–3, 139–40, 142, 145, 147 laboratories 136 labour 21, 56, 74, 92; practices 23–5, 38, 76, 99; scarcity 183–6; skilled 108, 138, 140, 148 Laksmono, B.S (et al.) 75, 79 land 15, 24, 75 Latin America 25 laws 77, 90, 142 lecturers 139, 143, 145, 147 Lee, M.P 18 legislation 18–19, 21, 75–8; see also weak states Levi-Strauss, C 32, 38 license to operate 20, 46, 114, 173, 197, 202 Liem, Peng Hong 84 links 113, 134, 138–9 Lin, N 34–6, 121, 145, 147, 168, 172, 192 livelihoods 49–50, 75, 104, 203 LKM Benteng Kayu Mangiwang 161 LKM Mitra Surya Sejahtera 161 LKMs (Micro Finance Institutions) 160–1, 167–8, 171, 173, 193 loans 106, 159–60, 168, 176 location 138, 165 London, T 26, 203–4, 212 LPB (Business Development Services) 109 Maak, T 17, 36, 189, 202 Maak, T and Pless, N.M 17, 182 Mackey, A (et al.) 22 Magadi Soda 25 Malari (movement) 85 Malaysia 78 management 47, 59, 69, 108–9, 192–3; cycles 114, 143, 165, 188; financial 232 Index 166–7; improvements 86; support to POLMAN 145; theory 217–18; transfer 84 Man Power, Ministry of 135 manufacturing 59, 79, 86, 186, 198; MSMEs (micro, small and medium enterprises) 117–18, 125; POLMAN (program) 144, 149 marketing 78, 105 markets 41, 190–1, 194–6, 199; MSMEs (micro, small and medium enterprises) 108–9, 117–18, 120–1, 123; PALMOIL (program) 159, 168, 176 matrices 68–9 Matten, D and Moon, J 23, 75, 188 mechanical engineering 186 Mechanical Engineering and Tool Manufacturing 132 mechatronics 186 Mechatronics program 134 media partners 24 medical schemes 125 mentoring programs 145 mergers 154–5 Mexico 24 micro credit 51 micro enterprises 104 micro finance institutions (MFI) 56 micro-macro relations 10, 41, 50, 218 Miles, M.B and Huberman, A.M 59, 63, 68–70 Mills program 134 mining 78–9, 109–10, 123 minority groups 38–9 monitoring 78, 95 Moon, J and Vogel, D 16 motivation 37, 51, 191 motorcycles 125 MSMEs (micro, small and medium enterprises) 56, 186–7, 189–91, 193–4, 197–9; corporate sustainability 121–6; development 140; evolution of programs 105–10; formulation and implementation of program 113–16; Polman Astra 136, 144; POLMAN (program) 149; poverty alleviation 104–5; social capital 116–21 Muller, A and Kolk, A 24 multinational corporations (MNCs) 76 Narayan, D 38–9, 203 National Body of Professional Certification (BNSP) 135 National Education, Ministry of 135, 144 national security 85 needs, economic 24 networks 34, 36, 40–1, 71, 190–1, 203, 212; MSMEs (micro, small and medium enterprises) 113, 117, 121, 125; POLMAN (program) 147 Nicaragua 24, 50 Nigeria 25 non-governmental organisations (NGOs) 166 norms 40, 47 North Sumatra 79 Nusa Tenggara 139 obligations 40, 117, 121; moral 20, 194, 202 observations 55, 58–9, 61–2 office bearers (farmers’ groups) 167, 171 operating practices, fair 23 operational excellence 88 organisational structures 114, 165, 188; LKMs (Micro Finance Institutions) 172 Organisation for Economic Co-operation and Development (OECD) 23 Orlitzky, M 22 outcomes 40, 58, 68; economic 40, 107 ownership 132–3, 138–9, 160; land 24 Pakistan 25, 38, 50 palm oil 75, 79, 134, 150, 153, 162 PALMOIL (program) 6, 190–1, 193–4, 197, 199; CSR program 186–7, 189; early history 158–9; formulation and implementation 164–6; linked to supply chain 159–60; local economy development 160–1; program without supply chain link 159; social capital 166–72 Papua 135 Papua New Guinea 20 participation 39, 79, 166 partnerships 95, 114, 157, 165–6, 203 pattern matching 68–9 Patton, M 5–6, 56, 83 Pearce II, J.A and Doh, J.P 21, 47, 202 penalties 167 performance 22, 96, 99, 121–3, 176–7, 199–200; economic 19–20, 79, 106, 126, 153–4, 172–4, 196–7 persons in charge (PIC) 114, 140 Pertamina 79, 121 Pettigrew, A.M 58, 62, 68–70 philanthropy 21, 23, 113, 116; contributions 74; responsibilities 3, 19, 24, 90 Index Philippines 78, 131 pilot project 161, 167, 194 Plan, Do, Check, Action (PDCA) 90, 145 planning 193 plantations 78–9, 150, 173, 195; MSMEs (micro, small and medium enterprises) 109–10, 123; PALMOIL (program) 153, 158, 160–1, 165, 167–8, 171 plasma farming 157–60 plasma plantations 159 political roles (companies) 49, 86, 131, 212 politics 39, 75, 110 pollution 15, 50, 76, 88, 110, 199; PALMOIL (program) 154; POLMAN (program) 126 POLMAN Astra 59, 61, 118, 140–3; contribution to society 134–6; corporate sustainability 147–50; economic crisis 132–3; social capital development 143–7; sustainable development 136–40 POLMAN Bandung 149 POLMAN (program) 6, 186–7, 189–95, 197–9 polytechnics 138, 145, 186, 198 Porritt, J 32–3, 49 Porter, M and Kramer, M 9, 20–1, 46–7, 49, 183, 202, 212 post-harvest technology 186 poverty 14, 19, 24–5, 38, 45, 49–50, 56; CSR programs 85, 92, 99, 183–6; Indonesia 74–5; MSMEs (micro, small and medium enterprises) 105, 108–9, 112, 114; PALMOIL (program) 153–4; POLMAN (program) 130 poverty eradication 212–13 premises 114, 145 President Letter (environment) 87, 90–1 pricing, fair 24–5 problem solving 120, 190, 194 process improvements 136, 147–8 product development 136 production 108, 113, 124–5, 148, 176 Production and Manufacturing Process (program) 132 productivity 173, 193 prosperity 86, 89, 112 Pruzan, P 17, 183, 202 PT AHM (Astra Honda Motor) 87; see also Astra Honda Motor (AHM) PT Sucofindo 109 PT Surveyor Indonesia 109 233 public access 149 public facilities 163 public goods 15, 22, 39, 86, 131; higher education 136; PALMOIL (program) 155, 163, 177 public listed companies 77 public ownership 79 public relations 78 public services 25, 76; see also public goods purchasing power 85, 108, 182 QCD (quality, cost, delivery) 106–7, 121, 145, 193, 195 QCDI (quality, cost, delivery and innovation) 122, 144 quality control 135, 149, 196 quality standards 168 questions, interview 59–60 Rachmat, Theodore P 86–7, 96 raw materials 176, 197 real-life contexts 55, 62 reciprocity 40, 117 recordings, audio 59 records, archival 58 recycling 126 referrals 118 Reficco, E and Marquez, P 38 regulations 20, 46, 87, 94–5, 158, 176, 202; government 77, 90 regulators 24 remote areas 186, 193, 199; PALMOIL (program) 164–5, 176; POLMAN (program) 139–40, 145, 149 reputation 20–1, 46, 78, 121, 123, 194, 202 research 49–51, 70–1, 78–9, 136, 140, 145; design 56; gaps 201; limitations 219–20; objectives 209; opportunities 86; qualitative 54–5, 58; questions 56, 58, 63, 210–11; sampling 55–8 researcher subjectivity 70 residency 160 resources 39–41, 47–8, 143, 147, 195, 203; allocation 114, 132, 134, 165, 188; embedded 107, 168–71, 209 respondents 59, 165 retirement packages 88 rigour 70 Rio Earth Summit 17 riots 173 risk management 20–1, 46, 202 risks, economic 15 234 Index Roloff, J 22 Ruslim, Micheal D 88–9, 94, 109–10, 140 Russo, A and Perrini, F 9, 26, 50, 201, 217 safety clothing 118 salaries 87, 125, 167 sampling, research 55–8, 70, 83 Sandhu, S and Ozanne, L.K 24 savings schemes 125 schedules, planting and harvesting 171 Scherer, A.G and Palazzo, G 3–4, 9, 17–18, 22, 49, 131, 209 scholarships 86, 186, 191, 193; POLMAN (program) 134, 136, 138–9, 145 school dropouts 131 schools 38, 163, 165; vocational 136, 144, 149 Schrage, E.J and Ewing, A.P 25 Schwartz, M.S and Carroll, A.B 19 Schwarzau 38 security 158, 176 Security, Environment and Social Responsibility (SESR) 95 self-regulation (companies) 15, 22–3, 86–7, 94, 188 self-reliance 79, 166, 171, 193 senior managers 142 service networks 186 service stations 115–18, 121, 186, 191, 196; MSMEs (micro, small and medium enterprises) 123, 125–6; remote areas 109 shareholders 17, 21, 24, 40, 188 shares 87–8, 133, 139, 155 Singapore 78 skills 131, 135, 144, 146–7, 193 small and medium enterprises (SME) 41 small enterprises, weak 92, 99 smallholders 153–4, 157–9, 163, 186 Smith, Adam 32 snowball technique (contacts) 59 social capital 32–6, 47–8, 51, 62, 68–9, 107, 116–17; bonding 36–8; bridging 37–8; corporate sustainability 121–6, 147–50, 172–7, 196–200, 203–4; CSR programs 189–96; development 50, 55; embedding resources 191–4; investment 37–42; POLMAN Astra 143–7; relationships with smallholder farmers 166–8; risks 39 social cohesion 99, 110, 125, 173 social conditions 20, 188 social integration 39, 79 social issues 21–4, 45–8, 56, 76, 188, 202; MSMEs (micro, small and medium enterprises) 110, 113 social jealousy 85, 110, 159 Socially Responsible Investment 76 Socially Responsible Investment Index of Kehati 83 social networks 39, 47, 209 social performance 19–20, 106, 123–6, 149, 198–9; poverty eradication 173–6 social structure 38–9, 50–1, 154 society 33, 145 socio-economic conditions 76 Soepardi 108 Soeryadjaya, William 84–9, 106–7, 110, 112, 181–2 Soewandi, Rini 112 solidarity 40, 117 South Africa 25 South America 38 South Korea 78 Sri Lanka 25–26, 38 stakeholders 19–23, 45, 78, 188–9, 191, 195, 202; AFC (Astra Friendly Company) 88; external 92; internal 91; management 95–9; MSMEs (micro, small and medium enterprises) 111, 114, 116–17, 121; PALMOIL (program) 155–6, 166, 172; POLMAN (program) 140, 145; poverty 85; research 70; social capital 47–8, 50, 62 standards 193, 195, 197, 199; professional 116 state-owned companies 76–7 structural holes 39; see also bridging students 139, 144, 147, 149, 193, 197–8; intake capacity 145; recruitment 140 study, validity of 58 subcontractors 105–6, 108, 121–2 Subroto, Hadi 124 Sub-Saharan Africa 41 subsidiary companies 188, 191, 193–4; MSMEs (micro, small and medium enterprises) 114, 117; PALMOIL (program) 167; POLMAN (program) 139, 148 subsidies 132 Sugiarto, Prijono 110, 140 Sulawesi 123, 155 Sullivan, A and Sheffrin, S.M 14 Sumatera 155 Supervisory Board 114, 140–3 suppliers 21, 96, 109, 125, 155, 165–6 suppliers costs 50 Index supply chains 25, 49, 191, 194, 196, 198, 212; MSMEs (micro, small and medium enterprises) 105, 107–9, 121–2; PALMOIL (program) 154, 159, 164 Suprapto, Linggo 124 Surabaya Stock Exchange 87 surveys 165; see also interviews Surya Raya Lestari (SRL) 171 sustainability 19–20, 79, 202; companies 47, 55 sustainability reporting 84, 94 Sustainable and Responsible Investment (SRI) Index 155 sustainable and responsible investment (SRI) 25–6 sustainable business 114 sustainable contributions 83 sustainable development 15, 23, 45–8, 69, 79, 161–3, 183–6; CSR programs 201–2; goals 7–9; issues 14–15; MSMEs (micro, small and medium enterprises) development 110–13; public roles of company 154–5 tax avoidance 25, 50 teaching 131, 135–6, 165, 190–1 team building 160 technicians 118, 148, 193, 197 technology 41, 86, 105, 108, 131, 134 testing 135, 144 textual analysis 55 textual categorisation 62–3 Thailand 25, 78 theoretical model 208–12 theory building 55–6, 58, 200–1 theory development 68 theory, generation of 69 three Ps 110 Tie, Tjia Kian 84 tool development 136 Toyota 84–5 Toyota Astra Foundation 86 Toyota Astra Motor Foundation 91 Toyota Astra Motor (TAM) 134 Toyota Group 108 Toyota Motor Manufacturing Indonesia (TMMIN) 143 training 94, 190, 193; entrepreneurial 88; MSMEs (micro, small and medium enterprises) 106–9, 116–20, 125; PALMOIL (program) 160, 167–8, 176; technical 135; vocational 92 transactions 157, 176 translation 59 235 transmigrants 158–9, 173 Transparency International (2012) 74–5 Transparency International Corruption Index 75 Trends in International Mathematics and Science Study (TIMSS) 131 triple bottom line 113, 140, 150, 186, 199, 201 triple Ps 88–90, 99 trust 37, 40, 47, 85, 202–3, 212; MSMEs (micro, small and medium enterprises) 117, 120–1, 197; PALMOIL (program) 167; POLMAN (program) 194 tuition fees 132 tuition (lecturers) 133–4, 136, 138, 145, 193, 198 Ubaydillah 88, 108 unemployment 19, 108–9, 131 uniforms 118 United Nations Development Programme (UNDP) 14, 38 United Nations Industrial Development Organization (UNIDO) 25 United Nations Sustainable Development Goals 91–3, 204, 212–17 United Nations (UN) 23 United Tractors 108, 134 United Tractors Foundation 91 universities 109, 145, 165 Uphoff, N 34, 38, 47–8, 116, 143, 166, 203 Urip, S 5, 38, 83, 89 Usbersa Mitra logam 108 Valente, M and Crane, A 25, 49, 201 validity 70–1, 165 value chains 21, 94, 99, 109, 189, 196, 203; MSMEs (micro, small and medium enterprises) 113; PALMOIL (program) 155, 159 vandalism 173 Van de Ven, A.H and Poole, M.S 47, 202 virtuous cycle 201–4 vision, long-term 166 Visser, W 3, 19, 23, 25, 49, 201, 209 vocational competence 140 vocational education 130–1, 186, 196; POLMAN 131–6, 140–3; social capital 143–7; social capital and corporate sustainability 147–50; sustainable development 136–40 vocational high schools 125, 191; see also schools, vocational voluntary contributions 78 236 Index Waagstein, P.R 5, 9, 76–8, 95 waste 21, 94, 126, 176 water supply 15, 165 Way Putih 176 weak states 15, 25, 49, 74–5, 77–8, 183–5, 188; PALMOIL (program) 154, 166; POLMAN (program) 139 wealth 15, 36, 89, 147 websites 78 welfare 50, 79, 91; see also healthcare West Java 125 West Nusa Tenggara 109 within-case analysis 68–9 WKAK (communication forum amongst farmers’ groups) 167–8, 171, 176, 191, 193 women 38, 104, 166 workday losses 94 work ethics 88 work placements 134, 144 World Bank 131 World Business Council for Sustainable Development (WBCSD) 17, 19 World Wildlife Fund, The 75 Yayasan Astra Bina Ilumu (YABI) 88, 132–3, 135–6, 138, 140–3; see also Astra Manufacturing Polytechnic (POLMAN) Yayasan Dharma Bhakti Astra (YDBA) 86, 91, 105–10, 112–18, 121, 123–5, 193; see also MSMEs (micro, small and medium enterprises) Yin, R.K 55, 58–9, 62–3, 68–9, 71, 83, 200 Young, I.M 39, 203 youths 104; see also school dropouts Yu, X 24, 50, 217 Zadek, S 21, 25, 47, 86, 188, 202, 220 ... Cataloging in Publication Data Names: Bhinekawati, Risa, author Title: Corporate social responsibility and sustainable development: social capital and corporate development in developing economies/ Risa... sustainable development goals Structure of the book 10 References 11 Corporate social responsibility and sustainable development in developing countries 14 Sustainable development issues in developing. .. Structure and Corporate Governance Nabyla Daidj Corporate Behavior and Sustainability Doing Well by Being Good Edited by Güler Aras and Coral Ingley Corporate Social Responsibility and Sustainable Development