Question

What are the five stages of corporate citizenship?

Answer 1

There are five stages of corporate citizenship. A firm can grow from the first stage to the fifth by building the capability to understand and resolve community needs and its desire to grow from within by developing its culture and structure suitable for community support activities. These five stages are described in the following text.

Elementary/ Compliance Stage - At this stage, the corporations have just started to comply the rules and regulations of the states and community. But the senior management does not have any awareness or involvement in the community reform activities. Generally, small firms which do not have surplus resources or time to get involved in community activities will be in this state.

Engaged Stage - In this stage, the top management will start getting involved in the citizenship activities and they form various policies and procedures related to community activities which the employees of the organizations are supposed to follow.

Innovation Stage - In this stage, the top management and the company gets more involved in the citizenship activities. The enlightenment often comes through the shareholders or various other stakeholders through several interactions. The citizenship activities start getting funded at this stage.  Transparency comes into play at this stage as companies typically monitor how successfully they are involved in the community, with results of this monitoring being made available through public reports.

Integration Stage - In this stage, the citizenship activities are integrated well with the company’s regular operations. Performance in community activities becomes part of the balanced scorecard and come under monitoring by the top management. Consultations with shareholders tend to continue at this stage and some firms may even set up formal training and education plan in the area of community involvement for their employees.

Transformation Stage - At this stage, the economic and social involvement, support and integration become regular parts of a firm’s daily operations. The citizenship activities and plan become the part of its strategic planning process and the corresponding activities become tools for competitive advantage and stakeholder relationship management.