From producers to consumers – Europe adopts the global model

Alliance magazine

Until recently donors in continental Europe operated within a model of society structured around producers. This is changing rapidly, as the global consumer-orientated model takes over.

Today, around the world, a tripartite model of society operates, in which the three sectors are private business, public government and a third non-profit sector, and corporate donors are increasingly forming partnerships with charities.

This global model implies a significant change for continental Europe, where the traditional tripartite model consisted of government, management and labour, essentially orientated around producer interests. Major social issues such as the scale of the welfare state and the consequential level of taxation and economic issues such as the need for wage restraint or greater capital investment were usually settled by round-the-table negotiation.

A fast-changing model

Now pressures from global competition and technological change in particular have led to dramatic reductions in employment in the traditional unionized heavy industries. Whole industries are being denationalized and deregulated even by left-of-centre governments. The economic growth areas in services and small business are less amenable to the class solidarity approach of trade unionism.

At the same time, the non-profit sector is growing. Changes in society, such as the decline in church attendance and in the mass membership of political parties, are giving rise to a more diverse ‘patchwork quilt’ of associations and self-help groups, some of them very large and effective. More people are volunteering: an average 27 per cent (1) with levels highest in the Netherlands (38 per cent) and Sweden (36 per cent). NGOs are also employing more staff; for example, the ‘third sector’ accounts for 4.2 per cent of all employment in France and 3.7 per cent in Germany. (2)

The challenge facing multinationals

These developments are forcing large international corporations to rethink. Traditionally multinationals are good citizens in their ‘home’ country, very active in the USA where the expectation to get involved is acute and practically engaged in developing countries on basic issues such as schools, health care and physical infrastructure. But they have not got involved in ‘next-door’ countries in Europe, despite extensive business operations.  In contrast many US and Japanese firms, not having a ‘home country’ in Europe, have adopted a pan-European approach, with similar programmes in each country.

IBM and Johnson & Johnson are two US examples, the former with a scheme launched in 1997 to fund training initiatives using IT to combat social exclusion, the latter with a fund launched in May 1998 to improve the standards of child care across the continent. European-based companies now developing a consistent approach within Europe are Diageo, which announced in June an international foundation partly to coordinate activity; AXA, which has expanded its ‘AXA Atout Coeur’ volunteering programme outside France; and Marks & Spencer, which is running its UK-originated short-term community secondment programme in France, Spain and Belgium.

In Europe, despite the new tripartite model, the role of trade unions remains important. Traditionally they have seen unpaid voluntary endeavour as a threat, taking jobs away from their members. But the more forward-thinking now see that they have much in common with voluntary organizations and can work alongside them, campaigning and lobbying for changes to government policy.

The European Commission has also started to change its approach. In June 1997, it published a research document, Promoting the Role of Voluntary Organisations, and it has now awarded part-funding to a new initiative, which The Corporate Citizenship Company is coordinating, to develop employee community involvement.

As power in the European economy switches more to consumers and away from producer interests, and, in society, away from big government to individual citizens and their voluntary associations, so corporate donors are changing to remain active and effective corporate citizens.

David Logan and Mike Tuffrey are founding directors of The Corporate Citizenship Company, the London-based research consultancy. Mike Tuffrey contributed the column for this issue.

For further information about the Corporate Citizenship Company:
Tel +44 171 836 6132
Fax +44 171 836 4255

1 National Centre for Volunteering, London (1997).
2 John Hopkins University (1994).

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