Strategic Responses to Grand Challenges: How Corporations Build Community Resilience

From time to time corporations may find it expedient to support a particular response to ‘grand challenges’ such as poverty, social inequality or climate change by promoting ‘community resilience’: that is, the ability of place-based communities to maintain or even enhance their members’ livelihoods amidst both gradual and sudden economic, social or ecological changes (e.g., unusual floods or fires increasing insurance claims). Why would corporations choose to do so, and how would such interventions work in practice? This study provides insights into the motivations and circumstances that might induce major corporations to invest in a variety of site-specific projects aimed at building community resilience, in the hope of minimising the corporations’ risk.

Observation of five projects in South Africa in supporting the building of community resilience sets out to understand of why and how corporations undertake and handle such projects. The projects, spread around the country, involved four companies providing support in activities related to insurance, municipal management, retail, banking and mining.

One of the questions that the study team were interested in pursuing was: what were the motivations that led the corporates involved to become engaged in this wawith the particular ‘grand challenge’ of socio-ecological change.

Previous explanations have included a general sense of corporate responsibility, regulatory compliance, reputation and philanthropic motives. These do not, however, satisfactorily explain what the motivation might be for a corporation to invest time and resources in a place-based project engaging with the many potential local levels and nuances of socio-ecological change.

What emerged was the recognition that managers in all five communities had identified a risk that was both site-specific and firm-specific, potentially affecting their investment in, for example, staffing, infrastructure, or supply chains. The particular risks in this study were: a local spike in insurance claims; decline in water affecting a fresh produce supply chain; economic hardships affecting a bank; job losses affecting the conditions of a mining licence.

What also became apparent was that the engagement of the corporate sponsors with the place-specific issues followed three stages: 

  • Exploring. What are the firm- and place-specific resources at risk?
  • Focus and partnering. What local points of leverage are there through which the intervention might make a difference, and what other actors might be enrolled in order to do so most effectively?
  • Commitment. What resources would the corporate contribute to this partnership?

The interventions by corporations were therefore pragmatic and strategic, requiring specifically tailored responses on order to at least mitigate their risk.

Hamann, R.,  Makaula, L., Ziervogel, G., Shearing, C. & Zhang, A. 2020. Strategic Responses to Grand Challenges: Why and How Corporations build Community Resilience. Journal of Business Ethics. 161: 835–853.  https://doi.org/10.1007/s10551-019-04345-y

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